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AFRICA ACTION Africa Policy E-Journal April 30, 2003 (030430)
Africa Action: Action Updates (Africa Action document)
This posting contains two recent press releases from Africa Action, one responding tof President Bush's press conference yesterday and the other issued in advance of last week's demonstration at the South African Embassy in support of the Treatment Action Campaign in South Africa. Africa Action joined ACT UP New York and Philadelphia, Health GAP, African Services Committee and Student Global AIDS Campaign as co-sponsor of the embassy demonstration which brought out several hundred people. Similar events were held around the world, with groups calling attention to the 600 people a day dying of AIDS in South Africa and the urgency of action to provide treatment. [A report of the Washington demonstration appeared in the Washington Post for April 25: see http://www.washingtonpost.com/wp-dyn/articles/A35426-2003Apr24.html ]
Also included are plain text versions of two new background fact sheets from Africa Action, for use in local organizing. For formatted versions of these and additional similar resources, see http://www.africaaction.org/action/campaign.htm
Another posting today contains additional related updates from the Treatment Action Campaign, the National Association of People Living with HIV/AIDS (NAPWA), and Healthgap.
Also last week, responding to the initiative of Africa Action, the city of Richmond, in West Contra Contra County, California, adopted a resolution to boycott World Bank bonds until the World Bank cancells its debt claims against impoverished countries. For a press release and a copy of the resolution, see http://www.africaaction.org/desk/pr0304d.htm
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Africa Action Press Release
April 29, 2003
Contact: Ann-Louise Colgan (202) 546-7961
Africa Action says White House still slow to act on AIDS crisis
Bush promise to Africa not being fulfilled; Money needed now to fight greatest global threat to human security
Tuesday, April 29, 2003 (Washington, DC) - Today's call from President Bush for quick action from Congress on the global AIDS crisis comes in response to pressure from Africa Action and other groups, demanding a greater U.S. commitment to defeating the AIDS pandemic.
Salih Booker, Executive Director of Africa Action, said this afternoon, "The Bush Administration is finally beginning to grasp the gravity of the AIDS crisis in Africa, and it now acknowledges that AIDS is the greatest global threat of our time. However, the White House is still failing to match rhetoric with resources."
In his State of the Union address in January, President Bush identified Africa's AIDS crisis as a U.S. priority and promised an 'emergency' response. However, the President has requested no new money for this year (2003), and his budget request for 2004 included only $450 million in new money to fight AIDS. In the Rose Garden today, President Bush indicated his support for the Hyde Bill, which would authorize $3 billion for global AIDS in FY2004, earmarking up to $1 billion of this for the Global Fund to fight HIV/AIDS. This is at least an improvement over the President's own request.
Salih Booker said today, "The Hyde Bill represents the minimum that the U.S. should be doing to fight global AIDS next year and any attempts by conservatives to restrict this initiative will be seen for what they are - anti-African in the extreme. Beyond this authorization bill, money is still urgently needed this year, and especially for Africa. President Bush made a commitment to saving lives in Africa, but millions more will die this year unless the President acts to mobilize money NOW!"
Booker added, "We need an emergency supplemental for this year to support a war on AIDS. After all, the Bush Administration secured $79 billion in a supplemental for war in Iraq. Even Secretary of State Powell has said that AIDS is the biggest threat on the face of the earth, yet the money needed to fight this threat is not forthcoming."
Booker continued, "What U.S. policy needs to prioritize is an increase in money for AIDS this year, specifically support for the Global Fund to fight HIV/AIDS. Next, Africa's illegitimate debts should be canceled, enabling governments to spend money on health care instead of debt repayments. Finally, the White House must break with the pharmaceutical industry and support African countries' access to cheaper, generic drugs. These measures are essential to waging a successful war against AIDS."
Africa Action continues to mobilize support across the U.S. for its Africa's Right to Health Campaign.
