Every day a new headline emerges touting a victory in the global fight against the AIDS epidemic. One day, a pharmaceutical company announces it will deeply discount its drugs for the African market. The next, Yale University and Bristol-Myers Squibb announce they will no longer enforce their patent on an AIDS drug used in HIV-ravaged South Africa. Then 39 companies abruptly withdraw their lawsuit against the South African government over a 1997 law that would make it easier for the country to produce generic versions of patented drugs or import brand-name drugs from other countries to sell at cheaper prices.
All good news, right?
Wrong, says Jamie Love. It's just slick humanitarian-flavored spin.
For Love, one of the leading -- and most outspoken -- activists on the front lines of the AIDS-drug pricing wars, the real issue is that the major pharmaceutical companies still maintain control over who can manufacture their patented drugs and how much they cost. As the head of the Ralph Nader-founded Consumer Project on Technology, Love has been trying for years to persuade governments in developing nations to wrest control of AIDS-drug policy and pricing from the pharmaceuticals. Love argues that by issuing so-called compulsory licenses that would allow generic drug manufacturers to create cheap and ubiquitous versions of AIDS drugs, developing nations would drive down the cost of raw materials, increase competition and make the drugs more widely available.
Love is unimpressed by the fact that pharmaceutical companies, pressured by public opinion and media coverage, have taken positive steps to make AIDS drugs cheaper and easier to get. In almost every case, as he points out, they are simply dropping prices or just giving the pills away rather than granting licenses for local manufacture. And he doesn't believe that corporate largess alone will be enough to stave off one of the worst epidemics in human history.
Love has been engaged in the drug intellectual property debate since the early '90s. His absolute and uncompromising pursuit hasn't won him any friends in the pharmaceutical industry or in bureaucrat-magnet Geneva: He accuses officials in the nongovernmental organizations (NGOs) that control the global AIDS agenda of being lazy, timorous salary collectors who go out of their way to protect the interests of pharmaceutical companies.
More fundamentally, Love denies that the pharmaceuticals even own the rights to the drugs in the first place. He points out that many of the anti-retroviral drugs used to treat HIV and AIDS today stem from the government-funded cancer drug research of the 1980s. The rights to government-created innovations were sold to pharmaceutical companies at low prices (not at the astronomical rates demanded in recent airwave spectrum auctions, for example), guaranteeing companies like Bristol-Myers Squibb huge returns on investment. Given the public investment in these drugs, Love doesn't believe drug companies have the moral authority to determine who can or can't access them. And the fact that thousands of people in Africa continue to die because they can't afford the drugs adds urgency to his argument.
Love's position that Big Pharma doesn't own its medicines is an extension of his earlier work on cancer medicine patents. In 1991, he testified before Congress about a patent agreement between the federal government and Bristol-Myers Squibb that allowed the company to extend its patent protection for the cancer drug Taxol. The drug was invented by the National Institutes of Health's National Cancer Institute -- and it brought the drug company $1.6 billion a year in profits. Scrutiny led Congress to demand better accounting of the relationship between government-funded operations and pharmaceutical companies to determine whether the government was getting an adequate return on its investment. The Taxol case turned out to be a major precedent, since government funds have also been used to create other drugs for cancer, AIDS and other chronic or life-threatening conditions.
"Jamie, it seems to me, starts from a simple but hard-to-refute premise," says New York University journalism professor Merrill Goozner, who covered the drug industry as a reporter for the Chicago Tribune for years. "If the taxpayers paid for the development of the intellectual property, then they ought to get some kind of return on their investment when that I.P. turns out to be a significant scientific advance that leads to new products."
The biggest hurdle in the way of compulsory licenses are strict international intellectual property laws, which protect the patents and the bottom lines of pharmaceutical companies and thus encourage them to continue investing the millions in research required to develop new medicines. Western countries, led by the United States, have fought strenuously on the international front to protect those patents -- in effect, placing a greater value on intellectual property, in the name of spurring innovation and saving more lives in the future, than on saving lives currently at risk.
