Drug Companies Put Profits Over Lives 24
pHaze writes: "An article on BBC news says 39 Pharmaceutical companies have taken the South African Government to court to try and block legislation which gives the SA government powers to import or manufacturer cheaper versions of brand-name drugs, specifically HIV and AIDS medication. This is an interesting clash of intellectual property rights versus morality, and if the SA government wins this one (and it looks like they might), does it set a precedent on government's ability to violate international patents at will?"
Too late for education? (Score:2)
In SA, it is tragic that so many are infected with HIV and AIDS, but it isn't too late to educate the masses. If they do have an education plan it is obviously ineffective.
AIDS is essentially a behavioral disease, it can only be caught (in 5 9 of cases) through risky behavior. Education about safer sex or clean needles or universal testing would go far to stymie the disease's growth.
Providing medicine is like putting out a forest fire with a garden hose. You can stop the symptoms, but the disease spreads unabated. It doesn't help that certain African presidents block AIDS education because they don't believe HIV causes AIDS and want to spend more precious time researching the disease.
Dancin Santa
Eating the seed corn (Score:2)
This is one of the unintended consequences of a combination of factors, including the WTO and the elderly lobby in the USA. The USA does not regulate drug prices (yet), so consumers in the US wind up subsidizing research and development of drugs which then wind up being available much cheaper in places like France and Canada. Medicines are so much cheaper in Canada (due to price controls) that people cross the border to order their prescriptions. The money lost comes straight off the drug companies' bottom line. (They spend a heck of a lot on promotion as well, but given that most of their trials come up duds they have to make it up on the few successes they have.)
AIDS is a horrific phenomenon, but the drug companies are legally responsible for their own survival first and foremost (see "fiduciary duty" and "shareholder lawsuit"). If Brazil and South Africa declare a national emergency and make the patented substances available essentially at cost, the profit disappears in those nations. Not only does this destroy the incentive to market or research for those nations, but under the WTO rules it becomes very difficult to prevent those generic drugs from going to the rest of the world. The drug companies could see their entire market for AIDS drugs wiped out. Their shareholders would demand a pullback from research on the unprofitable sector, and that's it for AIDS drug development. This same phenomenon could spill over to drugs for other conditions. I know there are a lot of people who are strapped to pay for medicine for their conditions, but 40 or even 20 years ago they probably had less-effective drugs with worse side effects or even no drugs at all. For some reason they prefer the new, expensive stuff to the old, cheap stuff that's now generic. What's worse: being broke or being disabled/dead? I hate to put it in those terms but I think I'd prefer being broke.
All in all, it's a really tough situation and it stinks. Mostly it stinks because there's something we can do about it in any individual case, but the scale of the need overwhelms what we can afford. It's not unlike trying to keep a nation full of old people alive; no matter how much money you throw at it you are not going to eliminate the problem because it keeps getting worse at the margins. Solution? I wish I had a solution that was both palatable and affordable without any dangerous pitfalls for the future.
One thing that is certain: the person who never contracts HIV (or Ebola, or tuberculosis) is never going to need treatment. Prevention should be at the top of every nation's priority.
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No one expects the Spammish Repetition!
Aids (Score:1)
Re:Eating the seed corn (Score:3)
Profits from drug sales are definitely essential to researching new treatments. The important thing is that no significant profit is currently being made in South Africa, so there's no profit to be immediately lost by selling those patients drugs at low cost. The only way for them to lose money is if the low-cost drugs take the place of high-cost versions in markets that can actually afford the higher priced drugs. The drug companies are not sacrificing those thousands or millions of lives for the sake of research into future treatments. They are not even doing it to protect next year's bottom line. They are allowing every one of those people to die simply to make it clear that they control the prices, and they'll change them if and only if they want to.
I do have to agree completely with your last point, though. Education and prevention are more important than anything else.
Companies back down (Score:1)
Re:Eating the seed corn (Score:1)
I am well aware of the argument that they are legally responsible to their stockholders, as appalling as this concept is for the future of the world. This does not change the fact that a previous poster made that they are not making money in SA anyway. It would be fabulous if an industry based on helping people stay healthy actually cared about poeple and not only about profits, eh?
US does it too. (Score:1)
as RMS likes to point out in his talks about patent law, in the US, patents are not enforcable against doctors.
this is no different.
greetings, eMBee.
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Re:Oh but remember... (Score:1)
Have you ever looked at how much money our government spent to build a toilet for the space station? They could easily give a billion dollar prize for a cure to just one type of cancer. Once the discovery was released, we could mass manufacture it cheaply. The high prices for aids drugs are artificial. They aren't that expensive to make.