For more information, see http://www.africaaction.org
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Africa Action Press Release
April 24, 2003
Contact: Ann-Louise Colgan 202/546-7961
Africa Action Confronts South African Government
AIDS Activists Demand Treatment for People Living with HIV/AIDS; Protests today at South African Embassy in Washington, DC and around the World
Thursday, April 24, 2003 (Washington, DC) - This afternoon, Africa Action will join with AIDS activists around the world in a Global Day of Protest to demand that the South African government provide AIDS treatment to all those living with HIV/AIDS in South Africa.
At 1 pm, protestors in Washington, DC will deliver 600 pairs of shoes to the South African Embassy at 3051 Massachusetts Avenue, NW. These shoes symbolize the number of people dying in South Africa each day without access to AIDS medications.
Africa Action's Executive Director, Salih Booker, said today, "There are nearly 5 million people living with HIV/AIDS in South Africa. They have a right to health!"
He continued, "Two years ago, we joined with activists around the world to defeat the pharmaceutical industry's attack on South African laws promoting access to affordable healthcare. Last year, following an unsuccessful dialogue with South Africa's Ambassadors in Washington and New York, Africa Action wrote President Thabo Mbeki pleading for an aggressive government assault on AIDS and Poverty. Today, we mourn the unnecessary loss of life resulting from Pretoria's inaction and we demand treatment access for all!"
The global day of protest was initiated by Treatment Action Campaign (TAC), a leading grassroots AIDS activist group in South Africa. Today's actions form part of TAC's campaign to force the South African government to institute a national HIV/AIDS treatment plan. Despite massive national and international pressure, the South African government has refused to support a national plan to provide treatment and care, including access to anti-retroviral drugs, to all those living with HIV/AIDS in South Africa.
Salih Booker said today, "South Africa is ground zero of the global AIDS pandemic. The failure of the government to provide stronger leadership has allowed the U.S. and other rich countries to evade their responsibilities to address this human catastrophe. The lives of all of these people are valuable and the deserve treatment and care. This is an obligation of the South African government, and indeed what the liberation movement fought for."
Africa Action is a co-sponsor of today's protest in Washington, DC. Other sponsors include: ACT UP New York and Philadelphia, Health GAP, African Services Committee and Student Global AIDS Campaign.
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Africa's Right to Health Campaign Fact Sheet
The Color of AIDS: Racism and AIDS in the U.S. and Africa
April 2003
[full formatted version, with graphics, available at http://www.africaaction.org/action/colorofaids2003.pdf]
"While AIDS is a global threat that does not differentiate by race or class, and is not confined by borders, it is mainly killing Black people." - Salih Booker, Africa Action
"More and more, the face of HIV/AIDS is black. If we don't fight back, we'll lose a generation." - Phill Wilson, The Black AIDS Institute
HIV/AIDS is a deadly global threat, and no one is immune. But some people are more vulnerable than others. At home and abroad, AIDS takes its most devastating toll in poor communities, where people lack access to adequate health care.
Black people are the most affected by the HIV/AIDS crisis. Africa is "ground zero" of the global pandemic, home to almost three-quarters of those living with HIV/AIDS worldwide. The region with the next highest infection rates is the Caribbean. Here in the U.S., HIV infection rates are rising rapidly in communities of color, especially among young people.
HIV/AIDS has become the new "Black Plague". Because most of those dying are poor and Black, the response of policy-makers to the spread of HIV/AIDS has been slow and inadequate. U.S. domestic and foreign policies must give greater priority to defeating HIV/AIDS where it is most urgent in Black communities here, in the Caribbean, and throughout the African continent.
AIDS in Africa
* Africa is home to almost 30 million people living with HIV/AIDS out of 42 million worldwide.
* More than 70% of the AIDS-related deaths to date (as of 2001) have been in Africa.
* Africa is home to more than 12 million AIDS orphans.
AIDS in the U.S.
* African-Americans represent just under 13% of the U.S. population, but almost 38% of HIV/AIDS cases.
* More than half of all new HIV infections are among Blacks.
* AIDS-related illnesses are the leading cause of death for African-American men and women aged 25-44.
Why is the Face of AIDS Black?
In the U.S.
* HIV treatments have reduced AIDS deaths, but treatment and care is often not available to Black people.
* The U.S. government has not provided adequate funding to meet the growing needs of Black communities for the AIDS Drug Assistance Programs (ADAPs) and the Minority AIDS Initiative.
