An Unequal Calculus of Life and Death

AIDS medicines, she wrote, might be brought within financial reach with "tiered pricing," a formal discount structure already used with vaccines. Developing countries could further boost their buying power by pooling purchases and tapping donor-subsidized treatment funds. Clinical trials would suggest priority populations for early treatment--perhaps men of peak sexual age, or prostitutes, or patients testing positive for the virus before they developed symptoms.

Heymann knew she was leaving many gaps, and noted that it had taken years for global health officials to work through comparable questions about other new medicines. "Planning should begin now," Heymann urged. "The opportunity cost of waiting . . . is high and will be paid for in human lives." If early planning reduced by even four years the lag between AIDS drug development and wide distribution, she wrote, "two and a half million lives would be saved."

As it turned out, that was almost precisely the number of Africans--2.4 million, according to a U.N. estimate made public Nov. 28--who will die of AIDS this year alone.

'You Just Can't Do This'

While the drug industry called for treatment of the poor to be "borne by society," most governments disclaimed the task.

In Africa through the 1990s, with notable exceptions in Senegal and Uganda, nearly all the ruling powers denied they had a problem with AIDS. In any event, they had no resources. In a 1993 report, "Investing in Health," the World Bank described per capita spending of $ 8 a year as the barest minimum for health care in poor countries. That would have quadrupled the health budgets on much of the continent.

The only plausible financing sources outside of industry were donors and lenders of foreign aid, and they too ruled it out. The opposition arose not from doubt about the pandemic's severity, but rather from certainty. At the U.S. Agency for International Development and its counterparts overseas, the legions of the dying in Africa loomed as a limitless demand on scarce resources.

No one put that case more succinctly in the early debate than a medical prodigy named Jeffrey R. Harris. Harris entered the University of Texas at 16, raced through its medical school by 22 and worked in epidemiology at the Centers for Disease Control before arriving at USAID. In July 1986, at the age of 30, he became the U.S. government's senior manager of AIDS assistance overseas. It was a part-time job.

By several accounts, Harris saw earlier than most that AIDS in Africa would be a catastrophe. His response was to channel all funds into containing the disease, not treating its victims.

"Our experience, and I think the experience, is that treatment always drives out prevention," Harris, now back at the CDC, said in an interview. "We were afraid that if we opened the door on treatment at all, then all of our money would be drawn away. You get into paying for commodities that have to be supplied, supplied, supplied, to the end of time."

Prevention undoubtedly cost less. A day's supply of AIDS drugs would buy a lot of condoms. Condoms usually stopped sexual transmission of the virus; even the best medicines did not cure it.

All this presumed there had to be a choice. The economic arguments on AIDS treatment began with two premises: that drug prices would stay high, and that AIDS assistance budgets in the wealthy countries would stay low.

U.S. foreign aid managers and the World Bank measured the cost-effectiveness of AIDS treatment using different yardsticks. Sometimes they compared AIDS treatment with cheaper ways of saving lives, such as antibiotics for simple infections. The bank, in what it now describes as "a 'classic' study," urged in 1992 that Tanzania fund "only palliative treatment of opportunistic illnesses," not antiretroviral drugs. Even then, the study warned against "diverting resources from that which could save lives" for spending "on treatment of the terminally ill."

Jonathan Quick of WHO's essential medicines program commissioned a chart in 1997 that sought to illustrate the same point. For every $ 10,000 spent, he asked, how many lives could be saved from a sampling of killer diseases? Economists produced a bar graph depicting 9,900 dehydrated children at the top, hundreds of pneumonia and tuberculosis patients in the middle, and one solitary AIDS victim at the bottom.

Other arguments measured the impact of AIDS treatment on national wealth. Dean Jamison of the World Bank introduced the concept of a "disability-adjusted life year," or DALY, to measure the number of productive years lost to illness or death. By his calculus, for example, a country that spent $ 1,000 a year to save the life of someone earning $ 500 a year would suffer a net economic loss.

On a continent where nearly half the population lives on a dollar a day, the implications for AIDS patients were grim.

In Geneva, cost-effectiveness pervaded the views of the man Nakajima had installed to run the global AIDS program. Michael Merson made his name in public health with the cheapest of technologies, a foil envelope of salts. The program he oversaw delivered single-use packages, measured and ready to mix with water, that rehydrated children dying of diarrheal disease. The life-saving drink required no special training, had a commodity cost of about 15 cents a child, and it worked.

Many observers of Merson's tenure as chief of WHO's global program on AIDS said he was looking for an equally tidy intervention. Lacking that, Merson showed much more interest in stopping the spread of AIDS than in treating it.

"My feeling was we had to really focus in that critical period on prevention," Merson said in a recent interview.

