Big pharma shuns drugs plan for world’s poorest

By David Cronin

Date: 20/07/05

The European Commission has revealed that only one drugs company has signed up to a scheme it proposed nearly three years ago on providing affordable medicines for AIDS and other major killers in poor countries.

In October 2002, Pascal Lamy, then the trade commissioner, recommended a regulation for 'tiered pricing', under which drugs for AIDS, malaria and tuberculosis could be sold at cheaper prices in developing countries than in the EU. At the time, he said that the Union wanted "to set an example with a practical means of helping poorer countries struggling with public health crises".

Yet a report by the Commission expresses regret that only the UK-based multinational GlaxoSmithKline (GSK) has so far registered any medicines under the regulation. The scheme applies to 76 countries, but only 26 have benefited from it. Apart from Haiti, all are in sub-Saharan Africa.

The paper maintains that tiered pricing is the "best way forward" for dealing with the three diseases, which kill six million people a year. The system is based on the principle, it says, that profits made in richer countries can support lower drugs prices in poor nations.

The paper says that the practice of several major drug-makers of donating medicines free to certain countries does not offer a "sustainable solution". In particular, it says that Pfizer-manufactured Difulcan, used to treat infections linked to HIV-AIDS, would be a suitable candidate for registration, as would Coartem, an anti-malaria drug produced by Novartis. Difulcan has been distributed in some poor countries through a donation programme.

Some drugs firms had expressed fears that tiered pricing could lead to medicines destined for poor countries being re-imported illegally into Europe. Yet the Commission says it has found no evidence of this occurring with the nine products GSK has registered. The scheme is also known as the anti-trade diversion regulation.

Christophe de Callatay from the European Federation of Pharmaceutical Industries and Associations said: "[The] industry fully supports the objective of the regulation. It is clear that the diversion of differentially priced products from their intended recipients is both morally and politically unacceptable. But most companies believe that the mechanism set in place is inappropriate."

An industry source said that one reason why firms opposed the plans was because they were concerned at attempts by the Commission to determine the prices of medicines, something that is normally the preserve of national governments.

Seco Gerard from Médecins sans Frontières argued that the regulation was symptomatic of the EU's inability to grapple with the AIDS pandemic in poor countries. "The Commission is giving the impression that this is a very important regulation, yet GSK was already offering its products at tiered prices before the regulation even existed. Tiered pricing could be part of the solution.

But our experience has shown that more competition has led to tiered pricing. It's not because we have an anti-trade diversion regulation."

Earlier this month, the Group of Eight (G8) leading industrialised countries promised to provide access to medicines for all AIDS patients in poor nations by 2010. This followed an admission by the World Health Organisation that its goal of putting three million AIDS sufferers on anti-retroviral treatment during 2005 will not be attained.

Shiba Phurailatpam from anti-poverty group ActionAid said that Europe had a key role to play in boosting access to medicines for the needy. About 95% of patents for AIDS-drugs were held by firms in rich countries, he added.

Article reports that according to a European Commission paper only the UK-based multinational GlaxoSmithKline (GSK) had so far registered any medicines under the EU Regulation on 'tiered pricing', under which drugs for AIDS, malaria and tuberculosis could be sold at cheaper prices in developing countries than in the EU. The paper also said that the practice of several major drug-makers of donating medicines free to certain countries did not offer a 'sustainable solution'.

• Primary Source

European Commission: DG Trade: Trade Issues: Harnessing Globalisation: Access to essential medecines http://ec.europa.eu/comm/trade/issues/global/medecine/ip280403_en.htm

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