Robbing the Poor to Pay the Rich?

Briefing paper

By: Anonymous

Date: November 2003

Source: "Robbing the Poor to Pay the Rich?" Oxfam G.B. December 2003. <http://www.oxfam.org.uk/what_we_do/issues/health/bp56_medicines.htm> (accessed May 31, 2006).

About the Author: This briefing was written by staff members of Oxfam G.B., a British charitable organization affiliated with Oxfam International. Oxfam is a worldwide strategic partnership that works with other organizations to find solutions to poverty and suffering. Some of Oxfam's allies are the European Commission, ECHO, Department of International Development, and The United Nations.

INTRODUCTION

According to the Biotechnology Industry Organization (BIO), as of 2006 there are more than three hundred drugs and vaccines in clinical trials for more than two hundred diseases (including AIDS, arthritis, and Alzheimer's Disease). In 2003 there were 1,473 biotechnology companies in the United States (314 were public companies). Revenues from this industry have grown from $8 billion in 1992 to $39 billion in 2003. In 2003 nearly $17.9 billion was spent on research and development. The Biotechnology industry is regulated by the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and Department of Agriculture (USDA).

BIO is clear with regard to ethical issues: "Biotechnology has extraordinary potential to improve the health and well-being of people in the developing world, but significant impediments exist to the development and dissemination of diagnostics, therapeutics, and vaccines for the infectious diseases prevalent in developing countries …BIO and the biotechnology industry respect the power of the technology we are developing, and we accept the need for appropriate regulation. We work with state, federal and international regulatory bodies to shape the development of regulatory policies that foster safe, effective and beneficial products."

Pharmaceutical Research and Manufacturers of America (PhRMA) is one of the largest and most influential lobbying organizations in Washington. PhRMA represents forty-eight pharmaceutical companies and employs over 1,200 lobbyists to advocate policies that advance its interests. PhRMA's mission is "winning advocacy for public policies that encourage the discovery of life-saving and life-enhancing new medicines for patients by pharmaceuticals/biotechnology research companies." Despite these lofty proclamations, the pharmaceuticals/biotech industry has come under intense scrutiny. The numbers reveal some startling truths: despite claims of putting the interests of public health and well-being before profit, big PhRMA has used its clout and connections to reap bigger profits in the U.S. and abroad.

Consumer advocacy groups and human rights organizations alike (Public Citizen, the Center for Responsive Politics, and Oxfam International) describe some alarming trends. In 2001 the government inflation rate was only 1.6 percent while prescription drug prices increased by ten percent. In the same year, the pharmaceutical industry led all of Fortune magazine's measures of profitability. In addition, while profits of Fortune 500 companies dropped fifty-three percent, profits of top U.S. drug companies jumped from $28 billion to $37 billion (a thirty-three percent increase). These companies also spent 12.5 percent of revenues on research and development while keeping 18.5 percent for profit. In the past decades, the industry has experienced increased profitability—two times more than the median for all industries in the Fortune 500 in the 1970s, four times more in the 1990s, and, in 2001, eight times more than all industries in the Fortune 500.

Increasing profits are only part of the picture. Drug companies and their representatives contributed at least $29 million to federal candidates in 2002. The pharmaceutical industry ranked tenth in total campaign contributions compared to more than eighty other industries. During the election-year campaigns of 2002, pharmaceutical companies donated $21 million to Republican candidates and causes, $7 million to Democrats, and $19 million in soft money contributions.

Drug companies also invest millions in lobbying. It has been so successful that it won coverage for prescription drugs through Medicare and blocked imports of cheaper drugs from foreign counterparts, including Canada. More importantly, U.S. drug companies have learned to circumvent international policies that were designed to give developing countries access to affordable drugs. These companies have alliances and partnerships that lend the industry the power to influence national and international policy.

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SIGNIFICANCE

The pharmaceutical/biotech industry asserts that it wants to take part in the global fight against disease but must also protect small businesses and start-ups that need to recoup investments years in development. They argue that the only asset these small fragile companies have is their intellectual property (IP), and that IP needs safeguards from piracy and imitation to ensure industry survival.

"Access for All" was the unifying theme for the XV International IDS Conference in Thailand in 2004. Brazil's National AIDS Program (NAP) was held up as the standard of a successful national HIV/AIDS program. Central to Brazil's success was lobbying by human rights advocates—voicing that access to affordable medicine and healthcare is a human right. Studies of the NAP demonstrate how "free universal access to antiretroviral treatment has had a dramatic impact on morbidity and mortality from AIDS in Brazil and has gained considerable international recognition for its efforts." Also, the World Health Organization 3 by 5 initiative, to treat three million people with HIV/ AIDS by the end of 2005, is part of the global campaign to provide better access to drug therapy in developing countries.

As of May 2006 there are more than two million children less than fifteen years of age infected with HIV (most in sub-Saharan Africa). Of these, less than five percent have access to pediatric AIDS treatment. In addition, fourteen million people die every year in developing nations of preventable diseases such as TB and malaria. These people and their countries need affordable drugs—often generic derivatives—to combat disease along with strengthened healthcare systems. The U.S. pharmaceutical industry is in a position to help in the global fight against one of the worst public health threats in recent decades.

FURTHER RESOURCES

Books

UNAIDS. AIDS Epidemic Update—December, 2005. Geneva, Switzerland: UNAIDS, 2005.

World Health Organization. Treating 3 Million by 2005: Making it Happen. Geneva, Switzerland: World Health Organization, 2003.

Periodicals

de Carvalho Mesquita Ayres, J.R., et al. "Vulnerability, Human Rights, and Comprehensive Health Care Needs of Young People Living With HIV/AIDS." American Journal of Public Health 96 (2006): 1001–1006.

Desvarieux, M., et al. "Antiretroviral Therapy in Resource-Poor Countries: Illusions and Realities." American Journal of Public Health 95 (2005): 1117–1122.

Galvão, J. "Brazil and Access to HIV/AIDS Drugs: A Question of Human Rights and Public Health." American Journal of Public Health 95 (2005): 1110–1116.

McCoy, D., et al. "Expanding Access to Antiretroviral Therapy in Sub-Saharan Africa: Avoiding the Pitfalls and Dangers, Capitalizing on the Opportunities." American Journal of Public Health 95 (2005): 18–22.

Web sites

Biotechnology Industry Organization. "Biotechnology Industry Facts." <http://www.bio.org/speeches/pubs/er/statistics.asp?p=yes> (accessed May 31, 2006).

Center for Responsive Politics. "Background: Pharmaceuticals/ Health Products." April 2006. <http://www.opensecrets.org/industries/ background.asp?Ind=H04> (accessed May 31, 2006).