Healthy Skepticism Library item: 1154

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Publication type: news

Buck T.
EU acts to speed up flow of cheap Aids drugs
2003 May 26

Full text:

European Union governments on Monday moved to ease the flow of cheap drugs into more than 70 developing countries suffering from high levels of HIV/Aids, malaria and tuberculosis.

The three diseases are the biggest killers in the developing world, where they afflict more than 300m people every year and cause more than 5m deaths.

Progress in tackling their spread has been hampered by the absence of an effective vaccine and the prohibitively high cost of drugs for treatment.

Though there are numerous schemes to encourage pharmaceutical companies to sell their drugs at heavily discounted prices, some have been reluctant to do so out of fear that their products would be sold back into Europe, undermining some of their most lucrative markets.

The new law addresses these concerns by prohibiting the re-importation of drugs from 76 countries, mainly the least-developed nations in Africa, but also India and China. The ban only extends to products used in the fight against the three diseases, and companies must show that they are sold at a significant discount to the prices they charge in developed countries.

This means the drugs must be sold at either a quarter of the average factory price in Organisation for Economic Co-operation and Development countries, or at the cost of production plus a 15 per cent margin.

Pascal Lamy, the trade commissioner, hailed the new law as “an important contribution to a global partnership ensuring cheap yet sustainable supply of key medicines to the populations of poor countries”.

However, his enthusiasm was not shared by the charity Oxfam, which claimed the move would do little to increase the affordability of drugs in developing countries. “Aids drugs cost at least €10,000 (£7,000, $11,500) per year in Europe. Under this new rule, the tiered [discounted] price would still be €2,500,” said Sonia Vila-Hopkins of Oxfam.

She said such a price cut would make little difference in a country like Zambia, where – as Mr Lamy observed himself yesterday – the health ministry can only afford to spend $1 on every citizen each year.

The new regime was also criticised by the pharmaceutical industry, which claimed the rules were too rigid and would do little to encourage companies to increase their exports of discounted drugs to developing countries.