* As a result, HIV infection rates continue to rise in Black communities across the U.S.
In Africa
* Only 1% of people living with HIV/AIDS have access to life-prolonging treatment.
* The Global Fund to Fight AIDS is the greatest hope for defeating AIDS in Africa, but the U.S. refuses to contribute its fair share.
* As a result, nearly 3 million Africans will die of AIDS this year without treatment.
Racism and apathy cost millions of Black lives every year.
The fight against Racism and AIDS will only be successful when Black people around the world come together to defeat this deadly threat to our common humanity.
Take Action! If You Don't, Who Will?
EDUCATE!
Plan an event with your church, on campus or in your community to raise awareness about about HIV/AIDS in Africa. Africa Action can provide speakers and other educational resources.
ORGANIZE!
Join the Africa's Right to Health Campaign! Contact Africa Action tolearn about a local coalition in your area.
MOBILIZE!
Plan a call-in or e-mail day to pressure the White House to support greater funding for the AIDS Drug Assistance Program and the Global AIDS Fund: White House Comment Line: 202.465.1111. President Bush's e-mail address: president@whitehouse.gov
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Africa's Right to Health Campaign Fact Sheet
Africa's Debt Fueling the fire of AIDS
April 2003
[full formatted version, with graphics, available at http://www.africaaction.org/action/debt2003.pdf]
"Every child in Africa is born with a financial burden which a lifetime's work cannot repay. This debt is a new form of slavery, as vicious as the slave trade." All-Africa Conference of Churches
Africa is the world's poorest region, and most of its people live on less than $1 a day... but African countries owe $300 billion in foreign debt. This is a huge financial burden on the people of Africa. While African countries struggle to cope with the HIV/AIDS crisis and with extreme poverty, they must spend millions more on debt repayments than on their own urgent priorities.
Africa's debts are owed to rich country governments like the U.S. and Britain, and to international financial institutions, like the World Bank and International Monetary Fund (IMF), which are controlled by these governments. Each year, the poorest countries in Africa are forced to pay more money to these wealthy creditors than they receive in aid or in new loans. This debt gives these foreign creditors great power over Africa's economies and over the continent's future.
Debt is the greatest economic obstacle to African efforts to combat the HIV/AIDS crisis. Debt repayments rob $15 billion from the continent every year. This money could be used to provide health care to millions of people and to fund the war on HIV/AIDS. But it is instead being taken away by foreign governments and institutions. Africa's debts must be canceled to allow Africa's people to control their own resources and direct them towards their real priorities combating poverty and the HIV/AIDS crisis.
Africa's Debt Toll The human cost of debt
HEALTH. Most African countries are forced to spend more money each year on debt repayments than on health care for their people. $10 billion per year could turn the tide of the HIV/AIDS crisis in Africa. But African governments are still paying $15 billion per year to rich country creditors. Nearly 3 million Africans will die of AIDS-related illnesses this year, and 500,000 African children will die of malaria, while rich countries get richer at Africa's expense.
EDUCATION. Many African countries have had to cut spending on education in order to repay foreign debts. In 2002, 10 African governments spent more on debt repayments than on health care and primary education combined. Meanwhile, 42 million school-age children in Africa are not enrolled in school. If Africa's debts were canceled, spending on education could be doubled.
Africa's Debts are Illegitimate
* Many loans being repaid by African countries were made to Cold War era dictators whom Africa's people did not choose and who used the money to repress them. Example: In South Africa, the apartheid regime took out more than $18 billion in foreign debt in its final 15 years in power. The victims of the apartheid regime should not now be forced to pay for their previous repression.
* Many loans being repaid by African countries were made to corrupt leaders who kept this money for themselves and added it to their own personal wealth. Example: In the Democratic Republic of the Congo (DRC), formerly Zaire, dictator Mobutu Sese-Seko received more U.S. aid than the rest of Sub-Saharan Africa combined during much of the Cold War, even though it was known that this money was being diverted into his Swiss bank accounts. The people of the DRC should not now have to pick up the tab for loans from which they saw no benefit.
