AIDS activists say other companies must match U.S. pledges

NEW YORK (CNN) -- Two drug makers' plans to sell cheap anti-AIDS drugs in South Africa must be backed by other companies in order to have an impact, health activists say.

Two of the largest drug companies, Merck & Co. and Bristol-Myers Squibb, announced Wednesday they would sell their anti-AIDS drugs in South Africa at or below cost.

Bristol-Myers is also giving local companies the green light to override patent laws and make generic versions of one of its drugs -- an unprecedented step.

The companies faced extensive public and political pressure to cut the cost of their anti-AIDS drugs to countries like South Africa that have been ravaged by the syndrome. AIDS activists who had led months of demonstrations from South Africa to New York City claimed victory with the announcement, but many say the win may be largely symbolic without other efforts.

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"Lowering drug prices is crucial, but it's one piece of a larger solution that we need ... we must have a massive mobilization of resources," said Ronald Johnson, a spokesman for Gay Men's Health Crisis. "The G-7, the lending institutions, will have to step up to the plate if we are going to make drug access a reality throughout the world."

The Treatment Action Campaign, South Africa's largest and most vocal AIDS pressure group, says the manufacturers' concessions don't go far enough. Other drug companies must also yield their patent rights, because the anti-retroviral drug is of little use unless taken in combination with others that still are too expensive for people in most developing countries.

Even with the drug companies' agreement, the drugs still may cost too much for too many in a country where the average income is around $500 a year. And because there's no real distribution system, activists admit the drugs will be hard to get -- a point Bristol-Myers made in its announcement Wednesday.

"We intend to do our part, but all agree that drugs alone will not solve the problem," the company said in a written statement. "Massive expenditures to address health care infrastructure needs are critical."

The agreement allows the government to import cheap versions of the anti-retroviral drug Zerit, or even manufacture it locally. South Africa hailed the decision, and U.S. analysts said it should have little immediate impact on the companies' bottom line.

"They're not going to make anything, but neither will they lose anything because they're not selling in those countries anyway," said Jami Rubin, managing director of the brokerage house Morgan Stanley. "So it's a good public deed on their part, which is why I think most of this is public relations."

The deal applies only to South Africa, where about 4.5 million people are HIV-positive. But producing cheaper drugs could have serious implications in the United States, which has few price controls. If anti-AIDS drugs can be made for a fraction of what they cost now, drug companies will be under fire to lower prices in what has all along been a lucrative market.

Activists have questioned whether drug companies are serious about fighting AIDS in developing countries. Despite this week's decision, Merck and Bristol-Myers remain part of a 40-drug-company lawsuit against the South African government, which wants to do away with patents on all drugs. The drug companies say they can't afford to do that because the South African law isn't limited to anti-AIDS drugs, and they can't afford to surrender the entire African market.

AIDS activists say the lawsuit has backfired on the drugmakers by generating global outrage that has pressured them into further reducing drug prices.

"These countries should be able to do what is their legal right, to provide treatment without the American government and drug companies dictating the terms and conditions in which they get these drugs," said Mark Milano, a spokesman for the protest group ACT-UP.

Other African countries facing the same problem of inadequate budgets to deal with the AIDS epidemic are watching the court case closely.

CNN Correspondents Deborah Feyerick and Cynde Strand contributed to this report.

South Africa in AIDS drug fight
March 9, 2001

Merck & Company
Bristol-Myers Squibb Company

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