|  | Healthcare Industry | Healthcare Management

Pharmaceutical Companies & AIDS

The first known case of AIDS was in 1981, and since then Avert, an AIDS education site, estimates that 25 million people have died of the disease. Thanks to innovations by pharmaceutical companies, the death toll in the U.S. has actually decreased every year since 1996, according to HIV Plug magazine. However, the death toll around the world continues to increase every year, largely due to poverty and the high prices of AIDS drugs.

  1. First AIDS Drug

    • In 1987, the Food and Drug Administration (FDA) approved a drug called AZT, and it became the first antiretroviral drug to be used as a treatment for AIDS. It proved to be quite effective in curbing the symptoms of AIDS and prolonging the lives of the afflicted. This drug rather immediately created backlash from consumers, who protested the high price tag of about $7,000. In response to protests, the company eventually lowered the price by about 20 percent, according to Avert.

    Cocktail Therapy

    • In 1996, what is known as the triple-combination cocktail therapy, the combining of three drugs to combat HIV, proved to be extremely effective in lowering HIV in the bloodstream. A severe drop in AIDS deaths in the U.S. followed. This is also called highly active antiretroviral therapy (HAART). Because of the effectiveness of this treatment, pharmaceutical companies began developing and selling HAART therapies regularly on the market.

    The Generic Battle

    • Soon, HAART therapy proved so effective, that companies worldwide began producing generic, much less expensive versions of the drug. This drew ire from the Pharmaceutical Research and Manufacturers of America, who argued that cheap generic drugs were destroying their profits and, therefore, dis-incentivizing future drug innovations. Drug development is a financially risky investment, and companies rely upon high profit margins to recoup their investments.

    WTO

    • The tension between generic producers and pharmaceutical research companies culminated in a controversial decision by the World Trade Organization to uphold international patent laws preventing companies in developing countries like India and South Africa from producing generic HAART drugs.

      These countries were given time to phase out the generics, which were already on the market at the time. This decision angered many activists, who felt that the greed of pharmaceutical companies was causing deaths in poor countries. They point to the fact that the global trend in AIDS deaths has been upward every year.

    Negotiations

    • Pharmaceutical companies faced pressure to lower prices in poor countries in the early 2000s, according to Avert. Five pharmaceutical companies lowered prices of AIDS drugs for regions severely affected by AIDS. President Clinton allowed poor countries in Africa to ignore patent laws and import the generic drugs.

      Since 2005, countries that are members of the WTO now have to comply with patent laws. Pharmaceutical companies, in turn, have agreed to charge prices that correspond more directly with per capita income in a given country and to allow generic importation into countries facing health epidemics.

Healthcare Management - Related Articles