Increasingly, those battles are pitting industrialized nations against developing countries. Ninety-five percent of the world's HIV and AIDS cases are concentrated in developing nations, with the vast majority dying in Africa, but Africa comprises a minuscule 1.3 percent of the global pharmaceutical drug market. The World Health Organization estimates that only 10,000 to 25,000 of the 25 million HIV-positive or AIDS-infected people in Africa have access to the drugs they need.
Such dreadful statistics raise profound questions about how strict drug patent laws should be -- and explain Jamie Love's fixation on compulsory licensing. Compulsory licensing allows governments to suspend intellectual property laws -- either because they're impractical or because they interfere with a country's ability to deal with a health crisis. "I believe developing countries should be permitted to embrace weak levels of intellectual property protection on medicines, and specifically either exempt essential medicines from patent protection or use compulsory licensing liberally," Love recently told participants of a joint WHO/WTO meeting on intellectual property in Norway.
In fact, Love goes further: He believes pricing controls should be applied to essential drugs not just in the developing world but in the United States and other industrialized nations as well. He also calls for limiting patent protections for biomedical innovations.
It's this kind of quasi-socialist thinking that scares and angers conservatives, pharmaceutical companies and the politicians on Capitol Hill they funded to the tune of $26 million during the last election. In a recent article on the Wall Street Journal's editorial page, public health policy expert Robert Goldberg accused Love of being "more interested in eliminating profits from the pharmaceutical industry" than in eliminating AIDS. Calling Love's organization "selfish," Goldberg charged that pursuing Love's policies would "suck profits out of companies and eliminate research funding."
Not surprisingly, AIDS activists take a more positive view of the work of the fiery Love. "Jamie has played a pivotal role in establishing the framework of much of the treatment access campaign," says Kate Krause of the HealthGap Coalition and ACT-UP Philadelphia. Krause attributes the recent round of brand-name drug discounts in Africa to Love's work with Indian generic-drug manufacturer CIPLA. "He has been among the first to investigate issues that no one touches, such as drug company costs; and realizing that the stakes are so high, he makes audacious demands of the drug industry."
Journalism professor Goozner says that while Love is only one of hundreds of activists dedicated to the AIDS fight, "he's an awful important player." He notes that Love's Internet list-serv, where he posts virtually every significant news story and government report on intellectual property issues in the healthcare field, "knits that entire community together and serves as a forum for instantaneously keeping it informed of the latest and most significant developments."
"He's a tireless lobbyist in the cause," Goozner says, "traveling to all the major meetings around the globe and firing off instant e-mails to those not in attendance ... That he does it for a fraction of the pay of the hundreds of industry flacks and bureaucrats arrayed against him, yet exposes them at their own game time after time, never ceases to amaze me. I won't say that forcing the drug companies to back off in South Africa is his greatest victory, because it wasn't his alone. But it's hard to imagine it would have happened as soon as it did without him."
Love is a blue-eyed firebrand whose silver-streaked locks of brown hair are the only thing that hint at his 51 years of age. The day I visited Love's modest digs at the Carnegie Foundation offices in Washington -- Love's operation runs on a fraction of the budget of most NGOs involved in AIDS policy -- he had just returned from yet another trip to Europe, where he attended an international meeting on AIDS and intellectual property. He took me on a quick tour, through a fortress of bookshelves and metal filing cabinets, where he gave terse orders to colleagues and tried to make the world of intellectual property policy more thrilling for a reporter.
Love explained that he is pursuing a three-part strategy in his push for compulsory licensing, with South Africa as the centerpiece. First, he's working with CIPLA, the generic drug manufacturer, to demonstrate what it actually costs to manufacture AIDS drugs: Love and CIPLA claim that it costs less than $1 a day to manufacture a three-drug cocktail for one patient. Second, he's turning to the private sector, lining up the international mining company Anglo American and healthcare providers to demand compulsory licenses from the South African and other governments. Finally, if those licenses are issued, he will work with CIPLA to get drugs to the corporations and healthcare providers that want to provide them to their employees and patients.
