Although pharmaceutical companies have lowered the price of many drugs for developing countries, generic equivalents remain cheaper – but may be impossible to import, explains Kevin Watkins

Two-year old Mfane Ncane is lucky to be alive. He was born carrying the HIV/Aids virus and just three months ago was fighting for his life on the children’s ward of the Baragwanath Hospital in Soweto, his immune system on the point of collapse.

Today, he is one of 50 children being treated at the hospital with anti-Aids drugs under a clinical trial. His dramatic recovery is evident in a broad grin, a huge appetite and penchant for chasing other children.

Baragwanath is the world’s largest hospital, catering for a population in excess of three million. One in 10 people and around 40 per cent of pregnant women have HIV, which means that around five children like Mfane are born carrying the virus every day. Yet apart from the 150 patients being treated under the clinical trial, Baragwanath does not treat a single patient with the anti-retroviral viral drugs that have more than halved HIV/Aids death rates in Europe and North America.

The sheer scale of the HIV/Aids epidemic in South Africa defies credibility. This year, it will claim a quarter of a million lives. By 2005, the figure will have doubled. To put this in context, it represents, annually, the loss of life suffered by Britain during the Second World War.

‘What we are dealing with here is something akin to a genocide in terms of its psychological, social and economic effects,’ says Dr Glenda Gray, one of the administrators of the Baragwanath Aids programme.

One hour up the road from her clinic is the Pretoria High Court. Last month, this was the scene of a monumental victory in the ongoing war against Aids and other infectious diseases, not just in Soweto and the rest of Africa, but the developing world.

After three years of attrition, 39 of the world’s most powerful drugs companies – including GlaxoSmithKline, Bayer and Merck – finally bowed to public pressure and agreed to drop their legal challenge to South Africa’s 1997 Medicines Act. Passed by Nelson Mandela, the act authorises the government to waive the patent rights of drugs multinationals and import more affordable medicines.

To understand why this matters you just need to compare the prices of patented drugs with generic equivalents. Over the past few months the pharmaceutical industry has been stung by popular campaigning into a frenzy of price discounting. GlaxoSmithKline is now offering to sell its triple therapy anti-retroviral drugs to governments in Africa at a price of around $1,100 a year. That is less than one-tenth of the US price. But companies in India who make the generic drugs are willing to supply them for $300. In a country such as South Africa that price difference is – quite literally – a life and death issue.

While HIV/Aids drugs have been in the front line of the dispute, the issue goes deeper. For example, the drug ciprofloxacin is one of the most effective anti-infectives used in treating shigella, a virulent form of childhood diarrhoea. In South Africa, Bayer sells it for five times the price of its generic equivalent.

But the drug companies’ climbdown in Pretoria was a victory in an ongoing war being waged by the global pharmaceuticals industry against the world’s poor.

Next month, the Brazilian government is being taken to a World Trade Organisation tribunal by the US following complaints from the Merck corporation. Brazil’s crime: to insist on the right to produce locally at affordable prices drugs that would otherwise be unaffordable to its people. This is a country which, in the space of less than five years, has succeeded in halving its AIDS death rate by producing low cost equivalents of patented drugs.

Meanwhile, there are around a dozen developing countries – including India, Egypt and Argentina – that have been threatened with trade sanctions by the US following complaints from the Pharmaceutical Research and Manufacturers of America, one of the world’s most powerful industrial lobbies.

Ultimately, behind the legal wrangles, the South Africa case was about something more fundamental. It was about whether elected governments have the right to put the human rights of people before the commercial rights of companies. Oxfam has written to the UN Commissioner for Human Rights, Mary Robinson, to ask her to investigate whether the interpretation of patent rights being sought by pharmaceutical firms is consistent with human rights law, or whether, as we believe, it constitutes a gross violation of it.

What may have been learnt by the drugs industry following the monumental PR disaster in South Africa is that few countries and fewer people will accept them putting profits before public health. However, until they start to help poor countries gain access to cheap life-saving medicines, the global campaign against the companies will continue.

Perhaps they need to be reminded of a basic fact – that illness and poverty are linked. And the cost of illness can stretch poor families to breaking point, and the slightest increase in cost is felt acutely. It is a fact that 80 per cent of people in developing countries have to pay for their own medicines, yet prices are determined irrespective of their ability to afford them.

For example, despite desperate need and crippling constraints on Africa’s health budgets, GlaxoSmithKline’s lamivudine, used in the treatment of HIV/Aids, is on average 20 per cent more expensive in Africa than in 10 advanced industrial countries. Although bringing down the cost is not an instant solution to the problem of access to medicines, if the drugs were affordable, and sold in a way that promoted their correct use, much death and disease could be prevented.

And so to the future. What can people in developing countries expect from the drugs industry? Well, in terms of research and development the signs are not good. GlaxoSmithKline’s Tropical Diseases Unit plays an important role in researching and producing vaccines and medicines that are highly relevant to diseases affecting the poor in developing countries. This includes diseases such as malaria, lymphatic filariasis, tuberculosis, leishmaniasis, cholera and leprosy.

But these important initiatives do not compensate for the overall lack of research into diseases of poverty. Of all annual health-related research, only 0.2 per cent is spent on pneumonia, diarrhoea and tuberculosis, three poverty-related ailments that account for 18 per cent of the global disease burden.

This chronic under-resourcing of R&D into tropical diseases is due to the limited market potential offered by the poor countries in which these conditions are most prevalent.

Strong patent protection offered under the WTO international trade rules, which Oxfam is calling to be changed, will not materially increase either the market potential in these disease areas, nor the incentives for R&D. This is because profits, and not patents per se, provide the incentive for R&D. Consequently, Oxfam has been proposing the creation of a global fund for research into diseases of poverty and is encouraged by reports that the UN secretary-general is to outline details of such a fund at next month’s UNAIDs conference in New York.

Like many other charities around the world, Oxfam will not give up the fight to ensure that poor people have access to cheap drugs. The battle will continue to get the WTO to change its trade rules that allow multinational drug companies to bully and dominant poor countries, simply in order to protect their vast profits.

Seems harsh? Not when you are standing in Baragwanath hospital looking at a two-year-old boy who would be dead had he not had access to medicines that are denied not only to millions in his own country, but countless millions beyond.