* African countries' debts have swelled massively over time as a result of skyrocketing interest rates and harmful economic policies forced on these countries by creditors. Example: Nigeria originally borrowed $5 billion from foreign governments and institutions. It has paid back $16 billion, but its debt still stands at $32 billion.
* African countries do not owe the U.S. and European countries these countries owe Africa for the wealth and resources they have stolen from the continent over centuries. Who really owes whom?
Cancel Africa's debt NOW!
Africa's debts are illegitimate and they should be canceled. Debt cancellation is a matter of justice. It is also a matter of common sense. African efforts to defeat HIV/AIDS cannot succeed until the outward flow of money to foreign creditors is stopped. Debt cancellation can make a real difference to people's lives: In Mozambique, Senegal and Mali, debt relief has provided resources to fight HIV/AIDS and to improve health care.
The current debt relief plan of the World Bank and IMF, the Heavily Indebted Poor Countries (HIPC) Initiative, has failed to resolve Africa's debt crisis. It has given some limited debt relief to some African countries, but most are still paying billions of dollars in debt repayments each year.
What is needed is outright debt cancellation. The World Bank and IMF, the main creditors of Africa's debt, can afford to write off these debts. But they refuse to do so because they want to retain control over Africa's economies. The U.S. is the leading voice and most powerful shareholder in the World Bank and IMF. It should use its power to achieve debt cancellation for Africa NOW.
Take Action! If You Don't, Who Will?
EDUCATE!
Plan an event with your church, on campus or in your community to raise awareness about Africa's debt crisis and how it undermines the fight against HIV/AIDS. Africa Action can provide speakers and other educational resources.
ORGANIZE!
Join the Africa's Right to Health Campaign! Contact Africa Action to learn about a local coalition in your area.
MOBILIZE!
Stop one of the major institutions blocking debt cancellation for Africa by Boycotting the World Bank! Contact Africa Action to learn how to start a planning committee to urge your church, university or city council to take a stand for debt cancellation in support of Africa's Right to Health!
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Date distributed (ymd): 030430 Region: Continent-Wide Issue Areas: +economy/development+ +health+ +US Policy Focus+
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AFRICA ACTION Africa Policy E-Journal April 30, 2003 (030430)
Africa: Treatment Access Updates (Reposted from sources cited below)
This posting contains several updates on developments related to access to AIDS treatment: (1) a notice from the Treatment Action Campaign on the temporary suspension of their civil disobedience campaign pending a new meeting with the South African government, (2) two short press releases from the National Association of People Living with HIV/AIDS (NAPWA) in South Africa against the Pharmaceutical Manufacturing Assocation (PMA), and (3) an analysis from Brook Baker of Healthgap of the recent move by GlaxoSmithKline lowering the cost of its antiretroviral drugs.
Another posting today contains new press releases and other material from Africa Action related to the Africa's Right to Health Campaign.
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Treatment Action Campaign http://www.tac.org.za
TAC NEC RESOLUTION
29 April 2003
At a meeting on April 25th 2003 with Deputy President and SANAC Chairperson, Jacob Zuma, TAC was asked to consider suspending its civil disobedience (Dying for Treatment) campaign, pending a full day meeting with SANAC on Saturday May 17th 2003 and its outcomes.
At a meeting of the TAC NEC, and several key allies, on April 29th 2003 it was agreed that the campaign would be suspended. This was despite reservations expressed by several NEC and staff members who stressed the urgency of changing government policy on ARV treatment and the NEDLAC draft agreement. TAC NEC members also reiterated concerns about whether SANAC has the power to act to save lives.
However we are suspending the campaign in the interest of ensuring the fullest opportunity for government to prove its good faith and to demonstrate that TAC's campaign is about saving lives. The decision will be explained and defended at TAC branch meetings.
TAC will decide on whether to resume this campaign depending on the outcomes of the SANAC meeting and the process of preparation for it. Our next NEC will take place on May 18th 2003.