The foundations of Love's compulsory licensing push were laid in 1997, when the South African government passed a law that would make compulsory licensing and parallel importing easier. (Parallel importing is the practice of purchasing drugs from a third party in another country instead of directly from the manufacturer. It's cheaper because pharmaceutical companies usually charge lower prices in poorer countries.) The United States, under the stewardship of then-Vice President Al Gore, pressured South Africa to abandon or revise the legislation, and the pharmaceutical companies sued. In 1998, the South African government backed off, saying it would not issue compulsory licenses. Then, in March, a month before the trial was slated to begin, it also said it would not seek to do parallel imports. A month later, the pharmaceutical companies dropped their case against South Africa.
It's been over a month since the case was dismissed. Unwilling to take on a difficult legal battle against the South African government, few companies have stepped forward to demand licenses to produce generic versions of AIDS cocktail drugs: Only CIPLA and Aspen Pharmacare, South Africa's largest generic drug manufacturer, have attempted to do so. Meanwhile, drug companies have been slashing their prices -- in order to discourage South Africa from succumbing to the temptation of compulsory licensing. But he says they haven't dropped them to rock-bottom production cost, and working with CIPLA, he has numbers to prove it.
The pharmaceutical GlaxoSmithKline, for example, announced on June 11 that it would discount Combivir -- a two-drug combination -- to $2 a day for governments, charity organizations and NGOs in Africa. CIPLA, however, has offered the same drug combination of Lamivudine and zidovine plus a third drug, nevirapine, for between 96 cents a day for nonprofits or $1.64 for governments -- at a low-end cost of $350 a year, as much as 50 percent less than Glaxo's lowest bid, according to the World Health Organization.
Given these numbers, in a situation where even pennies more in cost mean lives lost, Love keeps hammering away on the generic-licensing theme. And he's lined up some heavy hitters in the private sector to back him: The international mining company Anglo American, the largest mining company in South Africa, has proposed supplying as many as 50,000 of its HIV-positive employees with generic drugs made by CIPLA. In March, CIPLA registered a request with the South African government for a compulsory license for the key drugs it needs to produce the cocktail. The company expects a prolonged legal battle with the government.
Love turned to the private sector in part because of his frustration with the South African government's slow response to the AIDS crisis -- a frustration born of his experiences during the South African trial, when he served as an advisor to the Health Ministry, a party to the suit. South Africa's hesitations and missteps on the issue are well-chronicled. President Thabo Mbeki has expressed concerns about the safety of cocktail treatments and even questioned publicly, to international dismay, whether HIV is the true cause of AIDS. The South African government has so far refused to declare the AIDS crisis a national emergency -- although a staggering 4.7 million South Africans are infected. And it has been reluctant to issue compulsory licenses or support proposals like Love's. In a recent interview with the U.K. Guardian, South African Health Minister Manto Tshabalala-Msimang said: "To be frank ... we haven't thought it through." In her Guardian interview, Tshabalala-Msimang asked the reporter whether Anglo American, the company that Love is working with to distribute anti-retrovirals to its workers, would provide the families of its miners with access to the drugs and also what effect the heat in the mines would have on workers taking the drugs. These were not questions that inspired confidence that the minister was fully informed.
To be fair, the South African government also has a more legitimate reason for its ambivalent attitude toward drug treatment: Proper use of retrovirals requires a healthcare infrastructure that the country lacks. Anglo American has a better chance of efficiently delivering and administering the drugs -- which is another reason Love is optimistic about private initiatives. Lending credence to his position is the decision made by auto giant DaimlerChrysler earlier this week to provide anti-HIV cocktail treatments to employees and their families, totaling as many as 23,000 patients.
