Fighting Back Against Pharmaceutical Company Greed

The high price of drugs is destroying what there is of the dismal U.S. public healthcare system. AIDS Drug Assistance Programs (ADAP) have been crippled nationwide and the formularies of state Medicaid programs are under enormous strain. The pharmaceutical industry protests that they run a risky business and that their prices are fair. There's nothing wrong with drug makers earning a fair and decent profit, nor, certainly, with researchers bringing home good pay for doing good work. But with government subsidies, tax write-offs and the numerous incentives industry receives in the form of corporate welfare, the profit from bringing a drug to market dramatically outweighs the cost.

It appears that industry operates on the model that says, "Greed drives the engine of discovery." While this idea may be partly true, it has many pitfalls -- and millions of human lives tumble into these pits each year. Examples were sharply highlighted at a meeting on neglected diseases sponsored by the humanitarian group, Doctors Without Borders held in New York City, March 14, 2002. There is little or no research occurring on better treatments for malaria or tuberculosis, despite their impact on millions of people. Compound this neglect with the fact that legal controls over certain drugs allow companies such as GlaxoSmithKline to actually block countries from obtaining fairly priced generic medications. If industry invested a fraction of the energy they spend for public relations and legal battles in finding new ways to help people afford treatment, they could be part of a win-win situation, be better positioned to negotiate reasonable tiered pricing strategies, have a vastly improved public image -- and quite frankly, not be guilty of committing what many believe to be a criminal act of enormous proportions -- an economic form of genocide.

The failure to study potentially useful products that have little profit potential stands as a further indictment of a broken system. Once a drug's patents have expired it is almost never clinically evaluated to see if it has therapeutic value for neglected or commercially unimportant diseases. A nearly complete absence of studies on the dietary supplements used by large numbers of people to help manage chronic diseases makes the data vacuum even worse.

How can activists respond in a meaningful way? Many are seeking new ways to inject competition into the equation, which may be the only way to gain genuine leverage against an industry that is out of control. One avenue being sought and strongly supported by activists, physicians and people with HIV/AIDS around the world is the use of certain legal means, recognized as valid by the World Trade Organization. While these are generally thought to apply to developing economies, could they also be invoked by struggling state health programs in the U.S.? Here's a few proposals.

A large pharmaceutical purchaser, say a state Medicaid formulary, could obtain expensive medications through a parallel import program. This would allow the state to buy drugs identical to the expensive domestic versions, but licensed only for distribution in other countries where they are sold for less. This idea drives the industry crazy. Another approach might be for a state to issue a compulsory license permitting local manufacturers of generic drugs to make copies at reasonable prices. Admittedly, these radical solutions might need significant litigation to realize, but perhaps an attorney general from a state at the end of its budgetary rope might be the first one to try.

Still another proposal might be for states to build on the personal use importation exception that permits a person to import a three-month supply of drugs from another country. In the early 1990s, the PWA Health Group buyer's club in New York exploited this rule to import as-yet unapproved drugs to the United States, which were distributed to its members. Nowadays most available AIDS drugs are approved, but there are generic formulations made by companies such as CIPLA in India that could be brought in. Some of these are convenient three-in-one combinations using drugs from multiple manufacturers that could never be produced otherwise. An organization such as a state Medicaid formulary or a separately constituted NGO could serve as a broker to undertake this activity. In the meantime, more and more Americans everyday fall hostage to the greed of Big Pharma. The need for relief is dramatic and growing. Must seniors, the disabled and people with AIDS gather before the gates of corporate headquarters and state legislatures to demand change? Or will the drug industry wise up -- and drop their prices substantially?