Which would you rather have? The government forks over a couple million now, or everyone pays millions of dollars for those drugs over and over. Do you know how many billions of dollars are spent on medicare? In the last year, the press revealed that doctors were prescribing higher cost drugs over generics to scam medicare. The drug companies convinced them to.
Re:Eating the seed corn (Score:1)
CNN says differently (Score:1)
Corporate America bashing is very popular here on
Well, we can at least pretend
Re:Educate South African President Thabo Mbeki... (Score:1)
We can all (well, those of us who find the profitmongering drugcos to be despicable, anyway) be happy that the evil 39 (and their own personal RIAA, called PhRMA) have dropped their silly nonsense suit against the struggling South African nation. Now, at least, treatment may commence, even if the education/prevention program must undergo considerable rebuilding. This is simply a case of South Africa needing to strap on its own oxygen mask, as it were, through treatment, before assisting small children in donning theirs (prevention).
more info (Score:2)
How like humans, (Score:1)
Re:Too late for education? (Score:2)
* being born to a parent with HIV and thus having HIV ever since you were born
* getting blood transfusions with infected blood (not a problem in the US, but still a problem in other countries)
* contracting the disease during doctor or dentist visits/surgical procedures (not common in the US, but very common elsewhere)
These are just a few examples. So yes, individuals should be educated about the risk of contracting the disease, but others, especially health care providers, also need to be educated about ways to stop spreading the disease.
Re:Eating the seed corn (Score:2)
I'm not saying that the drug companies should not be able to profit, just that the research done at taxpayer expense should be in someway factored into the amount the drug company is able to profit from a drug where the choices are pay the price they set or die.
Re:Eating the seed corn (Score:1)
Re:Too late for education? (Score:1)
Dancin Santa
Re:Eating the seed corn (Score:2)
That is correct. Your average South African bloke cannot afford the treatment so they only have one option and that is to die.
In fact, many clinics/doctors/organizations in Africa cannot even afford to buy any significant amount of such drugs.
60 minutes presented an excellent review of what is currently happening in Africa with regards to the pharmaceutical industry. They noted that India has no patent law for drugs (because apparently the government in a fit of charity does not allow that to happen so that their people can afford drugs) and that a prominent drug company in India, which manufactures generic versions of the drugs that are made in America, is selling these low cost medicines to African countries. They also noted that the large pharma corps were trying to stop the Indian company from selling their drugs in Kenya among other places. They focused on "sleeping death" in the segment and how people were dying there but they had no money with which to buy the medicines. They later interviewed a spokeperson for the pharma industry who said that they are for profit entities and that the activists/doctors/patients should be talking to their government to foot the bill.
I do not disagree with the idea that the pharmaceutical industry should be able to turn a profit to enable their continued research into new medicines but really now it is awful for them to try to block the Indian company from selling these low cost alternatives. After all, they have no market in those countries in the first place.
whats cool is (Score:1)
On a side note, Glaxxo and several other companies agreed to sell the drug at 98% discounts from American prices. This was a last ditch effort to stay in the market.
Think of it, if the drug companies had "found Pretoria guilty" or whatever, their options were quite limited - i.e. refusing to sell aids drugs to the continent wouldn't of have gone down well with their marketing dept, nor would pretty much anything else - trade embargoes on a national level would be the only thing that they could use. South africa would say "OK" to the embargoes, because the US is not exactly the #1 supplier of stuff to S.Africa. Besides, S.Africa is pretty fucking poor, as is the entire continent - Oh no, the kids don't get their pokemon wouldn't of have worked here.
Oh well..
I have a shotgun, a shovel and 30 acres behind the barn.
Educate South African President Thabo Mbeki... (Score:2)
Now Mbeki wants to blame the drug companies. Regardless of the moral issues of drug company pricing strategies, South Africa's problems will not be solved until its leadership faces them head on and stops trying to allocate blame and make excuses. Lack of leadership on this issue is the major reason that 1 in 9 South Africans are infected with HIV, and 1 in 5 pregnant women in Soweto township are HIV positive.
Thabo Mbeki is a big part of the problem. It's a pity that the African National Congress (ANC) couldn't find a more worthy successor to Nelson Mandela.