Mention the global AIDS bureaucracy, centered in the U.N. organization UNAIDS and spread through innumerable NGOs, and Love scoffs derisively. "I pitched this private-sector stuff because if you sit around and wait for these assholes at the U.N. agencies to get their acts together, a lot of caskets are going to go into the ground," he says. "They're not men of action. They're followers, not leaders. There's no leadership taking place at the U.N. agencies. There's a lot of great pensions that are coming down. There are some high salaries being paid and sumptuous meals being consumed and business-class tickets being given out. But I have to say: Leadership? No, I'm sorry. I mean, this is Basic 101 stuff. What are we doing? We're figuring out how much it costs to manufacture drugs, we're figuring out how you can solve the intellectual property problems, how you can solve the drug registration problems. We're trying to get people to act," he says.
Love isn't impressed when I point out that UNAIDS has met with CIPLA, and that international organizations monitoring essential drug pricing routinely cite CIPLA's quotes in their comparison charts. "When things are on the front page of the New York Times, they have to acknowledge them," he says, raising his voice. "They haven't been the people pushing compulsory licensing. Instead, they're the ones making the big bucks. And that's wrong because they're the ones with the big megaphone and the big voice."
The United Nations recently announced that it would create a $7 billion superfund to fight AIDS, malaria and tuberculosis. Details of that plan are expected to be announced at a U.N. General Assembly meeting on the AIDS crisis in New York next week. But Love has little confidence that the money will be used in the most effective way.
Officials from the United Nations and global AIDS organizations, for their part, say that activists like Love, fixated on treatment, ignore the crucial element of prevention. Instead of emphasizing widespread administration of AIDS cocktail treatments, organizations like WHO and UNAIDS have stressed education and prevention programs, which are easier to administer and potentially have the most long-term impact. Pieter Piot, the famous Belgian epidemiologist who helped identify the Ebola virus and is executive director of UNAIDS, recently described his view for how the U.N. plan should work in the New York Times: "We feel strongly that the response to AIDS has to be a balanced one: prevention and treatment. In the current climate, people forget that. I'm really getting tired of the fact that a terribly complex problem of treatment and care for people having H.I.V. is reduced to the price of anti-retroviral drugs."
Those are exactly the kinds of statements that raise Love's ire. "Are we supposed to say that since we can't save all of them, we're going to let them all die? That's an appalling, racist attitude. We're going to do all we can to save them," he says. "We make our little contribution on the intellectual property side and you'd think we'd raped Queen Mary."
Love says that when famous AIDS bureaucrats like Piot criticize his work, they fail to see the forest for the trees. He says that what he and his organization are doing is just one part of the puzzle, though admittedly one that's currently getting a lot of attention. "We're not saying prevention's not important. We don't campaign against those things -- everyone knows those are important."
What of the argument, proferred by pharmaceuticals and the South African government, that sloppy distribution and administration of cocktail drugs not only undermine their effectiveness but could lead to more resistant strains of HIV -- that it would be more effective to focus on HIV education and prevention, and on use of the drug AZT, which can reduce transmission of the virus from mothers to babies? Such arguments were recently echoed by the Bush administration's highest-ranking foreign aid official, Andrew Natsios, who told the Boston Globe that monies given to the United Nation's new AIDS superfund should be used almost exclusively for prevention.
In his comments to the paper, Natsios cited poor medical infrastructure and a lack of familiarity with Western ways, including the ability to tell time effectively enough to administer cocktail treatments. "You have to take these [AIDS] drugs a certain number of hours each day, or they don't work," Natsios told the Globe. "Many people in Africa have never seen a clock or a watch their entire lives. And if you say, one o'clock in the afternoon, they do not know what you are talking about. They know morning, they know noon, they know evening, they know the darkness at night."
Love joins other AIDS activists (and New York Times columnist Bob Herbert, who accused Natsios of perpetuating stereotypes about African culture) in rejecting the argument that anti-retrovirals are too complex to be effective in Africa. He points out that combinations of different medicines now enable HIV patients who have access to such pills to take as few as four pills each day. This treatment regimen is currently being used on HIV-positive homeless both in San Francisco and in South Africa, where Doctors Without Borders is providing cocktail treatments to one village.
