US drug offer criticised

The United States Export-Import Bank (Ex-Im Bank) has launched an initiative to make available an estimated US $1 billion in loans annually to sub-Saharan Africa to help countries in the region buy anti-AIDS drugs. The bank’s chairman, James Harmon, announced the initiative on Wednesday in Washington at a joint press conference with Jeffrey Sturchio, public affairs director for the US pharmaceutical company Merck. Under the scheme, African countries would be offered loans at prevailing market rates of about seven percent plus fees, and will be given about five years to repay the loan, rather than the six months which is currently offered. But one of the conditions of the loan will be that countries only purchase AIDS drugs that are manufactured by American companies. “Under this programme, major US drug companies will offer their products at a deep discount and the Ex-Im Bank will finance their export with five-year loans, minimising the overall costs of medicines to the region,” Harmon said. He added that the programme will run as long as it was deemed necessary. “By building up the capital infrastructure, we are making sure that a lack of credit financing is not yet another impediment in Africa’s war on HIV and AIDS,” he said. But the Ex-Im bank’s offer has come in for criticism by some AIDS activists that want equal access to HIV/AIDS drugs. One South African-based campaigner told IRIN: “Already countries in sub-Saharan Africa can’t provide the basics in health care let alone AIDS drugs because of their heavy debt burdens and the huge amounts of money that is spent on servicing their debt each year.” He added: “It makes one wonder if this is coming from the bank to help ease the HIV/AIDS burden in Africa or is it the drug companies protecting themselves?” An editorial in ‘The New York Times’ on Thursday said that officials in the US administration were divided over the initiative. It said that the US $1 billion loan could be used by the pharmaceutical multinationals to fend off a growing campaign for the provision of cheaper generic AIDS drugs to the developing world. “Even with heavy discounts of up to 80 or 90 percent ... some drug companies may still hope to sell their product profitably in Africa,” the editorial noted. At a 90 percent discount, a typical cocktail of anti-AIDS drugs would still cost an estimated US $2,000 annually for one patient. This is more than four times the average per capita income in Africa. A recent report by the medical humanitarian agency Medecins Sans Frontieres (MSF) said that through the local manufacture of generics, the cost of HIV/AIDS combination therapy could fall to $200 per person per year. International drug companies have maintained that generic drugs are a violation of their intellectual property rights. “It seems unlikely that Brazil, India or other nations that produce such drugs for home consumption would have the export financing available to help African nations buy the goods,” ‘The New York Times’ editorial said. Through the use of generic drugs, Brazil has provided combination anti-HIV treatments to over 90,000 people, and seen a more than 50 percent drop in the AIDS death rate. An estimated US $472 million was saved in health care costs from 1997 to 1999. In an open letter to US President Bill Clinton, the Health Gap Coalition - an International coalition of AIDS advocacy and activist organisations - said on Thursday that linking US financing to the purchase of US or Western brand-name drugs appeared to be an attempt to pre-empt efforts by African and other developing nations to lower prices through compulsory licensing and parallel importing of generic AIDS drugs.