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The past decade has seen remarkable progress in the fight against AIDS. Effective treatments are either already here or on the horizon, and good prevention practices are well known. Some in the public health community even argue that AIDS should be reclassified as a chronic disease, manageable much like diabetes and hypertension. Such thoughts would have been out of the question even ten years ago.
At the same time, new infections are still increasing globally. This year, 2.5 million people will be infected with HIV and more than 2 million will die of AIDS. As long as weak infrastructure and disastrous political interference plague poor countries, where the disease hits hardest, AIDS will remain stubbornly persistent.
In frustration, many global activists are now demanding that developing countries be allowed to revoke the patents on AIDS medications in order to make those medications more readily available. To be sure, the pharmaceutical industry already funds generous philanthropic programs to make their medicines available in these countries at little or no cost. But the activist community isn’t satisfied, and it wants to impose “compulsory licensing,” a World Trade Organization-sanctioned practice which allows governments to break patents during public health emergencies in order to produce copies of branded drugs.
This may sound like an effective way to get antiretroviral drugs to the world’s poorest people, but it isn’t. In fact, it could have deadly consequences.
It takes more than ten years and at least $800 million to bring a new drug to market. No company could afford that if international patent theft made it impossible to recoup the investment.
The immediate danger would come from the proliferation of low-quality counterfeits. Most local industries in sub-Saharan Africa and Southeast Asia lack the technological and regulatory incentives to produce high-quality copies of pharmaceuticals. When a drug is manufactured in a facility that does not meet international safety standards, there is a very real chance that the drug could contain the wrong dosage of the medication. When an AIDS patient takes the wrong dosage—and the medicine, therefore, isn’t strong enough to kill the disease—the disease can develop resistance to the drug. So exposing HIV/AIDS patients to substandard products only worsens the epidemic and increases costs.
This is exactly what is happening today in Thailand. In 2005, many Thai AIDS patients began suffering and even dying after being treated with an untested antiretroviral cocktail called GPO-vir, which was produced by Thailand’s Government Pharmaceutical Organization. Yet despite this failure, many activists still support compulsory licenses for the Thai government to try to copy other antiretroviral drugs developed and patented by pharmaceutical companies.
Over the long term, patent violations can lead to a decline in the number of new vaccines, since drug companies have no guaranteed return on their investments. It takes more than ten years of research and at least $800 million in testing to bring a new drug to market. No company could afford such a cost if international patent theft made it impossible to recoup the investment. It’s a simple concept: as patent protection wanes, so does economic incentive.
Most activists who support compulsory licensing recognize this reality.
That’s why they want to replace the patent system with prizes for new discoveries and “patent pools” that subsidize investments and projected returns. But how could governments and United Nations AIDS experts possibly determine the optimal value of such a prize? After all, the scope of the AIDS problem isn’t even clear to experts. Late last year, UN officials revised their estimate of 40 million AIDS cases worldwide down to 33 million, a drop of nearly 20 percent.
Neither drug companies nor AIDS patients can afford a slowdown of the market-driven innovation process that has characterized the past quarter century of AIDS research. Market incentives have brought around 90 HIV/AIDS drugs to patients in the past two decades; even more are under development. An artificial market managed by bureaucrats and one-dimensional activists will retard this trend, if not bring it to a complete halt.
Stopping the spread of AIDS in the developing world is no small task. But the solution is not to demonize those private companies trying to find cures or remove their incentive to develop new treatments. Rather, activists, politicians, and business leaders must work together to address the institutional problems—such as dysfunctional health systems and bad or corrupt governance—that have made the AIDS crisis so difficult to combat.
Grace-Marie Turner is president of the Galen Institute, a non-profit research organization focusing on free-market solutions to health reform.
Image by Darren Wamboldt/The Bergman Group.
Breaking patents and harassing drug companies is misguided and dangerous.
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