It was noted that it was agreed with the Deputy President that:
1. On the agenda of the SANAC meeting will be (not necessarily in this order):
* An ARV treatment programme for the SA public sector and the report of the Costing Committee; * The Nedlac Framework Agreement: how it was arrived at and how it will be finalised; * TAC's relationship with government and SANAC: questions SANAC may have about TAC's structure, finances, decision on civil disobedience etc.
2. To prepare for this meeting a joint committee of SANAC and TAC will be set up to work on the agenda as well as necessary supporting documentation. TAC proposes that any disputes in this committee be referred to the SANAC chairperson with clear recommendations.
TAC proposes that where relevant, the outcomes of the May 17th meeting be immediately and formally tabled with government as urgent recommendations from SANAC with a request that they be considered and confirmed within three weeks of the SANAC meeting. The outcomes must include using the legal powers of government to reduce the prices of medicines.
The TAC NEC reiterates its desire to work constructively with government and all other sectors of society in HIV prevention and treatment. However, should we encounter further unjustifiable delays or deceit, we will continue with all existing campaigns to get agreement on a national plan that saves lives by preventing HIV infection and treating people with AIDS.
Proposed by Mark Heywood, TAC National Secretary Seconded by Zackie Achmat, TAC Chairperson Agreed unanimously by TAC NEC members and staff present on teleconference: Theo Steele, Luyanda Ngonyama, Arthur Jokweni, Ivy Ntlangeni, Cati Vawda, Sindiswa Godwana, Ncumisa Nongo, Sharon Ekambaram, Nathan Geffen, Mandla Majola, Sipho Mthathi, Nonkosi Khumalo, Pholokgolo Ramothwala, Desmond Mpofu, Thembeka Majali, Rukia Cornelius
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National Association of People Living with HIV/AIDS P. O. Box 66 Germiston 1400 Tel : +27(011) 872 0975 Fax : +27(011) 872 1343 napnat@sn.apc.org http://www.napwa.org.za
Organise, Mobilise and Empower P.W.A. S
29 April 2003
Media alert
15 NAPWA members arrested
15 members of the National Association of People Living with HIV/AIDS (NAPWA) who have been protesting peacefully today outside the offices of Pharmaceutical Manufacturing Association (PMA) as part of its unfolding programme to pressurize Pharmaceutical Companies in providing Antiretroviral Drugs free of charge to people Living with HIV/AIDS (PWA s) have been arrested in Midrand Police Station.
For more information contact: Sechaba Ranthako 072 291 3913
21 April 2003
NAPWA is continuing with her Black Easter Campaign
Up to date - We have 50 members who have joined and are part of the campaign. These members are coming from 5 Provinces i.e North West, Mpumalanga, Free State, Limpompo and Gauteng. NAPWA members have vowed not to leave PMA premises until their demands are positively addressed.
They are hoping to make their impact to be felt more on Tuesday, 22 April 2003, when NAPWA will forcefully enter the PMA premises. If PMA does not respond positively to our demands NAPWA will intensify her struggle and put pressure on the Pharmaceutical Companies by involving our communities in consumer boycotts and forcefully entering all the premises of Pharmaceutical Companies.
NAPWA is in these exercises and/or struggle because she believes that Pharmaceutical Companies are the ones that need to provide treatment to people who need it (treatment). NAPWA says Pharmaceuticals have made enough profit and the moral thing they can do is to Provide treatment free of charge to poor PWA's .The notion that it is the duty of the government only to provide treatment is misplaced and uncalled for, government has a responsibility to provide nutrition to root out poverty while building health care infrastructure.
We see Pharmaceutical Companies as the main institution that can save our world from HIV/AIDS by donating and subsidizing treatment for the benefit of the poor. Their obsession with profit making make them to be regarded as murderers of the highest order in our lifetime. NAPWA has vowed to stay in PMA offices at Midrand until their demands are met. The struggle for treatment continues.
