An Unequal Calculus of Life and Death

Petricciani did have a suggestion. Industry was prepared to lobby governments and donors, he said, to buy more AIDS drugs at market prices.

Kathryn Pattishall, chief of anti-infective drugs for Burroughs Wellcome, argued that her company's AZT could not be used safely in the developing world. It required clinical and laboratory support--platelet counts, even CAT scans--that did not exist in most of Africa. Stephen Carter, a senior vice president of Bristol-Myers Squibb, said the same conditions would apply to his company's soon-to-be-approved AIDS drug, didanosine or ddI. He doubted, he said, that "resources should be devoted" to AIDS drugs in poor countries "in view of the competing demands of other health problems."

Previous drug subsidies for Africa, Merck Vice President John Zabriskie told the Geneva group, had involved therapies that were brief, simple and curative. AIDS drugs were none of those, he said, and "pharmaceutical companies would not enter similar collaborative schemes."

"I think we all agreed on that," Zabriskie said in a recent telephone interview from Boston, where he has retired after taking the helm of Upjohn and merging it with Pharmacia in 1995. "I sort of lost touch with the whole effort afterward."

So, in fact, did all the senior executives. Low-level working groups met sporadically for the next two years, but they had to content themselves with broad exhortations.

Only gingerly, and seldom, did the conferees speak directly of drug costs. The pharmaceutical companies insisted that price had no relationship to the problem of access because so many other barriers existed in Africa's social, political and medical systems. The U.N. negotiators in Geneva decided they would get nowhere by debating economics with their corporate interlocutors.

Yet price, and market fundamentals, were at the heart of the industry's concern. According to IMS Health, which supplies market data to the industry, four-fifths of all pharmaceutical revenue--and a still higher fraction of profits--comes from just seven countries in North America, Europe and Japan. The whole continent of Africa accounts for 1 percent.

Michael Scholtz, a German national who came to work for the WHO after 21 years as a manager at Ciba-Geigy and SmithKline Beecham, said there are two ways of looking at that information. On the one hand, lost profits from a price cut in Africa would amount to no more than "three days' fluctuation of exchange rates." But "if cheaper drugs in Africa put downward pressure on the global price, then the core markets of the pharmaceutical industry are at risk." That pressure, he said, could come from reexport of cheaper medicines from poor to rich countries, or from a political backlash if the discounts drew attention to the high profit margins in developed countries.

That was and is the central dilemma. Drug manufacturers could afford to sell AIDS drugs in Africa at virtually any discount. The companies said they did not do so because Africa lacked the requisite infrastructure. But they had a strategic reason, too: Fear of killing the golden goose in the United States, Canada, Germany, France, Britain, Italy and Japan.

Confidential minutes of a meeting by the U.N.-industry panel, distributed on July 30, 1992, illustrate the industry's sensitivity. Company negotiators objected, in a draft statement of principles, to "the term 'affordability' and the related concepts of 'reasonable prices,' 'commercially favorable terms,' and 'special prices.' "

With the talks stymied, frustration built in Geneva. Christine Norton, a Jamaican technical officer, complained in an internal memo that senior executives were no longer bothering to attend the meetings. Perhaps, she suggested, the WHO could lure them back with upgraded amenities.

"Since these high-level company representatives are accustomed to 'red-carpet treatment,' within limits we ought to . . . [find] appropriate 'impressive' locations," she wrote. "The cocktail party should not be held in the WHO restaurant but maybe at 'Le Chateau de Penthes.' "