[Pharm-policy] FW: US vs Europe on Drug Pricing & Global Fund - NYT

[Paul Davis]

> From: dsocolar@bu.edu
> Reply-To: healthgap@CritPath.Org

> 
> http://www.nytimes.com/2001/07/20/international/20DRUG.html?ex=996602715&ei=
> 1&en=a349c9082a75d27a
> 
> U.S. at Odds With Europe Over Rules on World Drug Pricing
> 
> By DONALD G. McNEIL Jr.
> 
> Before the United Nations has even raised up to $10 billion for its
> new fund to fight AIDS, the Bush administration and the European
> Union are engaged in a behind-the- scenes struggle over how that
> money will be spent, particularly on pharmaceutical drugs.
> 
> Communications between the United States trade representative and
> his European Union counterpart, obtained by The New York Times,
> show starkly opposing views on several key issues.
> 
> The Bush administration, like the giant pharmaceutical companies,
> opposes the creation of any system to regulate world drug prices,
> or the creation of a database where prices could simply be posted.
> The administration, while it has dropped moves against Brazil's
> production of cheap generic drugs, emphasizes that patent rights
> must be protected and wants the companies left alone to offer
> discounts when they see fit.
> 
> The Europeans appear to be siding with poor countries and
> campaigners for cheaper drugs.
> 
> No unified European position has yet been laid out, but different
> leaders and European Council resolutions favor a "tiered pricing
> system," endorse the right of poor countries to shop for cheap
> generic drugs from countries that ignore Western patents, and favor
> the creation of a worldwide database to show prices for all drugs
> from any supplier and to indicate whether the supplier is
> considered reliable.
> 
> While acknowledging that patents are important, the Europeans
> often note that they are blamed for driving up the cost of health
> care, and emphasize the exceptions to patent rights contained in
> world trade treaties.
> 
> "Basically, the European Union is saying that it doesn't want the
> fund to turn into a subsidy for Big Pharma, and the U.S. is saying
> the reverse," said Ellen 't Hoen, a drug price specialist at
> Doctors Without Borders, a medical charity that has led the fight
> for lower-priced drugs.
> 
> The United Nations' global fund to fight AIDS was proposed by
> Secretary General Kofi Annan at a special General Assembly in June.
> He asked donors to contribute $7 billion to $10 billion a year. So
> far, only about $1 billion has been committed.
> 
> The rules governing the new fund are expected to be one topic
> discussed when President Bush meets the leaders of the world's
> seven wealthiest nations and Russia this week in Genoa, Italy.
> 
> The Europeans — to the frustration of the Bush
> administration — have not defined what they mean by a tiered
> pricing system, although the assumption is that it would mean low
> prices for poor countries, high prices for rich ones and some sort
> of system for verifying that it was working.
> 
> Some leading members of the European Parliament appear to favor a
> system like that used for getting vaccines and contraceptives to
> the third world. For those, the pharmaceutical multinationals and
> their generic competitors in countries like India submit bids to
> international agencies like Unicef or the United Nations Population
> Fund, which handle distribution costs. The vaccines or
> contraceptives sell for a fraction — sometimes as little as
> one two- hundredths — of their prices in developed countries,
> and the makers still turn a small profit.
> 
> Price cuts by the multinational companies have been voluntary, in
> response to public indignation and counteroffers from generic
> producers.
> 
> The most obvious targets of the drive are anti-retroviral AIDS
> drugs, which 18 months ago cost as much as $10,000 a year per
> patient, and now are offered by generic makers for as little as
> $350 per year.
> 
> But AIDS also makes the body susceptible to secondary diseases
> like malaria, tuberculosis, pneumonia, meningitis, fungal
> infections and cancer. Pressure on pharmaceutical companies to
> offer poor countries discounts on virtually all therapeutic drugs
> is thus expected to mount.
> 
> The extent of the European-American debate is outlined in a letter
> sent in late June by Robert B. Zoellick, the United States trade
> representative, to Pascal Lamy, his counterpart on the European
> Commission.
> 
> In the letter, a copy of which was obtained by The Times, Mr.
> Zoellick expressed his distress that the commission was endorsing a
> tiered system. The Bush administration is "opposed to the creation
> of an international institution or convention to regulate drug
> prices," Mr. Zoellick wrote. "I also would question establishment
> of a verification process." Further, he stated that "we have
> practical and legal concerns with the concept of maintaining a
> database on drug prices."
> 
> The database, he wrote, would be "difficult to keep accurate" and
> "the sharing of drug pricing information can at times present
> problems under U.S. antitrust laws."
> 
> An official in Mr. Zoellick's office said the letter had two
> purposes. "One, we're challenging them to be specific about what
> they mean by a tiered pricing system," he said. "And, two, we're
> communicating that we're pretty skeptical."
> 
> Mr. Zoellick wrote that he was troubled by the reasons that Mr.
> Lamy's colleagues had offered for tiered pricing, including the
> argument that cheap drugs were still not available in Africa.
> Repeating an argument often made by spokesmen for the drug
> industry, he wrote that it was "more likely the result of the
> enormous infrastructure problems plaguing this region, rather than
> drug prices."
> 
> Millions of AIDS-infected Africans live in cities with hospitals
> or within walking distance of rural clinics, and have enough clean
> water to take pills. Many African countries now treat tuberculosis,
> which involves essentially the same regimen as AIDS requires
> — a daily handful of pills and occasional lab tests. Standard
> "first-line" tuberculosis drugs, however, are priced much lower
> than anti-retrovirals; recently, drug companies began voluntarily
> lowering the prices of their "second-line" tuberculosis drugs,
> which are prescribed if other drugs are ineffective.
> 
> Mr. Zoellick's letter concluded by saying that the drug companies
> ought to be trusted. "We should expect companies to sell at the
> lowest possible prices," he wrote. "However, it appears to me that
> many companies are now doing so; there is no indication that their
> pricing commitments are short-term or of such limited quantity that
> we should doubt their sincerity."
> 
> Doctors Without Borders argued at a drug price conference in April
> that relying on the good will of pharmaceutical companies was not a
> sound approach for battling AIDS. The companies, the charity
> argued, deeply slashed their prices last year "only after immense
> international public pressure began to jeopardize the industry's
> image."
> 
> The official in Mr. Zoellick's office confirmed that the Bush
> administration still backed the policy started under the Clinton
> administration of not seeking trade sanctions on African countries
> that legitimately used patent-nullifying provisions under World
> Trade Organization treaties to get AIDS drugs. "And," he added,
> "about three weeks ago, we settled our W.T.O. dispute with Brazil.
> That's gone down fairly poorly with the pharmaceutical companies."
> 
> 
> 
> Copyright 2001 The New York Times Company
> 
> [Copied as fair use.]
>