Estimates vary but about half of all state health spending in sub-Saharan Africa goes on drugs, so pricing has a massive impact on the ability of health services to save and protect lives. Associate Editor Neil Ford reports.
According to Kenya’s State Bureau of Statistics, the country spent $450m on importing drugs last year. Unlike in many other industries, the cost of actually manufacturing a drug is generally very low: it is the R&D that is expensive. Manufacturers obviously need to cover their costs and make a profit on their activities.
The big dispute is how they recoup these costs in different markets. Patents are granted in each country that give the developer of a drug exclusive rights to make and sell it for a set period in order to recoup their outlay. New patents can be awarded if further substantive research is undertaken and the drug’s efficacy improved. Once the patent elapses, competition is introduced and prices nosedive. It is therefore in the developer’s financial interests to maintain their patents as long as they can, even if this costs the lives of patients because high prices put drugs out of the reach of many people.
The World Trade Organisation currently gives pharmaceutical patent protection for 20 years. In some instances, pharmaceutical companies resubmit patents even though they have not improved the drug in question, but regulators lack the capacity or the ability to check the research in question and the patent is passed unchallenged.
Such a practice keeps many lifesaving medicines out of the hands of people whose lives could be saved by accessing them. The conflict between the two sides has led to several notable campaigns and legal challenges, including over access to ARVs to combat HIV-AIDS.
The pharmaceutical industry has a fairly poor reputation, both for suppressing the results of some clinical trials and also for submitting and defending its patents in Africa beyond the point of common decency.
For instance, a group of multinational pharmaceutical companies tried to sue the South African government of Nelson Mandela for breaking HIV-AIDS patents in its attempts to provide treatment for the millions of people in the country with the illness.
Many companies have sought to improve their public image and some, including GSK, have now licensed ARVs to the Medicines Patent Pool, which allows them to be manufactured at low cost as generics under royalty-free licences. Yet critics argue that such licences apply to too few medications in too few countries.
The number of Africans receiving ARVs, which slow the progression of HIV-AIDS, has increased from just 50,000 in 2003 to more than 6m today through just two mechanisms: the Global Fund and the President’s Emergency Plan for AIDS Relief (PEPFAR).
The latter was introduced by US President George W Bush and has funnelled $48bn into programmes to prevent and treat HIV-AIDS in Africa over the past decade. It has been a massive success by any standards, saving an estimated 5m lives in the process.
One of the biggest breakthroughs was made in 2000, when Cipla began to market a combination of three drug anti-retrovirals at $800 per patient per year, in comparison with a rate of about $12,000 a year in the industrialised world. Many NGOs and foreign governments have funded the purchase of such drugs in specific African countries.