The real issue, Love says, is price. And by teaming with CIPLA, he is attempting to prove that AIDS drugs can be made affordable, even in impoverished nations like South Africa. In CIPLA, Love found a company willing to stick its neck out -- and take the heat for doing so. When CIPLA made headlines around the world by quoting $350, the lowest cost ever for a three-drug anti-HIV cocktail, the pricing came as the result of Love's negotiations with CIPLA CEO Yusuf Hamied -- the generic drug mogul who has become a huge thorn in the side of the pharmaceutical giants with his rock-bottom pricing. It was a watershed moment for international activists fighting for inexpensive access to AIDS drugs. Even the international organizations Love scoffs at cite the figure as a standard in international drug pricing.
"It shocked everyone and blew up in smoke the idea that the pharmaceutical companies were making donations," says Love. "It was a third of the best prices you could get out of the branded guys in what they thought were donations."
Not surprisingly, the action didn't exactly elicit praise from the pharmaceutical industry. At a recent industry conference GlaxoSmithKlein CEO Jean-Pierre Garnier described CIPLA as price-undercutting "pirates," and said the company "is not doing this to get a Nobel prize." CIPLA's Hamied responds to such criticism by saying, "Indeed, we are a commercial company. But I market 400 products in India. If I don't make money on a half-dozen of them, it's no big deal. I don't make any money on the cancer drugs we sell or drugs for thalassemia, a blood disorder that's common in India. We sell these drugs virtually at cost because I don't want to make money off these diseases which cause the whole fabric of society to crumble. India alone will have 35 million HIV cases by 2005, and it's something we can't afford."
In fact, CIPLA needs to make a profit, however tiny, to demonstrate that the pharmaceutical companies can lower their prices dramatically and still turn a profit on AIDS drugs in developing nations like South Africa. Although the margins are razor-thin, Love says CIPLA will be able to turn a profit on its generic AIDS drugs in South Africa and wherever else it is able to sell them. But to make that profit it will need to get a compulsory license from the government -- otherwise, it won't have a market. Love believes that if the license is granted, a private medical infrastructure can be gradually built, making treatment possible for thousands. And successes in the private sector will increase pressure on South African and other governments to act, Love says.
"At a certain cost, the private sector and people can pay out of their own pockets for drugs. We're interested in those cases," he says. He also claims that competition among generic-drug manufacturers could push the price even lower than what CIPLA is offering. "We could get to $250 within a year," he says.
To bolster that argument, he cites Brazil, where looser intellectual property laws have allowed local manufacturers to produce generic cocktail drugs. The country has a highly developed healthcare infrastructure for a developing nation, and provides treatment to more than 100,000 HIV-positive and AIDS patients. Love, who is a Princeton-trained economist, estimates that the demand for the raw materials in the cocktail drugs in Brazil has reduced their cost from $10,000 per kilo three years ago to $700 today.
In other words, the competition among generics is driving prices down. That's the sort of economy of scale that Love hopes will be reproduced in South Africa and, later, in industrial nations in Europe and the United States. But with big pharmaceutical companies attempting to undercut compulsory licensing by negotiating with employers and healthcare plans in South Africa to sell them their drugs directly, the question is whether Love and Hamied can outfox the global corporations. So far they have -- at least in terms of pricing.
"People have been trying to deal directly with the pharmaceutical companies for years," says Love, addressing the differences between what CIPLA and the Consumer Project on Technology are trying to do and the ambitions of Aspen Pharmacare, the South African generics company that is seeking licenses directly from the patent holders. "The drug companies want to avoid compulsory licensing because it's the big stick. If you give a voluntary license, that pulls the rug out from beneath generic-drug manufacturers like CIPLA."
Even if Love fails in South Africa, there are more fronts in the compulsory licensing battle. As part of its anti-AIDS initiatives, CPT has been developing model legislation countries can use to pass their own laws making compulsory licensing easier and more efficient. The first is likely to be Brazil, which flouted American pressure and issued its own compulsory license for AIDS drugs.
