Plans for a two-tier system for drug pricing, which will supply cheap medicines to poor countries while they remain far more expensive for the rich, will be launched today by Clare Short in a bid to cut the vast numbers dying from Aids, tuberculosis and malaria.
The ambitious proposals, which have the backing of Tony Blair, aim to carve a clear path through the quagmire of patents and vested interests which have kept the price of life-saving drugs too high for millions of poor people.
But they are likely to fall foul of the American pharmaceutical giants and potentially provoke confrontation with the US government, which habitually fights their corner.
The plan comes from a high-level working group chaired by Short, whose report, to be launched today, will say that drug companies should sell drugs for Aids, TB and malaria to the poorest countries at cost price.
The group was convened at the request of the prime minister after the G8 summit in Okinawa last year.
Representatives of the British companies GlaxoSmithKline and Astra Zeneca and of the World Health Organisation were among those who took part. This morning the group will meet Blair at Downing Street to discuss the way forward.
Millions are dying in developing countries of preventable diseases such as Aids and curable diseases like malaria and tuberculosis.
The HIV/Aids epidemic is doing enormous economic, social and political harm, wiping out a generation of young adults who were workers, parents and teachers.
Aids, TB and malaria cause six-million deaths a year, costing the afflicted countries $120bn in lost productivity.
Life-saving drugs which are available in rich countries are prohibitively expensive in the least developed countries — particularly for HIV/Aids.
The working group says that drug companies must sell them at ”near to cost price” in the poorest countries and that ”voluntary, widespread, sustainable and predictable differential pricing” must become ”the operational norm”.
The group pledges in the report to work with the international community to make this a reality and to monitor whether cheaper drugs do reach those who need them.
They hope to bring the rest of the G8 on board at the summit in Paris in June. There is likely to be considerable difficulty persuading the US, which is married to the interests of most of the pharmaceutical giants, to go down this road. This is despite the fact that the proposals are limited to Aids, TB and malaria and that only the least developed countries and all in sub-Saharan Africa stand to get the drugs at cost.
The pharmaceutical industry is being offered promises that tough measures will be taken to ensure that cost price drugs are not brought back to Europe or the US by profiteers.
The UK government is pledging that it will not attempt to extract cheaper prices here from drug companies that have slashed their profit margins in the developing world. The British companies appear ready to do a deal, but drug companies in the US may be reluctant to reveal how much medicines really cost.
The group bows to the drug industry’s argument that some information is commercially sensitive and suggests that a confidential independent audit could be used to establish what the price should be after ”R&D, marketing and sales, and corporate administration costs” are stripped away.
Drug companies that have offered essential medicines in Africa at what they say are cost price — under pressure from Aids activists — have still been undercut by companies making copycat medicines based in India and Thailand where patent rules do not yet apply. The group acknowledges that bringing brand-name drug prices down is not the end of the story. Competition with generic manufacturers will also play a part, it says, and developing country governments need money to buy medicines that may still be unaffordable for the majority.
The group also says there is an urgent need for more investment in research and development for the diseases of poor countries, and that there must be monitoring to establish how much the industry is doing to address illnesses such as diarrhoeal and respiratory diseases which kill thousands of children. – Guardian Unlimited (c) Guardian Newspapers Limited 2001