An essay I wrote on the topic (Score:1)
Why Intellectual Property (Namely Patents) Are Bad
The first major problem with intellectual property is that when one company (or consortium thereof) has control over a market, prices have a tendency to be fixed, as there is only one supplier. This does not only apply to non-tangible items, it is evident in most, if not all aspects of the retail market. Diamonds, Music CD's, College Textbooks and a variety of other items are priced pretty much the same, often with the price several hundred or thousand percent higher than the cost of production (i.e. Nike shoes made in China). Clearly price fixing does not help the consumer - it helps the company selling the product. That, by itself, is not bad, as it is the basis of a capitalist society, and the reason why the majority of us have jobs. Capitalism is based on making something for a certain price / offering a service and then getting other people to sell the product at a higher price, finally giving the difference to people along the line.
Officially, monopolies are illegal, but patents give a single company the exclusive right to produce a product for a certain amount of time. This gives the company the "rights" of a monopoly - the ability to set prices, to set the amount produced, to define the supply / demand characteristics of the particular market.
How sales of cheap drugs would benefit the drug industry
Financial Reasons
The business of medicine is very lucrative, as there will (at least in the foreseeable future) always be sick people. This cocktail is not a cure for AIDS, far from it. Eventually the patient will die, however these drugs can extend the patient's life for 10, 15, even 20 years. A great deal of money can be made during this time - even if the drugs are sold at discount prices.
According to the United Nations, there are about 34.3 million people currently living with aids/HIV worldwide. Assuming the drug cocktail was distributed at the price of $350 to each of the 34.4 million people, the drug industry would receive $12,005,000,000 US a year from the sale of these drugs.
If we take a average 10 year life expectancy from these drugs, and assuming the current number of AIDS patients, 10 years of selling the drugs at the reduced price would net the drug companies $120,050,000,000.
Incidentally, if the drugs were supplied at the current US going rate of $10,400, yearly net proceeds would be in the area of $356,720,000,000. 10-year proceeds would be in the area of 3.2 trillion dollars; by comparison, the United States Debt is about 5.7 trillion .
One major fact to keep in mind is that the number of AIDS cases is increasing worldwide, and although promises of cures / vaccines have been made, there have been only disappointing results.
In any case, under the current policies of the drug makers, the same price fixing would occur if a cure or vaccine were invented.
I was (expectedly) unable to receive an official cost of producing the drug cocktail, nor information on production - numbers, capabilities, future plans, etc... I am therefore unable to make statements regarding profitability, et cetera. However a source in the medical industry revealed that Cipla would be making a profit on the sale of these drugs - not a significant profit, but enough to open new production facilities.
Another major reason why drug companies should drop their price is that countries are beginning to take matters in their own hands - South Africa has begun talks with Cipla about helping its citizens get medication, blatantly ignoring "worldwide" patent / copyright "law". Similarly, the government of Brazil, as a result of the effects of AIDS on its population; has stated that they will suspend patents on medical drugs unless the major drug companies reduce the price of AIDS drugs.
If the drug industry does not get in line quickly, similar actions are likely to occur in many countries with high AIDS rates; in this case, drug companies would be shut out from the market completely, and would make nothing.
This sets a precedent for the future - countries can and will refuse to pay royalties or abide by ANY copyrights or patents. Countries would make their own drugs; and may even go as far as copying any product that would be cheaper to produce inside its borders on a large scale. This would clearly have grave effects on the global market. Consider that case of software piracy - rampant piracy gives yearly losses of several billion dollars.
If countries blatantly rejected international patents / copyrights, the drug companies would have little recourse. The United States (in its current state at least) is not going to go to war against a country for violating a patent - especially a patent that is being violated for humanitarian reasons. Sanctions would also have limited effectiveness - assuming that sanctions would not be forced off the floor of Congress.
Mass production would, in the long run, make the drug companies more money; especially considering that AIDS is infecting a greater number of people daily. Research into a cure should still go on, however I believe governments should be responsible for development (as drug companies would have a conflict of interest - namely the one hundred twenty billion US dollars over ten years).
How sales of discount drugs will help people:
Historical Reasons
Less than 50 years ago small pox was a leading cause of death in the world.
In 1968, WYETH (American Home Products parent company) waived the patent royalties on its bifurcated needle. This move allowed immunizations on a massive scale - 200 million smallpox vaccinations per year. Combined with outbreak control techniques reduced small pox deaths dramatically - so dramatically that in 1979, the World Health Organization declared the eradication of smallpox. Through a massive and admirable effort, smallpox was eradicated over a period of eleven years - something that would not of have been done without the royalty waiver.
WYETH and American Home Products are still around today and make quite a bit of money on its sales of products such as Advil and Robitussen. American Home Products took a significant hit in the pocketbook and allowed the eradication of smallpox.
Historically, when intellectual property has been given away for free, there has been a positive effect. Granted, the company that holds the patent loses money, but it is for the greater good.