PWA rights are human rights. For more information please contact Thanduxolo Doro NAPWA Deputy Director and Spokesperson +27 11 (0)83 489 3912
Or Nkululeko Nxesi NAPWA National Director +27 11 (0)83 478 9462 mailto:napwadir@sn.apc.org napwadir@sn.apc.org reposted from Aids-Africa, a forum for communication and information on AIDS related issues in Africa
<http://www.yahoogroups.com/group/aids-africa>
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The Real Politics of GSK's Price Cut
Brook K. Baker, Health GAP (http://www.healthgap.org)
April 28, 2003
[Note: The GlaxoSmithKline press release of April 28 is available at http://www.gsk.com/media/pressreleases.htm Brief excerpts from the release:
"GlaxoSmithKline(GSK) today announced that it has further reduced the not-for-profit prices of its HIV/AIDS medicines for the world's poorest countries by up to 47%. The latest reduction lowers the not-for-profit price of Combivir - the backbone of WHO-recommended HIV/AIDS treatment regimens - to 90 cents per day. ...
GSK's single, not-for-profit prices are available to a wide range of customers in the Least Developed Countries and all of sub-Saharan Africa - a total of 63 countries. Eligible customer groups include governments, Non-governmental organisations (NGOs), aid agencies, UN agencies and international purchase funds like the Global Fund to Fight AIDS, TB and Malaria. In recognition of the gravity of the HIV/AIDS situation in sub-Saharan Africa, employers who offer HIV/AIDS care and treatment to uninsured staff are also eligible for GSK's not-for-profit prices for antiretrovirals. ...
GSK is the leading supplier of HIV/AIDS medicines, providing almost twice as many antiretrovirals as the second largest supplier.]
Nobody should scoff at the importance of lower HIV/AIDS drug costs, least of all those who have fought so hard, for so long, for them to happen. Nonetheless, treatment activists always have a healthy dose of skepticism when price reductions are trumpeted to the worldwide press. They usually signal either a grudging capitulation to an activist campaign, a strategic response to generic competition, or a preemptive response to a legal threat. All three factors seem to be playing a role in GlaxoSmithKline's most recent announcement.
Glaxo is the main producer of HIV/AIDS antiretroviral drugs and thus has been a principle target of activist campaigns for many years. Because it faces so little real competition, Glaxo has been among the slowest in reducing its prices for AIDS medicines in developing countries. This has resulted in ACT UP and other activist demonstrations at corporate headquarters, in letter writing campaigns, in shareholder resolutions, and a ton of bad press. Thus, it comes as no surprise that Glaxo would continue to make price concessions in an effort to relieve some of the activist pressure.
Glaxo is also facing serious competitive threat from generic producers who have continued to undercut its previous price discounts, who have received prequalification from WHO with respect to the quality of their products, and who have begun to respond to the subsidized purchasing power represented by the Global Fund, the World Bank, and other donor sources. As a result, for the first time, generic producers are beginning to see some larger purchase orders and can begin to see the emergence of a sustainable and robust market for a large-volume of AIDS medicines. At present, India's Ranbaxy is the cheapest prequalified generic supplier at $270 per year, but Hetero of India sources at $201 per year and prices will continue to go down as efficiencies and economies of scale increase. Doctors Without Borders has predicted prices well below $100 per year once full-scale production begins.
These competitive features are important because the Global Fund has already committed to lowest cost sourcing consistent with national and international patent schemes. Thus, where no patents are on file (in many of the smallest and poorest African countries) and/or where compulsory licenses have been issued for imported medicines, countries must preferentially source the cheaper generic medicines in order to be eligible for Global Fund money to purchase ARVs and drugs for opportunistic infections. In this regard, Glaxo can be seen as having tried to match the generic pricing levels set by Cipla, Ranbaxy, Aurobino, and Hetero in order to remain in the running for purchases subsidized by the Global Fund.
However, Glaxo also engages in price competition in order to deter scale-up of generic capacity. By matching generic price reductions, Glaxo forces generic producers will think twice about expanding their capacity. After all, Glaxo is signalling its willingness to dump medicines at bargain basement prices in order to preempt the emergence of a truly competitive generic industry. Moreover, Glaxo and other drugs companies are trying to tie up the most lucrative developing country markets by negotiating directly with some of the biggest purchasers, like the U.S. government for Bush's unilateral AIDS initiative (do we think George Bush's $300 came out of thin air), like the South Africa and Botswana's governments, and like Anglo American.
