Doping the Dopes

A 2-part article by Khadija Sharife, a journalist and visiting scholar at the Center for Civil Society, makes interesting reading
http://english.aljazeera.net/indepth/opinion/2011/06/20116297573191484.html
http://english.aljazeera.net/indepth/opinion/2011/06/201162994039172374.html

During the past several decades, the pharmaceutical industry has largely been the most profitable industry in many developed nations economy.

Alongside pneumococcal diseases such as meningitis and pneumonia, rotavirus-related diarrhoea is a primary childhood killer in developing countries, thought to kill 500,000 children each and every year. British-based drug corporation GlaxoSmithKline (GSK) recently offered a five-year deal to supply poor nations with 125 million doses of the rotavirus vaccine - Rotarix - at $2.50 a dose, just five per cent of the current going price in Western markets (Gates claimed that he felt "great about the prices" GAVI received but acknowledged that Indian and Chinese manufacturers could bring the price down"somewhat" if they ramped up vaccine output). Through the GAVI group, the international vaccine agency financed by developed nations such as the UK, it is hoped that GSK and pharmaceutical multinational Merck - who, between them, dominate the rotavirus vaccine market - will provide a secure line of low-cost drugs for as many as forty countries in the near future. But is it really a discount, and if so, who is paying the cost? The financing mechanism subsidising the vaccine is named the Advance Market Commitment (AMC), a fund created by the G8, as well as the World Bank and the Gates Foundation, as a "pull" incentive for drug multinationals to consider developing countries' long-term markets for pharmaceutical "public goods", such as vaccines. Rotarix has taken off well: Since 2007, some 50 million children - through 100 million doses - have already benefited from Rotarix; by 2009, global Rotarix sales reached $440 million - increasing by 50 per cent from 2008, and Merck's Rotateq reach $564 million in sales. GSK Chief executive Andrew Witty described the pricing structure as, "neither a gimmick nor a one-off philanthropic gesture", but rather "part of a concerted strategy to change our business model" - designed to combine "commercial success with long-term sustainable contributions". Presently, unless Merck makes an entry into the international marketplace, there exists no competition for GSK which already describes itself as,"the main supplier of vaccines to UNICEF and GAVI". According to GSK, PAHO and other aid agencies intend to purchase enough Rotarix to ensure immunisation for 80 per cent of the world's children. Avant estimates that the global market for the drug will generate as much as $1.8bn annually.

Vaccines are often priced 40 - 100 times more than the cost of production. Drug companies claim that pharmaceutical research is very expensive and that R&D costs are extremely high. Drug companies such as GSK have often claimed that the high cost of "innovation" ie: research and development (R&D) is between $1bn and $1.7bn to bring a new drug to market. From 1996-2005, Big Pharma firms spent $739bn on marketing and administration (M&A): "Administration" costs here include accounting, executive salaries (including bonuses, stock options etc) - as well as human resources expenditure. "Marketing", meanwhile, consists of direct-to-consumer advertising, sales pitches and free samples to doctors, alongside advertising in medical journals. During the same 1996-2005 period, drug companies invested $288bn in R&D and $43bn in property and equipment, while generating $558bn in profit. But the breakdown of R&D itself is opaque: companies do not list actual expenses for the development of a particular drug, claiming that information comprises proprietary and/or confidential commercial secrets. The gigantic legal expenses incurred by specialists for developing patents, legal defence, sourcing the tax havens and other Intellectual Property-related issues constitute more costs - included as R&D.

Intellectual property rights management can be a lucrative business indeed. The first HIV/AIDS treatment, azidothymidine [AZT], sold under the brand name Retrovir, was manufactured by the company Burroughs Wellcome, later incorporated into GSK. The corporation charged patients upwards of $10,000 per year for treatment and congratulated themselves on the achievement of life-saving medicine. Yet it was National Institutes of Health/National Cancer Institute and alongside scholars at Duke University who identified its cause - the HIV retrovirus, screen antiviral tools, including the AZT , discovered the effectiveness of AZT agathe AIDS virus and conducted early clinical trials. "The Company [Burrough's Wellcome] specifically did not develop or provide the first application of the technology for determining whether a drug like AZT can suppress live AIDS virus in human cells, nor did it develop the technology to determine at what concentration such an effect might be achieved in humans. Moreover, it was not first to administer AZT to a human being with AIDS, nor did it perform the first clinical pharmacology studies in patients. It also did not perform the immunological and virological studies necessary to infer that the drug might work, and was therefore worth pursuing in further studies. All of these were accomplished by the staff of the NCI working with the staff of Duke University. Indeed, one of the obstacles to the development of AZT was that Burroughs Wellcome did not work with live AIDS virus, nor wish to receive samples from AIDS patients." Samuel Broder, head of the National Cancer Institute wrote.

GSK made billions of dollars from a patent, controlled a market, and affected the lives of billions of people worldwide, for something they did not invent. In 2005, GSK was accused of artificially boosting their short-term profit by not increasing production to meet drastically increasing demand - thus creating "scarcity" for their patented product.

Developed nations banging the trade-related intellectual property drum, and intellectual property captains such as Bill Gates, will not bypass the anti-competitive grip of patents - for which there exists no free market, and where all patent value is opaquely imputed by the company in question. This is the flipside of "charity," this is a calculated attempt to sustain the status quo - a world structured on inequality, where the gap between those with access to medicine, and those without, is not only undeserved and systemically unjust - but also lethal