The American Spectator

Special Report

Stealing Drugs, Hurting the Poor

By Doug Bandow on 8.16.07 @ 12:07AM

Among the most obvious benefits of modern technology is improved health care. Some of the greatest medical advances have been new pharmaceuticals.

But medicines don't magically appear. They will not be produced if prices don't reflect research costs.

Unfortunately, some foreign governments, such as Thailand, don't care about what medicines patients will need tomorrow. Bizarrely, a gaggle of Democratic congressmen has endorsed Thailand's plan to steal American-made drugs. Several non-governmental groups supposedly concerned about patient health also are pushing policies which will discourage future pharmaceutical research.

HIV/AIDS stopped being a death sentence only because of the development of a variety of pharmaceuticals, beginning with AZT. But many AIDS sufferers in the developing world are not receiving antiretroviral (ARV) drugs. With the number of AIDS patients expected to hit almost ten million by 2010, the need for additional drugs will only grow.

Of course the poor should be treated. But the question is how? Policymakers have to decide whether the drugmakers be enlisted as allies or treated as enemies. Should governments simply steal from companies medications developed at great cost?

Last year America's drug and biotech firms devoted $55.2 billion to pharmaceutical development. The Tufts Center for the Study of Drug Development estimates that on average every drug takes 10 to 15 years to reach the market, at a cost of $800 million. Unfortunately, companies discover far more dry holes than blockbuster drugs, so the prices charged for the few successful medicines must cover the entire research and development bill.

The expense can be high for Third World nations, but pharmaceutical costs are not the primary barrier to AIDS treatment. Note Jeremiah Norris of the Hudson Institute and Philip Stevens of the International Policy Network, "Even second- line drug prices are small change compared to the cost of the medical infrastructure required to administer these complicated medicines." Moreover, governments routinely impose tariffs and taxes on life-saving pharmaceuticals and create burdensome regulatory barriers to their production and distribution.

Nevertheless, politicians rarely consider the impact of their policies on drug availability. Even middle-income countries have increasingly been demanding confiscatory price cuts and issuing compulsory licences, effectively stealing patented products.

Most recently, Thailand refused to honor the patent for Kaletra, an AIDS drug marketed by Abbott, and Plavix, a blood- thinner co-marketed by Sanofi-Adventis and Bristol-Myers-Squibb. Last November Bangkok seized Merck's patent for Stocrin, another ARV. The military junta then threatened to break several more patents and, in late July, announced plans to confiscate foreign drugs for additional diseases and health care programs.

"We want lower prices," declared Mongkol Na Songkhla, Public Health Minister in Southeast Asia's second largest economy. But the issue is not inability to pay. Observes Paul Howard of the Manhattan Institute, "While the government cries penury, its defense budget has increased by over 30 percent." Moreover, Thailand has imposed a range of duties, tariffs, and taxes on medicines.

UNFORTUNATELY, OTHER NATIONS HAVE ENGAGED in the same practice, and not just for ARVs. Brazil, an even wealthier middle-income nation which possesses the globe's 10th largest economy, has followed Thailand in seizing Abbott's Kaletra patent and Merck's Stocrin patent. Again, the ability to afford drugs is not the issue: Brazil has spent lavishly on wasteful state enterprises, dabbled in nuclear weapons, and launched a space program.

Although India has implemented new patent legislation protecting intellectual property, the anti-cancer drug Gleevec has fallen into an exception. A court rejected Novartis's legal challenge in early August. Activists are pushing South Korea, an Asian "tiger" with one of the world's top economies, to break Novartis' patent for Gleevec.

In all of these cases, governments of prosperous states are seeking to win political points by demonizing the companies which produce the products which offer their peoples hope. The motto seems to be: Why pay for what you can steal?

Some activists plead human rights. Alicia Ely Yamin of Harvard wrote: "Human rights law not only offers an alternative paradigm for understanding issues relating to the availability and distribution of medications, it also provides a workable framework for influencing the way in which adjudicative and legislative bodies, as well as other actors, make decisions that affect access to medications."

Thus, someone must provide drugs to those who need them because patients have a right to life, health, an adequate standard of living, and the benefits of scientific progress. Moreover, someone must provide medicines since failing to do so would have a disproportionate effect on children and discriminate against the poor and vulnerable. To defend property rights is to favor "patent protection and profit over saving lives."

Letter to the Editor

topics:
Taxes, Trade, Health Care, Law, Military, Nuclear Weapons