Blade of truth lacerates the a web of intrigue
This article was originally published in Scrip
Medicins Sans Frontiers has just released the 14th edition of its annual report on the price of AIDS/HIV drugs. The report’s title - Untangling the web of antiretroviral price reductions – implies that a catalogue of conspiracy and intrigue within the pharmaceutical industry is preventing affordable therapies reaching patients in many poor countries.
MSF points the finger at international trade rules and the patenting in key medicines producing countries such as Brazil and India. It suggests that pharmaceutical companies are actively excluding middle-income countries from the cheapest prices, and are looking to engage in case-by case negotiations to establish a price. The report’s general tenor is one of suspicion, a sense that that firms are reneging on prior commitments to the global AIDS/HIV programmes, or are at least attempting to squeeze more from the middle economy countries.
However, as recognised earlier by William of Occam, less complicated explanations may serve equally as well to describe the facts of the matter.
The simplest explanation for pharma’s reluctance to provide cheap medicines across the board to middle income economies is that the group include countries such as India and China (lower middle income) and Brazil (upper middle-income).
These three nations have two other important characteristics besides their average income levels that are germane to pharma’s apparent reticence.
Firstly, they are huge and rapidly growing economies which drug firms see as an engine for future sales growth. And secondly, each is developing its own domestic drug industry, albeit one that is largely based currently on generics.
Pharma is not averse to “doing the right thing” and supplying cost-plus medicines to needy nations (or allowing companies with a cheaper cost base to do the same). But it is clearly not keen to promote the erosion of its own future markets.
The Occam’s razor solution to the impasse that MSF has identified might simply be to reflect the pharmaceutical potential of India, China, and Brazil by excluding them from the broad-brush grouping of middle-income economies.
In the interests of transparency, it might be smart of the pharmaceutical companies to be explicit about their reasoning.
And it would be smart of NGOs such as MSF not to allow principled concerns based on crude economic classifications to obstruct the passage of cheap AIDS drugs to the world’s poor.