CPT is pressuring the Bush administration to drop the intellectual property rights action it recently lodged against the Brazilian government with the World Trade Organization. The dispute stems from a Brazilian law that permits local companies to manufacture generic versions of a drug if the company holding the patent does not produce it in that country. Though the U.S. government believes the law is protectionist, it has allowed Brazil's local manufacturers to produce widely distributed generic AIDS drugs. It's the kind of success that Love likes to cite when pressing his case for compulsory licensing. But the legal dispute could go on for years.
The U.S. was able to file the complaint under the TRIPS (Trade-Related Aspects of Intellectual Property Rights) provision of the WTO agreement, which requires strict drug patents in all member nations. In fact, however, the U.S. is complaining about the local-producer provision of Brazil's patent law. If Brazil had declared a public health emergency, it could have legitimately issued the compulsory license for the drugs and the U.S. would have no case. CPT researchers identified three European countries with similar local production provisions. "If the U.S. wants to establish a precedent, why is it suing Brazil? Why don't they just sue Greece, Ireland or the Netherlands?" Love asks.
According to Love, the Clinton administration wasn't any better than the Bush White House. Al Gore was often criticized for his heavy-handedness in dealing with South Africa as its legislature moved toward passage of its patent law in 1997. And Love says Clinton's trade representative often sought unilateral intellectual property agreements with countries that provided even less wiggle room for compulsory licensing than TRIPS.
In the end, the underlying issue raised by Love's crusade is the ethics of compulsory licensing. The most common argument against compulsory licensing is that taking away the right of pharmaceutical manufacturers to set prices in a given market serves as a disincentive for them to invest the $500 million in research and development costs necessary to create a new drug (a figure widely quoted by the Pharmaceutical Research and Manufacturers Association). It's an argument that can't be easily dismissed when talking about the developed world. No doubt, if American and European patients demanded the same generic drugs and low prices -- a stance Love has endorsed -- profits would be severely threatened. But with the minuscule size of pharmaceutical markets in developing countries, the argument doesn't hold much weight.
In an attempt to address these profit-incentive concerns, Yale economist Jean Lanjouw laid out a possible third way of addressing the intellectual property problem in a report for the Brookings Institution released last week. In effect, Lanjouw's proposal would require pharmaceutical companies when applying for intellectual property protections to choose between getting patent protection in industrialized nations or developing nations. Under that solution, patents for all new AIDS drugs would likely be protected in places like the United States or Europe, but generics could be produced in poorer nations where the demand is high but the market small. In contrast, a research-based pharmaceutical company could choose to protect a patent for a malaria drug in developing nations, where cases are clustered, rather than the U.S. or Europe, where there are very few cases.
"Neither price controls nor compulsory licensing offers what the proposal here was designed to provide a feasible way to allow competitive pricing in some areas while keeping in place incentives for private firms to invest in research on diseases specific to poor countries," Lanjouw wrote in her policy paper. She argues that the current proposals for compulsory licensing are "indiscriminate" and could serve as disincentives for pharmaceutical companies to produce new drugs.
With typical frankness, Love dismisses Lanjouw's proposal as "stupid," not to mention possibly unconstitutional. "It's based on the idea that somehow, it's legally possible for countries in the north to take away the rights of their own companies to enforce patents in the south." Nonetheless, Lanjouw's proposal has attracted the interest of the World Bank, the United Nations and the Treasury Department, which are all said to be studying it.
Meanwhile, the death toll mounts. And those who believe in compulsory licensing, or weaker intellectual property laws for drugs in developing countries, like to cite the case of Jonas Salk, the inventor of the polio vaccine. As the ancient scourge of polio was rolled back by his vaccine 50 years ago, Salk was asked why he never took a patent out on the medicine -- a patent that would have made him wildly rich. "There is no patent," he replied. "Could you patent the sun?"