Finally, Glaxo has faced some unprecedented legal threats. Like other drug companies, it has faced damaging patent challenges while the industry as a whole has been rocked by price fixing charges, deceptive patent-listing charges and the like. In addition, Glaxo has had its pricing for AIDS medicines directly challenged in a case brought by the AIDS Healthcare Foundation. Most importantly, however, Glaxo has had its "discount" pricing scheme challenged in South Africa in a case brought by the Treatment Action Campaign before the Competition Commission. The Competition Commission is empowered to investigate TAC's claim of excessive pricing by checking the company books and seeking detailed information about costs of production. Moreover, the Commission might well be authorized to issue a compulsory license or impose punitive damages totalling 10% of Glaxo's entire annual turnover of drug sales in South Africa. An interesting side feature of a compulsory license issued directly by the Competition Commission or subsequently by the Patent Department would be that it would not be subject to the "primarily for domestic use" rule found in TRIPS. In other words, South Africa could issue an "anti-competition" compulsory license authorizing exports to all of sub-Saharan Africa. There is strong reason to believe that Glaxo might be seeking to avoid an abuse of patent or excessive pricing finding by making its most recent price concession.
Whatever the true calculation of factors influencing Glaxo's decision, economies of scale are likely to be trivial. Glaxo has bragged that it has increased its sale of Combivar from 2.2 million pills in 2001 to nearly 6 million in 2002. I guess its better to count pills than patients, because when you divide these numbers by 730 (2 pills a day times 365 days in a year), you see that Glaxo is now treating providing preferentially priced Combivar to only 8219 patients in developing countries. Given that nearly 500,000 patients in the U.S. and Europe are receiving ARVs, many of them Combivar, it's hard to see how there are new found economies of scale in Glaxo plants. (In this regard, Glaxo's sales of ARVs in all developing countries is only .2% of its annual gross sales and probably less 2% of its total AIDS drug sales.) What may be true however, is that the costs of base ingredients are falling as a growing number of patients in developing countries are finally accessing both patented and generic products.
An interesting feature of Glaxo's new found economies of scale and manufacturing efficiencies is that it is presumably now making even more money on its sales in the U.S. and E.U. Since it sells Combivar at $9.00 a pill in those two markets, presumably it could now knock a dollar off the price without affecting its exorbitant profit!
A last factor to note about Glaxo's price offer is that it is still significantly restricted, at least with respect to the private sector purchases and with respect to the number of developing countries included. Thankfully, Glaxo does commit to discount pricing for 63 countries (all of sub-Saharan Africa and approximately 10 other least developed countries) but this list leaves out a lot of developing countries with a high disease burden. Likewise, although the offer includes governments, NGOs, aid agencies, UN agencies, and the Global Fund, it does not include the entire private sector. Instead, the private sector offer is limited to employers who offer HIV/AIDS treatment to "uninsured staff." Although this distinction is not a huge issue in many of the poorest countries, there is an elite in developing countries, including a significant private sector in South Africa that does provide ARV coverage through medical aid schemes. For the tiered pricing to be most effective, it does not make sense to disrupt participation in the private health sector by maintaining huge price disparities between private and public sector drugs.
In the long run, the best way to evaluate the Glaxo pricing discount is to assess its impact on finding a sustainable solution to an ongoing and accelerating problem. Based on this kind of evaluation, Glaxo's offer will be counterproductive in the long run if it prevents the development of a robust generic industry that achieves cost-efficient economies of scale and that has some internal competition to drive prices down. In the short run, the discounted drugs are registered, they utilize an existing distribution system, and they are now significantly cheaper. However, the most viable long term solution is one that energizes highly efficient production in India and elsewhere, not one that maintain the super-monopoly status of the patent industry.
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Date distributed (ymd): 030430 Region: Continent-Wide Issue Areas: +economy/development+ +health+
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Message-Id: <200304301848.h3UImZr16969@marduk.africapolicy.org> From: "Africa Action" <e-journal@africaaction.org> Date: Wed, 30 Apr 2003 14:48:06 -0500 Subject: Africa Action: Action Updates
Editor: Ali B. Ali-Dinar
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