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Ralph Nader > In the Public Interest > Gore: Do the Right Thing

For years, consumer activists have asked Al Gore to reverse the U.S. policy of punishing developing country governments that tried to make essential medicines more affordable for sick people. And Gore ignored the calls.

Matters suddenly changed on June 16 when a small group of AIDS activists began clamoring and demonstrating at events by Vice President and presidential candidate Al Gore.
The activists focused on Gore because he oversees a U.S.-South Africa binational commission. The United States has used the commission meetings and structure to exert enormous pressure on South Africa, urging the country to abandon efforts to promote generic drug competition in AIDS and other essential medicines that are priced out of reach of most consumers. (The United States has similarly imposed or threatened trade sanctions against other countries seeking to take steps to make essential medicines more affordable.)

With the protests prompting some of the major media to wake up and pay attention to this critical issue, Gore and the pharmaceutical industry have issued a series of defenses of the retrograde U.S. position on the pharmaceutical access issue. The underlying question is countries’ rights to employ compulsory licensing and parallel import policies.

Compulsory licensing involves a government giving a manufacturer a license to produce an item for which another company holds a patent or exclusive rights, in exchange for the payment of a reasonable royalty to the patent holder. The effect is to introduce generic competition, and drive prices down.

Parallel imports involve a government or other party shopping on the world market for the lowest priced version of a product, rather than accepting the price at which it is sold in their country. In the pharmaceuticals market, prices tend to vary dramatically between countries.

Gore and the industry’s first defense was that compulsory licensing and parallel imports are bad because they decrease drug companies’ profitability and thereby hurt their research efforts. But Gore, at least, soon abandoned that argument — an especially weak claim given that Africa constitutes on the order of 1 or 2 percent of the global drug market, hardly enough to affect the industry’s R&D expenditures. Now the industry is emphasizing that lower prices for drugs will not be sufficient to solve the global AIDS plague which is now killing more than 2 million a year. This is surely true — poor countries desperately need to emphasize AIDS prevention and education. But for those infected — up to 25 percent of the population in some African countries — access to affordable drugs is vital. Without access, virtually all people with AIDS are sentenced to die.

The industry trade association, PhRMA, is also trotting out the line that making drugs affordable to poor people may create drug-resistant strains of the AIDS virus. The concern is that poor health care systems will prevent proper administration of the drug treatments, and mutant strains will develop that are not susceptible to pharmacological treatments.

But as Dr. Peter Lurie of Public Citizen points out, virtually everyone now who goes without drugs will die — drug-resistant strains, which are no more aggressive than non- resistant ones, can’t make things worse for them. “If the problem is lack of infrastructure, the solution should be improving infrastructure, not denying poor people life-saving medicines,” says Lurie. “One would never withhold effective therapy for tuberculosis or malaria for fear of inducing drug resistance. Why should AIDS be any different?”

Moreover — some kinds of treatments, for particular AIDS-related infections, or short-course treatment to prevent mother-to-child HIV transmission, are easier to administer — and could save many lives and ease considerable preventable suffering.

In late June, with pressure building, Gore told the Congressional Black Caucus that he supported South Africa’s right to use the controversial policies of compulsory licensing and parallel imports. But, he said, in employing these policies, South Africa must comply with the international trade rules established by the World Trade Organization (WTO).

That was a disturbing caveat, which leaves unclear the real meaning of Gore’s statement. At times, the United States has argued that compulsory licensing and parallel imports are not permitted by the WTO. No serious and honest trade lawyer believes this to be the case, however. Is Gore still making this claim?

It is true that the WTO sets certain technical conditions for countries to employ compulsory licensing. But South Africa has repeatedly pledged that it will ensure that its compulsory licensing policies comply with WTO rules. Since South Africa has not yet issued a compulsory license, it is hard to know what more the government could do satisfy Gore — if his proclaimed respect for South Africa’s right to use compulsory licensing and parallel imports is genuine.

In the policy world, talk is cheap. One in seven South Africans is HIV positive. Twenty-two million Africans are estimated to be infected with HIV/AIDS; and eight million more are infected in Asia and Latin America.

Yet the U.S. Trade Representative (USTR), Charlene Barshefsky, insists on placing South Africa on the “watch” list for countries supposedly interfering with U.S. trading rights, and is even conducting a special, out-of-cycle review of South Africa. Other countries have received similar treatment for pursuing policies similar to South Africa’s.

If Vice President Gore wants the public to believe his claims of compassion for those with HIV/AIDS in the developing world and his asserted respect for countries’ right to undertake policies to make drugs more affordable and to save lives, then he must see that the abhorrent U.S. policy is changed.