Aids Pharmaceutical

Introduction

Heralded as the most deadly disease in human history, the presence of AIDS in Africa is explosive, representing 64.5% of the world's infected population and 77.4% of deaths (equating to 2.4 million individuals). An epicenter for infectious activity, Sub-Saharan Africa generates 65.3% of the 4.9 million new cases developed each year. Marginalized by poverty, poor diet and lack of private insurance, only a minute proportion of the 25.8 million people infected gain access to anti-retroviral drug therapy subsidized by private funding, corporate and non-governmental organizations.

With current individual treatment averaging $15,000 per year, human advocacy groups argue that there are two epidemics - a physiological one for the wealthy and a financial one for the poor. While pharmaceutical companies profit from billions of dollars in revenue, their ethical intentions are acutely questioned by governments, NGOs and consumers igniting controversy for solutions to this global concern. At the cynosure of this debate lies Africa, whose non-capitalistic economy, prominent population and poverty status epitomizes the conflict of morality versus corporate profitability.

Patents and Property Rights - Pharmaceutical Response

In assessing the controversy over protecting idea ownership versus humanitarian obligation, proponents for corporate responsibility cite the longitudinal effects of AIDS as a shared global problem with no socioeconomic boundaries. However for pharmaceutical firms, the onus for philanthropy and its limitations represents a dichotomy of ethics versus property rights, where the interplay of investment costs and revenue generation are challenged.

Associated with greater foreign investment and trade, pharmaceutical patents translate into rapid economic growth fueling innovation and fortifying competitive positioning. Of global research expenditures, American costs show the largest twenty year increases at 1,351% while overseas investments rose 828.2%. In tandem to this, the United States ranks the highest for drug pricing, substantiating its position as global leader in drug development at 45% of worldwide production and ranking second in new product placement behind Europe. The historical origination of patents to recoup developmental costs is additionally substantiated by investments of time, rarity of FDA approval, need for technological innovation and specialized employment to generate income and fuel economic growth. While corporations endorse the indispensable role of costs to incrementally generate further research, critics undermine excessive expenses as a product of exclusivity marketing which serves in the self interests of pharmaceutical firms, thus opening criticism that shareholder interests supersede social dividends2.

In 1997 South Africa passed legislation that would allow the country to purchase branded drugs at the lowest rates available in compliance with international agreements. The subsequent year, 39 pharmaceutical firms sued the government claiming infringement on intellectual property rights, justifying prices in terms of developmental costs, time and resources involved in creating effective FDA approved medications. Tacitly underscoring this viewpoint was that the lowering of prices would result in a paradigm shift for developing nations' programs, thereby undermining future global profitability. In May 2000, five multinational drug companies - Boehringer Ingelheim, Bristol-Myers, Merck, Glaxo and Roche - concurred to reduce AIDS drug prices by up to ninety percent to the African government. By April 2001 the lawsuit petitioning a reduction in pricing was dropped3.

Africa's Endemic Features

To displace profit criticisms, corporations emphasized social weaknesses that undermined treatment efficacy such as monitored distribution, implementation, education, infrastructures and contributory health issues (clean water, diet, medical staff). Historically within Africa, social stigma has propelled governmental indifference and fueled ramped infection within the populace, thus escalating mortality rates. Areas with the highest infection occurrences lack basic healthcare talent, clinics for disbursement and program monitoring, particularly with complicated antiviral treatments. Contributory issues such as clean water, adequate roadways and diet likewise counteract gains made by medicine. Additionally, demand fed corruption ignited an estimated 50% of drug inventory theft in 2001 from South African public hospitals and clinics4. From the corporate standpoint criticism was misdirected to costs when in reality Africa's endemic environment significantly detracted from disease management.

Pfizer's Global Role

Pfizer Inc., established in 1849 in the United States, became the world's largest and wealthiest pharmaceutical company after its merger with Warner-Lambert in 2000. Despite the onset of the AIDS crisis within impoverished Africa, highly profitable pharmaceutical companies such as Pfizer focused preeminent concern on preventing generic AIDS drugs from entering developing nations. Nongovernmental agencies such as Oxfam cited Pfizer's inadequate involvement by illustrating their favoritism for intellectual property rights versus humanitarian causes on a global scale5. In particular, Pfizer's involvement in PhRMA, TRIPS and the U.S. government's enforcement of Section 301 underscored the company's profit motives.

Currently, Pfizer sells seven of the world's top thirty drugs with a 2005 net profit of $42.8 billion6. Henry McKinnel, Pfizer's Chairman and CEO directs PhRMA, the most powerful pharmaceutical lobbyist coalition in the United States. The firm's close political relations to the U.S. government came under scrutiny during the 2000 election in which they made the second highest donation of $2.3 million, 86% of which went to the Republican Party5. Given financial interests, Pfizer actively protects its political relations and ranks one of the top five spenders in political support donating $3.8 million in 1999 on political lobbyists5, thus extracting favoritism from governmental parties advocating their best interests.

Alongside involvement with PhRMA, Pfizer participates in the Trade-Related Aspects of Intellectual Property Rights (TRIPS), a twenty year patent regime within the World Trade Organization in which all 141 member states are obligated to abide by. This conformity is criticized for its dictorial approach as it is "likely to keep the prices of vital new medicines higher than they would otherwise be and thereby exacerbate the vast health differences between rich and poor countries"