Africa AIDS Drug Program Relies On NGOs To Achieve Secure Distribution

Five of the major AIDS drug marketers are counting on the leading non-governmental organizations to develop secure distribution systems for drugs supplied to developing countries.

"Efficient, reliable and secure distribution systems are necessary to ensure that medical supplies and other consumables procured by the public sector NGOs are made available to people who need them at the appropriate contact point within the health system," a statement of intent indicates.

Merck, Glaxo Wellcome, Boehringer Ingelheim, Bristol-Myers Squibb and Roche announced May 11 that they will collaborate with five United Nations organizations to improve access to HIV/AIDS care and treatment in developing countries.

The five companies have "begun constructive discussions with UNAIDS, WHO, the World Bank, the United Nations Children's Fund, and the United Nations Population Fund, to explore practical and specific ways of working together more closely to accelerate access to HIV/AIDS-related care and treatment in developing countries," the joint statement of intent says.

While reimportation has been historically cited as a barrier to implementing drug discounting programs in developing countries, Merck said it is counting on the help of NGOs to establish the standard for controlled distribution.

The parties to the agreement have outlined six guiding principles: (1) commitment from national governments (2) strengthened prevention and treatment strategies to ensure equitable delivery of care (3) engagement of all sectors of national society and the global community (4) efficient and secure distribution systems (5) additional funding from national and international sources and (6) continued investment in R&D by the pharmaceutical industry.

Merck, however, said that countries will not have to prove secure distribution practices to qualify to receive access to discounted therapies.

The statement emphasizes that protection of intellectual property rights "in compliance with international agreements" is essential since society depends on those rights to "stimulate innovation."

The industry/UN collaboration announcement immediately followed a May 10 executive order issued by President Clinton which states that compulsory licensing and parallel trading practices implemented to address the spread of HIV/AIDS in sub-Saharan Africa will be permitted, provided that WTO standards for intellectual property are met.

The U.S. government will refrain from seeking, "through negotiation or otherwise, the revocation or revision of any law or policy imposed by a beneficiary sub-Saharan government that promotes access to HIV/AIDS pharmaceuticals and medical technologies," the order states.

The President's order adds that the law or policy must, however, "provide adequate and effective intellectual property protection consistent with the World Trade Organization agreement on Trade-Related Aspects of Intellectual Property Rights."

Clinton issued the order after efforts by Sens. Dianne Feinstein (D-Calif.) and Russ Feingold (D-Wisc.) to include similar language in the Africa Growth and Opportunity Act final conference report stalled.

The AIDS in Africa amendment met with objection from House Ways & Means Chairman Bill Archer (R-Tex.) and Senate Majority Leader Trent Lott (R-Miss.).

In a May 10 letter to Sen. Feinstein, President Clinton maintained that "this order will give sub-Saharan governments the flexibility to bring life saving drugs and medical technologies to affected populations."

The executive order simultaneously ensures that "fundamental intellectual property rights of U.S. businesses and inventors are protected by requiring sub-Saharan governments to provide adequate and effective intellectual property protection consistent with the World Trade Organization rules," Clinton said.

In December, the President announced that HHS would have a formal consulting role in decisions made by the U.S. Trade Representative pertaining to foreign government claims that patent laws hinder the ability to address public health emergencies (¹ (Also see "HHS Will Consult With USTR On Patent Relief Claims From Foreign Countries" - Pink Sheet, 13 Dec, 1999.)).

While the executive order does not differ materially from existing international policies, it gives the U.S. a degree of latitude in taking action against a country that passes laws nullifying intellectual property rights in order to address the HIV/AIDS situation.

The industry/UN collaboration, on the other hand, is designed to interrupt production of generic versions of patented AIDS therapies, a practice condoned in both President Clinton's executive order and the WTO TRIPS agreement.

Merck CEO Raymond Gilmartin foreshadowed the UN collaboration at the May 3 Wall Street Journal Healthcare Summit in Washington, D.C., when he emphasized the need for a comprehensive solution addressing the crisis of AIDS in Africa, as opposed to a focus on the elimination of intellectual property for pharmaceuticals (² (Also see "PCS "Encouraged" By Pricing Of COX-2 Inhibitors Close To Branded NSAIDs" - Pink Sheet, 8 May, 2000.)).

While forestalling a genericization of their drugs prior to patent expiration, the five collaborating companies are taking a risk on pricing.

Offering meaningful discounts is a calculated risk by the industry to redress the image of inaction in the developing world while potentially fueling the call for lower prices in the domestic market.

However, the positive public health headlines from lowering AIDS drug prices for the developing world may give the companies a new way to explain international pricing differences by demonstrating the need to subsidize some markets.

While staff members from the Pharmaceutical Research & Manufacturers of America staff were not directly involved in the planning of the joint collaboration for access to HIV/AIDS care in Africa, the association alluded to a similar program in its May 10 response to the President's executive order.

PhRMA stated that "the approach taken by the President's executive order sets an undesirable and inappropriate precedent, by adopting a discriminatory approach to intellectual property laws, and focusing exclusively on pharmaceuticals."

The industry association added that "we look forward to governments, international agencies, non-governmental organizations and the private sector working collaboratively to develop responsible solutions" to AIDS.

PhRMA's concerns regarding the industry's intellectual property position were highlighted last fall when the Administration initiated discussions on South Africa's compulsory licensing program for pharmaceuticals.

Although PhRMA ultimately agreed with the decision to remove South Africa from the Special 301 "watch list," the association expressed disappointment that the country was removed prior to the completion of patent law reforms.

Bristol, Glaxo and Merck have preexisting HIV/AIDS programs in developing countries, which could be leveraged under the industry/UN initiative.

Merck established the Enhancing Care Initiative program with the Harvard AIDS Institute and the Harvard School of Public Health in 1998.

The Enhancing Care Initiative offers HIV testing and counseling, basic medical care services (including HIV/STD prevention), lab and diagnostic services, clinical management, and therapeutics, the company said. ECI operates in Thailand, Senegal, Brazil, KwaZulu-Natal and South Africa.

Bristol's Secure the Future program is a five-year, $100 mil. commitment initiated in May 1999 to help women and children with HIV/AIDS in five southern African countries. The program is funding clinical trials in South Africa, Botswana, Namibia, Lesotho and Swaziland and assures continued access to drugs after the end of the studies (³ (Also see "Bristol-Funded Africa HIV/AIDS Research Program Will Treat Subjects For Life" - Pink Sheet, 13 Dec, 1999.)).

Glaxo is also involved in a number of preexisting collaborations to address the spread and treatment of HIV/AIDS in developing countries.

Glaxo is working with UNAIDS on a Treatment Access Initiative Pilot Program, a Mother to Child Transmission Program, a long-term HIV education program, and has worked with UNAIDS and the U.K. National AIDS Trust to establish the Global Business Council on HIV/AIDS.