Access to medicines
The termaccess to medicines encompasses the array of problems faced by the world’s lowest-income inhabitants, who often cannot afford, or do not have access to, medications that could greatly reduce the disease burden under which they suffer. The problems include deficient medical infrastructure, imbalances between prices and ability to pay, and the lack of incentive to develop medicines that would treat diseases endemic to low-income nations.
During the 20th century, numerous technological breakthroughs in pharmaceutical therapy made it possible to cure or at least alleviate most of the diseases that have killed or debilitatedmillions of people each year. But the ability to purchase thosemedicines is concentrated in relatively affluent nations, where the vast majority of pharmaceutical sales occur. At the other extreme, roughly 60 percent of the world’s population live in nations defined by the United Nations in 2000 as ‘‘low income,’’ with per-capita gross national product averaging less than $530 (at prevailing exchange rates) a year in 1998.TheWorld Health Organization (WHO) (2004, 61) estimates that in 1999 those nations made only 2.9 percent of the world’s pharmaceutical purchases. The WHO has predicted that by expanding access to available health interventions, and especially essential medicines, 10.5 million lives could be saved annually by the year 2015. Lack of access to medicines and complementary health care in turn perpetuates a vicious spiral: poor health impairs productivity and economic development, while low productivity keeps the citizens of the least-developed nations too poor to afford appropriate health care.
The medicine access problem has several facets. The overriding problem is inability of individuals to afford medicines. Health insurance is an absent corrective; an estimated 90 percent of the people in developing nations lack such insurance. Inability to pay restricts not only the demand for medicines but also the supply of physicians able to diagnose diseases and recommend appropriate therapies. Nations classified as lowincome in 1998 by the United Nations had 70 physicians per 100,000 population; those classified as high income, 252. In many instances, the only advice available comes from traditional practitioners whose herbal remedies may work for some indications, but with at best erratic success due to the lack of evidence from controlled experiments. For diseases such asAIDS,malaria, and tuberculosis, carefully administered therapy regimensmust bemaintained to inhibit the emergence of resistant strains. Counterfeit versions of first-world drugs continue to be a significant problem, in part because third-world health-care authorities lack systematic testing and approval institutions.
In their efforts to combat the burden of disease, health authorities at the WHO and in individual lessdeveloped nations have since 1977 published ‘‘model lists’’ of so-called essential drugs. Drugs have been included on the list in part because of their proven efficacy and partly because of their relatively lowcost. Low cost in turn has been achieved by emphasizing generic drugs, that is, those on which patent rights restricting supply to a single firm have expired. Historically, more than 90 percent of drugs on the WHO’s model lists have been generics. However, this emphasis was threatened by the emerging epidemics of HIV/AIDS and related opportunistic diseases such as resistant tuberculosis and cryptococcal meningitis. Virtually all of the drugs effective against those diseases were patented and, at least initially, available only at costs for a year’s treatment exceeding total average incomes of citizens in lowincome nations.
The Trade-Related Aspects of Intellectual Property (TRIPS) agreement culminating the World Trade Organization’s (WTO) Uruguay Round Treaty, signed at Marrakech in April 1994 and implemented in 1995, exacerbated this situation.Up to that time, many less-developed nations, emulating some more prosperous countries, were able either to produce or, more likely, import patented drugs because they granted no patent rights on pharmaceutical product inventions. TRIPS required that signatories to the Marrakech treaty begin awarding such patents within one year for the wealthiest nations, five years for middle-income countries, and ten years (later extended to the year 2015) for the least-developed nations. Transitional provisions also required grants of marketing exclusivity for post-1994 inventions on which initial patent applications were filed. Especially for AIDS and AIDS-related diseases, this posed special problems. Up to that time, the newest and most effective drugs might be available generically fromIndia and other nations that had not awarded pharmaceutical product patents. But as the TRIPS provisions began to bind on India, Brazil, South Africa, and other nations, their ability to continue supplying low-cost generics atrophied.
