EVENTS

Date:	Thursday, March 2, 2006
Time:	3:00 PM -- 5:00 PM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

March 2006

International Health Policy Decisions and the Future of HIV Treatment

 

Even though more and more people worldwide are gaining access to AIDS treatment, there has been an apparent decline in the number of companies investing in HIV/AIDS. Could it be that recent policy decisions by the World Trade Organization (WTO) and the Brazilian government are undermining further investment in research and development for HIV/AIDS drugs? The WTO decided to amend the agreement on trade and intellectual property rights so as to ensure that poor countries facing medical emergencies are not denied access to patented medicines. At the same time, the Brazilian government continues to threaten intellectual property rights as part of a negotiating tactic to lower the price at which it buys patented AIDS drugs. While these two actions have been widely praised for helping poor patients with HIV/AIDS, these policies could compromise the future of HIV/AIDS research. At a March 2 AEI panel discussion, participants discussed the important challenges facing the future of HIV/AIDS treatment. 

Roger Bate
AEI

There has been a decline in the number of corporations conducting research in the field of HIV/AIDS, especially in antiretroviral (ARV) treatments and drugs for opportunistic infections. Data provided on this worrying phenomenon is often inadequate as the issue tends to be constantly avoided. Smaller firms tend to be leaving the field along with a few larger firms.  When USAID posed the question to a selection of venture capitalists interested in investing more in the research and development of diseases such as HIV/AIDS, cancer, hypertension, or erectile dysfunction, the clear majority stated that they would stay clear of HIV/AIDS.

Over the past two years, data appears to be stable and represents roughly the same number of companies conducting HIV/AIDS research. However, most of the data for investment is not published and creates uncertainty as to whether investment has increased or decreased over the years. The people within the organizations who conduct most of the research or who are knowledgeable of the statistics choose not to discuss it. It is extremely important for the direction of HIV/AIDS research and development that where and how much money allocated is made known.

Jerry Norris
Hudson Institute

The entire global community is entering a new age in which the issues of chronic disease treatment and management are concerned. HIV/AIDS prevention and treatment cannot be as easily approached as an infectious disease, primarily because it is a progressive chronic disease. This disease is time sensitive not only in increasing drug resistance but also in increasing medical care costs. In December 2003, the World Health Organization announced that it wished to treat 3 million people by the end of 2005. After announcing recently that it has failed to meet this objective, the WHO stated that it aims to provide universal treatment by 2010 to a projected 9 million people. At the end of 2005, reports illustrated that the President’s Emergency Plan for HIV/AIDS Relief provided medical treatment for 265,000 people infected with AIDS, and the United Nations Accelerated Access Initiative, Brazil, South Africa, and Botswana also each covered 427,000, 180,000, 85,000 and 40,000, respectively. These figures add up to a grand total of 997,000 infected people covered by treatment.  However, all of these numbers are independent of anything the WHO can attribute to its intervention. Unofficially, the WHO estimates that roughly 1.1 to 1.5 million infected people are currently covered by treatment, but this number will not be finalized until an official report is issued.

Currently, the World Bank reports that 17 percent of people infected with HIV/AIDS in the United Kingdom are resistant to drug therapies, 11 to 24 percent in the United States, and an observed 6.6 percent in Brazil. Assuming that 1 million people will be drug resistant by 2010, at least 8 of the projected 9 million will require the treatment of first line therapies. This presents an estimated cost of $13.6 billion for only first line therapies and an additional $30.8 billion for drug resistant patients that require second line therapies. Furthermore, these figures do not even account for the cost of third line therapies. 

Such estimates for HIV/AIDS treatment in the year 2010 do not concentrate on the price of an individual drug, but rather focus on the actual overall cost of therapy programs. It is not the price of ARVs that is the main concern. Rather, it is the failure to assign correct values to these post-price effects, which in turn causes policymakers to underestimate the costs that will be associated with chronically ill people. Therefore, it is suggested that groups such as the World Bank and USAID take the initiative to conduct macroeconomic studies on the real costs of treating this chronic disease  in terms of both the price of product and medical care.

Richard Tren
Africa Fighting Malaria

Brazil’s HIV/AIDS treatment and prevention programs should be admired. Utilizing a comprehensive program of care and monitoring patients, the country has been actively targeting high-risk communities, such as intravenous drug users, commercial sex workers, and homosexuals. In 2006, the Brazilian government announced that it aims to reduce the HIV/AIDS prevalence rate to 0.6 percent for men aged seventeen to nineteen and women aged fifteen to twenty-six. It also aims to reduce the prevalence rate in drug users from an estimated 36.5 percent in 2003 to 20 percent, from an estimated 6.1 percent in 2002 to 4.5 percent for commercial sex workers, and from an estimated 14 percent in 2002 to 10 percent for male homosexuals aged twenty to twenty-four. These goals are achievable if Brazil continues to maintain a well-run and sustainable health care program. In addition, the Brazilian National AIDS Program offers free ARV treatment, which assures that drugs are sold at cheaper prices.