How sales of discount drugs will help people
Current Reasons
When people are unable to buy medication and die as a result, clearly people are hurt. This sentence is very brutal, but reflects the facts of AIDS and of life in general.
Most of the poor countries of the world have a population that cannot afford to pay for a drug cocktail; tragically, the governments are not much better off and are unable to pay the going rates on the medication for their population. However if the MSF (Doctors without Borders) provides AIDS cocktails for free, then
It was mentioned that the cocktail is not a cure for aids - however the cocktail allows for the person to live a longer life - possibly extending the lifetime to a pre aids epidemic life expectancy - or close to it - and possibly letting the person see the day when a cure for aids is found. In Zimbabwe, the life expectancy has dropped from 65 to only 39 due to AIDS. Denying a person the drug cocktail is denying the person's chance to be cured and ultimately sentencing them to death.
The Other Side of the Coin
There needs to be money to do Research and Development, companies also can not afford to give out medication for free - especially when the cost of production is not the only money that a company loses. When another company replicates your drugs, you lose money that would otherwise go into back into the company - and that means less money for research and development.
Patents were created for that purpose - to reward the inventor and keep him or her inventing.
The major drug companies have dropped rates on some drugs by up to 90% for some third world nations - effectively reducing the price to $1,008 to $1,821 a year , this is a great discount, especially considering that these drugs are guaranteed authentic, quality control is always an issue - authentic drugs are almost impossible to tell apart from colored sugar pills - and the manufacturer of the drug is more trustworthy than some company who makes medication in a third world country. Moreover,
Rebuttal
Accepting the drug companies arguments can be difficult, but in some areas, they have merit, in other areas, the arguments are purely FUD . Fortunately, most of the FUD can be easily refuted; take, for example, the industry claim that it needs money for research and development - outside of company expenses (salary of workers, dividends, etc.) 40 percent of the money that Glaxo spent lat year was not in R+D or salary, but in marketing of its products in Europe and North America.
The price cuts are significant, however, the drugs are still out of reach for most of the population of the third world, even at the reduced prices, there is a significant portion of people in the United States that would be hard pressed to pay for drugs at the discounted rate, not even mentioning what the rate is today.
Conclusions
That is needed for the here and now is an offer by the major drug companies to reduce the cost of the AIDS cocktail to affordable levels - not only in the third world, but in the First and Second worlds as well. AIDS infects several million people and the market of selling these life-extending drugs is lucrative even at extremely discounted prices - several billion dollars could be netted yearly by the drug companies and even with a meager profit margin, a great amount could be made in treating people with the disease - hopefully letting them live long enough to be cured.
With such positive effects, it is difficult to see how profit margins can get in the way - the lack of ethics is repulsive and disgusting to the highest degree. Price gouging of the sick and dying is essentially what is happening - some would even say murder - there is no question that these people will die without medication, and any statement about "they are going to die anyways", is ludicrous, cold hearted and amounts to supporting "involuntary euthanasia", if not murder.
Drug companies should use their funds more responsibly and be willing to take cuts in their income for the greater good of mankind. American Home Products could of have made billions if they had not released their patent on the bifurcated needle, but didn't, and by doing so, became a key player in eradicating smallpox.
Drug companies eventually will come to realize that by not selling drugs at an affordable price, they risk having foreign nations make the drugs themselves or get them from somebody else - any government that cares about the health and safety of its citizens is ethically and morally obliged to pursue such measures - even if those measures will bring repercussions.
In a situation as dire as this one, where quite literally millions of lives hang in the balance, there is a need for change in the business practices of the drug companies - whether this be by government intervention and the "suspension" of patents, or by a willing change by the drug companies themselves.
The current situation involved the lives of millions weighed against a company's profit margins; it is clearly and brutally evident why intellectual property should be put aside in this matter if drug companies do not change their policies.
I have a shotgun, a shovel and 30 acres behind the barn.
Thabo Mbeki (Score:1)
It's a pity that SA has devolved into the hellhole that it currently is, but that's a whole nother diversion.
Dancin Santa
Oh but remember... (Score:1)
The G8 countries like the US have declared that they would bring the wonders of the information age to underdeveloped countries. I guess they can suck on that for all it's worth.
There is a very simple way to get around this problem. Make it illegal to patent a drug that can save the life of potentially millions. Then let the government offer prizes to anyone who makes advances and shares them with humanity.
It is not communism to demand that you share a life saving invention with mankind. Communism is about the redistribution of physical wealth, which is scarce. Intellectual property can't be redistributed because it is a concept in your mind. Lots of people are dying because of a fairy-tale that we are telling ourselves.
Re:Oh but remember... (Score:1)