The combination of TRIPS and the AIDS epidemic precipitated a crisis. Two main solutions emerged. First, at a joint WHO WTO conference in Høsbjør, Norway, in April 2001, a consensus emerged encouraging the world’s leading researchoriented pharmaceutical companies to practice ‘‘differential’’ or ‘‘Ramsey’’ pricing. The companies would charge high prices in rich nations and make life-saving drugs available to consumers in low-income nations at prices approaching marginal cost. Fromwhat had been near parity of AIDS drug prices across rich and poor nations (Scherer and Watal 2002),wholesale priceswere shown byLucchini et al. (2003) and the UK Department for International Development (2005, 22) to have plummeted in the least-developed nations, in some cases by asmuch as 98 percent.One consequence of such discriminatory pricing was the reexport of low-price drugs to highprice nations, but steps to suppress this ‘‘parallel trade’’ were quickly implemented. Donations from multinational pharmaceutical firms to organizations providing health care in less-developed nations in effect, sales at a zero price also helped increase access to essential medicines.
Second, because of exceptions written into the original TRIPS agreement, nations were able to threaten or actually implement compulsory licensing of existing or new patents on AIDS and other epidemic disease drugs in order to authorize generic production. Threats of compulsory licensing inducedmultinational patent holders to reduce sharply the prices of their branded drugs in the third world and enter into voluntary agreements with such nations as Brazil and South Africa to permit generic supply. A limitation in the original TRIPS text was that production under a compulsory licensewas to be ‘‘predominantly for the supply of the [Member’s] domestic market.’’ However, many of the world’s least-developed nations lacked both the technological know-how and sufficientmarket scale to produce generics for their own use. A permissive amendment to the TRIPS agreement accepted in August 2003 following a mandate issued at the Doha Round of international trade negotiations in 2002 alleviated this problem. The TRIPS agreement does not require nations formally to report compulsory licensing decrees, and as of 2006, only an AIDS drug license byThailand to a government entity,minimally controversial under TRIPS, had come to light publicly. The existence of other unreported cases cannot be ruled out. Alternatively, post-2000 price and voluntary license developments may have been sufficient to satisfy the limited ability of low-income nations to distribute drugs effectively.
Incentives for Drug Development
Another fundamental problempreventing access tomedicines is the lack of innovative drugs targeted specifically toward diseases prevalent only in the third world, for instance, sleeping sickness, Chagas disease, and leishmanisais. Because low-income nations have limited purchasing power, multinational pharmaceutical firms lack demand-based incentives for research and testing on drugs targeted toward the socalled tropical diseases and the resistant strains that continue to evolve. A study for Medicins sans Frontie`res (2001) revealed that among 1,393 new drug chemical entities introduced intoworldmarkets between 1975 and 1999, only 13 (or 15 counting tuberculosis) drugs were indicated for tropical diseases. Also deficient has been the development of vaccines that could prevent diseases curable using modern medicines, but at costs too high to be sustained by overstressed third-world medical care providers.
Here too the AIDS crisis played an important role in inducing corrective initiatives. Some large multinational pharmaceutical companies, seeing the problemas amoral challenge, increased research and development (R&D) efforts targeted at third-world diseases and established new laboratories nearer the potential markets. Private philanthropic organizations such as the Gates Foundation have provided generous subsidies to support R&D on new drugs and vaccines to combat third-world diseases. Their efforts complemented the work of the UN AIDS initiative and similar programs by national governments. In 2005 6, delegates from the world’s eight largest market economies (the G-8) approved in principle a program to stimulate the development of vaccines by agreeing to purchase at generous prespecified prices $3 billion worth (in each category) of new vaccines effective against AIDS, malaria, and tuberculosis. However, as of 2006, the G-8member nations were tardy in backing their good intentions with actual purchase guarantees and the national budget commitments necessary to implement them.
Progress is beingmade in increasing the supply of affordably priced medicines to low-income nations, but much remains to be done. Overcoming the remaining barriers to access to medicines could alleviate disease worldwide and contribute to economic development. See also Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS); health and globalization; HIV/AIDS