In order to secure cheap drugs and drive down the price of HIV/AIDS medication, the Brazilian government has used the controversial tactic of threatening intellectual property rights. In 1996, the Brazilian government introduced a product patent law, declaring that a compulsory license could be issued if a product patented in Brazil was not produced in Brazilian territory within three years of the issuing of that patent. Although the U.S. government argued that this was inconsistent with provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement that guaranteed nondiscrimination and protection of patents, and exclusive rights to patent holders, the case was dropped.
 
In reality, 98 percent of essential medicines promoted by the WHO are not patented. In many cases, companies choose not to patent medicines in poor countries, and for those that do, patent rights are usually not upheld. The argument over the TRIPS Agreement merely drew attention away from the efforts dedicated to freeing up trade and creating more wealth.

The TRIPS Agreement has been amended and along with the DOHA declaration aims to ensure that intellectually property rights do not serve as a barrier against increased access to cheaper medication. This agreement was originally designed to help the poorest countries. Brazil, on the other hand--one of the biggest economies--has been using these flexibilities to drive down the prices on its HIV/AIDS medications. In July 2003, the Brazilian Ministry of Health began proceedings to issue compulsory licenses for three drugs patented by Abbott, Merck, and Roche. In December 2004, the Brazilian government also threatened to break patents with Merck, Abbott, and Gilead, but a resolution was achieved without issuing compulsory licenses. In October 2005, lower drug prices were ultimately achieved. Despite this achievement, there is concern for the negative effect that these methods may have on research and development.

Due to its success, it is often speculated that Brazil’s health care program should be replicated in other countries. Brazil, the tenth largest economy, has a fairly impressive public health system. The life expectancy in is an estimated sixty-nine years. Brazil has 206 physicians per 100,000 people, and per-capita health expenditure in 2002 was an estimated $611. Most importantly, the HIV/AIDS prevalence rate among the civilian population, aged fifteen to forty-nine, is 0.7 percent. However, the life expectancy in Kenya is an estimated forty-five years, thirty-six years in Zambia, and forty-three years in South Africa. Although South Africa has a higher per-capita health expenditure of $689, all other countries in Africa fair less. Furthermore, Nigeria has only twenty-nine physicians per 100,000 inhabitants, and Kenya has only thirteen per 100,000. Regarding the HIV/AIDS prevalence rate, the majority of African nations have a far higher rate than that estimated in Brazil. In South Africa, the HIV/AIDS prevalence rate is an estimated 15.6 percent. When dealing with a poor health infrastructure, such as the case in African nations, to say that other countries must follow a large state-run program is ill-conceived and may lead people to be worse off in the long run.

Ultimately, it is time to stop being obsessed with the price of drugs and focus on patients and how to keep them on long-term treatment within a sustainable program. Furthermore, it must be recognized that profit in health care is good and ultimately helps battle poverty.

Jim Driscoll
National Treatment Advocacy Project

During the 1990s, research in the AIDS epidemic and the development of new drug therapies escalated dramatically for three principal reasons. First of all, with the attention attracted from activism, politics, and the media, AIDS quickly became a glamorous disease. This intrigue and popularity spurred the demand for research. Second, activists--especially those supported by Republicans--served as catalysts in obtaining faster approval by the FDA.  Without this support, drug approval would have been delayed by two to three more years. Third, companies anticipated a profitable market. Due to intellectual property protection in the United States, decreased regulatory barriers and the size, growth, and affluence of the market, drug companies eagerly opted to research and develop new drug therapies. However, the AIDS market has shifted from being a smaller, affluent market to a larger, poor market. Ultimately, this shift has negatively affected the research and development toward HIV/AIDS treatment.

Although better drugs have been developed since those introduced during the 1990s, insufficient attention has been directed toward the many people dying from co-infections. In the case of hepatitis C, adequate drugs have not yet been developed. Even though there are adequate drugs for AIDS treatment, second and third line drugs are very expensive, and administering such treatments also tends to be highly complicated.  

Certain key policies regarding AIDS treatment and prevention must be changed.  Regulatory barriers need to be lowered. There is no need for drugs previously approved by the FDA to be scrutinized by lower-qualified agencies. This not only wastes time, but also contributes to the increasing amount of deaths. The drug market in the developing world must also be expanded. It is absolutely essential that taxes and tariffs on AIDS medications are eliminated. Besides diplomacy and trade issues, moral pressure needs to be placed on wealthier nations. Countries like Brazil and China should spend more of their GDP on health care. This would be a tremendous step for AIDS, as well as other diseases. Adopting such measures would not only expand access to medications, but also increase the rate at which better medications are developed, ultimately benefiting more people. 

AEI intern Jessica LaMoe prepared this summary.