Killing Africa with Kindness

By Russell Mokhiber <russell@essential.org> and Robert Weissman <rob@essential.org>, 1 August 2000

With the announcement of a billion-dollar-a-year U.S. government loan program for African countries to buy AIDS drugs, the fight to deliver affordable drugs to people with HIV/AIDS in Africa and elsewhere in the developing world has entered its third phase.

If the drug companies’ current kill-them-with-kindness scheme fails, many of the more than 20 million people with HIV/AIDS in Africa may finally receive access to the treatments that could save their lives.

In phase one of the dispute (Deny, Deny, Deny), the world’s leading drug companies, through their pricing policies, simply refused treatment to people with HIV/AIDS in Africa. With per capita incomes in many developing countries at less than a dollar a day, people with HIV/AIDS were simply unable to pay the $12,000 a year or so required for the AIDS drugs cocktails that enable many or most people with HIV/AIDS in the United States to survive. If any developing country made noises about finding ways to provide the drugs more cheaply, the U.S. government—operating at the behest of the big drug makers — threatened trade sanctions and forced them to back down.

In phase two (Who Me?), the U.S. government resigned from its bullying role. AIDS activists forced the Clinton administration to reformulate its policy, culminating in an announcement that the U.S. government would not challenge African countries’ efforts to make generic AIDS drugs available to their people, so long as the countries complied with World Trade Organization rules.

Now, in phase three, the industry and the Clinton administration are conspiring to kill Africans with kindness.

Through the United Nations, the industry has offered to provide discounted AIDS drugs to Africa—but at prices that remain wildly inflated over the cost of production, and far too high to be affordable by most Africans. Although no one seems to know exactly what those rates will be, many published reports suggest discounts will be in the 80 percent range. Such price levels almost surely will enable the pharmaceutical companies to continue to profiteer from drug sales.

Then, last month—in a move immediately denounced by a wide range of organizations working on drug access and debt issues, including Doctors Without Borders, Oxfam and the Health GAP coalition — the U.S. Export-Import Bank, a government agency, announced it would loan a billion dollars annually to African countries for the purchase of HIV/AIDS drugs.

The high-interest Ex-Im loans would pile new debt obligations on African nations at a time when existing debt burdens are undermining the countries’ ability to prevent and treat HIV/AIDS, and when the AIDS epidemic is itself already undermining their economic capacity to make interest payments on foreign loans.

The African countries’ pain will be the drug manufacturers’ gain. The Ex-Im loans are be used to buy drugs made by U.S. companies, apparently at the highly profitable discount level provided to the UN.

Organizations like Doctors Without Borders believe that efficient procurement of generic drugs could drop the cost of HIV/AIDS medicines an additional 90 percent from the estimated drug industry discounts. That would put the cost of combination HIV/AIDS drug therapies at approximately $200 per person per year.

The most insidious aspect of the Ex-Im proposal is how it will work to preempt efforts by African and other developing nations to lower costs through purchases of generic versions of AIDS drugs

As the New York Times reported, It seems unlikely that Brazil, India or other nations that produce such drugs for home consumption would have the export financing available to help African nations buy the goods. The American loans, along with a recent commitment by the World Bank to provide at least $500 million to help African nations set up anti-AIDS initiatives, give added incentive to African nations to treat many of their AIDS cases with Western medicine. (Western medicine means expensive, brand- name drugs, as opposed to lower-cost generics.)

But the momentum for African countries to buy generic versions of the drugs, or to acquire the technology to make their own generics, may be too great for the industry’s killer-kindness ploy to succeed.

Already, South Africa and Namibia have reportedly indicated their refusal to accept the Ex-Im loans, a welcome sign that African nations may be ready to take serious measures—irrespective of the drug industry’s or the U.S. government’s desires—to provide treatment to the horrifyingly large population with HIV/AIDS.