Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.


Doctors, drugs, and the poor
Atul Gawande, The New York Times, 5-17-07

Gawande suggests that international drug companies have a moral obligation to help make expensive new drugs affordable in low–income countries. This judgment seems correct—but policymakers and NGOs also have a responsibility to protect companies patent rights and offer them a fair return on their investment. This will help companies develop the next generation of miracle cures for poor and rich nations alike.

One potential strategy would be for international donor organizations like the Global Fund and U.N. agencies to help poor countries pay for drugs on a sliding scale.

The poorest countries would get the largest subsidies, while middle income nations would have much smaller subsidies—with wealthy nations paying full cost. This strategy would spread the costs of research and development more fairly across the widest possible base, and encourage more companies to market their medicines in places like sub–Saharan Africa.

First, for almost a decade, we in the West ignored the possibility that antiretroviral drugs could be used in the developing world. (Remember the 2001 claim of U.S. government officials that Africans couldn't learn to take the drugs on time because they didn't have watches?) Then, under international pressure, drug companies made some discounts, but they were not deep enough. (A year's supply was still more than $1,000 per patient.) Only when an Indian generic manufacturer provided a copycat three-drug regimen for $150 per year and major donors stepped forward did distribution effectively reach poor countries.

We're now in the throes of another round of H.I.V. drug battles, this time over advanced, but even more expensive drug regimens from Merck and Abbott Laboratories. Last week, the Clinton Foundation endorsed decisions by Thailand and Brazil to break the companies' patents and purchase cheaper, copycat versions of the drugs. Abbott retaliated by withholding seven new drugs from Thailand, including an antibiotic, a painkiller, and a medication for high–blood pressure. The fight has become vicious.

In a way, it's hard to see how the confrontation could be avoided. The cost of developing a new drug now approaches $1 billion, and companies do need profit margins to recoup that cost and encourage new innovation. Yet, once a life–saving discovery is made, it is clearly grotesque to make millions suffer or die while waiting for a 20–year patent to expire.

The experience with H.I.V. drugs is oddly heartening, though. There is, in fact, a spectrum of behavior among pharmaceutical companies—just like with doctors. Gilead Sciences has granted licenses to generic manufacturers to supply its blockbuster H.I.V. drug, Viread, to the world's hundred poorest countries at the reasonable royalty rate of 5 percent of sales. Bristol–Meyers Squibb licensed its second-line drug, Reyataz, completely free of royalties to generic manufacturers for India and southern Africa. And through the World Health Organization's bulk vaccine purchasing arrangements, manufacturers have been able to make significant profits selling vaccines at low cost but large volumes. This is the progress we want to build upon.

Pressure to broaden these efforts will grow, and it should. Agreement on regional pricing tiers and distribution networks for H.I.V. drugs show likelihood of solidifying in ways that make drugs available and support innovation, but we have nothing like it for drugs for heart disease, lung disease, or cancer. Meanwhile, the world is changing. The No. 1 cause of death in India, China, and Vietnam is not H.I.V. It's heart disease. Cancer is in the top 10. Their people need clot–busting drugs, chemotherapies, and EKG machines just like everyone else. Manufacturers need to show the same willingness to make these life–saving technologies available to the poor.

Project FDA.
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