Red Cross slams drug firms over pricing policies

The International Red Cross said on Monday humanitarian needs should prevail over commercial concerns to ensure life-saving drugs are available in developing countries.

The global relief organisation’s stand raises the pressure on 39 drug companies battling the South African government over its right to import or produce its own generic AIDS drugs.

“The current system of allocating resources for research and development and of pricing life-saving drugs needs to change because it leaves out at least 30 million people who are dying from infectious diseases every year,” said Alvaro Bermejo, health director of the International Federation of Red Cross and Red Crescent Societies.

The drug giants are challenging South Africa over legislation that would allow it to import generic AIDS drugs at a fraction of the price they usually charge. They say their patent rights are protected by South African law.

The landmark case was postponed last week until April to allow South African activists to prepare testimony about the human tragedy of the disease, which has infected an estimated 25.3 million people in sub-Saharan Africa. Drug companies believe they are already doing their bit by offering cut-price drugs to African countries under a deal brokered by UNAIDS, the United Nations AIDS agency.

Four countries have signed up for the scheme, but for most African countries even the discount prices are too high. Kenya is also introducing legislation to import generic AIDS drugs. Although it initially supported the UNAIDS scheme, Bermejo revealed in a telephone interview that the Geneva-based Red Cross is frustrated by the slow progress and lack of commitment.

“What we are seeing today is a piecemeal approach between a number of governments and pharmaceutical companies brokered by UNAIDS. This is a first step, but not enough. It certainly should not be seen as the way forward,” he said, adding that the Red Cross supports the South African move.

Ivory Coast is the latest African country to strike a deal for cheap drugs. Under an agreement signed on Saturday, GlaxoSmithKline and Bristol Myers Squibb have agreed to cut prices of anti-retroviral drugs by 80% 90%. Ivory Coast will also benefit from extra price cuts on two HIV/AIDS drugs announced by Merck and Co last week.

Industry analysts say the drug companies are caught between a rock and a hard place – trying to defend patents and ward off generic competition, while assuaging public concern about inadequate access to life-saving medicines.

“Drug companies are under pressure to either dramatically lower their drug prices to poor African countries or else face an enforced licensing to generic players,” said Franc Gregori of investment bank BNP Paribas. The situation could lead to a wholesale questioning of the high prices paid by Western countries, he said.

The International Federation of Pharmaceutical Manufacturers Associations defended the industry, saying it is making strong efforts to improve access to medicines.