Still, he said, an early visit to Uganda seared itself into his memory. He touched down in Kampala on Sept. 2, 1990, for talks with the government. Noerine Kaleeba, a local pioneer in AIDS community care, talked him into an impromptu call on her clinic. Merson was stunned at the sight of stick-figure patients dying on floors, unable to swallow because of fungal infections, unmedicated for their pain and "begging, begging for help."

The "awakening" Merson described afterward came on more than one level. Certainly it wrenched his conscience to see such suffering. But the patients and their families also taught him that they did not want to hear educational messages from outsiders who offered nothing for the sick.

In Washington, Harris began to hear the same thing. John David Dupree, one of his contractors, "kept coming back from Malawi saying, 'You just can't do this. You can't continue to talk about prevention without dealing with people's immediate needs.' "

Reluctantly, Harris concluded that his agency was losing legitimacy in the populations most concerned about AIDS. Harris and Kenneth Bart of USAID, with their superior Bruce Langmaid, decided to allow some U.S. funds to pay for palliative care. Their reasons were mainly tactical.

"We were trying to shoot for a very low proportion" of money spent on treatment, Harris said, "like 90-to-10 percent, because our goal was to focus on legitimacy for our prevention efforts."

Risky Business

In 1995, Glaxo bought Burroughs Wellcome and became the presumptive leader in AIDS therapy. But first, the company had to decide if it wanted the business.

Glaxo's first AIDS drug, Epivir, was about to be approved. It joined a new class of medicines that stopped a vital enzyme in the AIDS virus, reverse transcriptase, from copying itself. Wellcome's older drug, AZT, now sold for less than half its initial price but hung on to a market valued at $ 315 million per year. Combined, the drugs would make for the first approved "dual therapy" against the AIDS virus. And none too soon: An authoritative study in 1994 showed that single-drug treatment did not work indefinitely.

Even so, until shortly before the merger, Glaxo's management gave serious thought to abandoning the AIDS market. AZT's debut had been a trauma, with hostile congressional hearings and one outrageous protest after another from activists who more than once stopped trade on the New York Stock Exchange. Protesters were calling the company the "Evil Empire."

Goran Ando, who headed Glaxo's research and development team, "was saying, 'What the hell are we getting into this for?' " recalled Peter Young, a Glaxo manager who left in 1999. Glaxo Wellcome, he said, was debating, " 'Do we want to be in this disease?' You have to be a glutton for punishment in terms of political visibility and even abuse."

The company's clinical products division argued for keeping the AIDS drugs, and eventually prevailed. Glaxo embraced the two-drug therapy, eventually marketed the combination as Combivir and poured new funds into AIDS research.

At the same time, the poisonous turf battles among U.N. agencies had unraveled the WHO program, and sponsoring governments created a new Joint United Nations Program on AIDS, or UNAIDS. Jos Perriens, the new organization's team leader for drug research, wanted to know more about the new combination therapies and the prospects of making them widely available. He needed an opening to a major company, and he found it on Nov. 10, 1995.

Glaxo Wellcome had scheduled a meeting of its scientific advisory board in the Thai resort town of Phuket. Perriens had a friend on the board, Joep Lange, co-founder of an Amsterdam-based AIDS research center. Lange invited Perriens to Thailand in hopes of introducing him to someone from Glaxo.

The opportunity came at dinner at the Meridien Hotel. Lange and David A. Cooper, a leading Australian virologist, invited Perriens to join their table with Peter Young. Young had recently become Glaxo's vice president for AIDS and opportunistic infection therapeutics.

Talk turned "very quickly to, 'Can we get antiretrovirals to developing countries?' " Perriens said. "Peter said the price problem should not be impossible to solve. He had obviously already been considering differential prices within his company."

Young, in fact, saw a double opportunity: to boost sales volume and to place Glaxo in the refreshing role of advancing public health for the poor. "If you've got a medical intervention that works, and people can't get it, you can't just shut that issue away and say, 'I'm sorry, it's not my problem,' " Young said in an interview.

Behind closed doors in the advisory board meeting the next day, Young began to air his thinking. "From a commercial perspective," he said, according to the board's confidential record, "if we are able to treat hugely increased numbers of patients in this part of the world, the pricing that we would expect to realize must be different to what is currently used."

Anticipating objections that cheaper drugs in one country would be diverted into higher-priced markets in another, Young added: "If on the fringes there is some parallel trade, I'm sure we'll complain, but in the scheme of things it will be a small percentage of the total."

Young told colleagues he expected "a conservative reaction from [higher] management" to his ideas. With reason. Young was proposing to risk his industry's proven business model: low-volume, high-margin sales in the wealthiest countries.

'TRIPS' and Triple Therapy

At about the same time as Young made his proposal, two forces collided: rapid movement toward an integrated global economy, and a radically more effective generation of AIDS treatments. The effect was to spread awareness of new medical miracles to places that had no hope of sharing the benefits.

The collision came over drug patents. In industrialized countries, patents established a social contract: Invest the time and money to develop a valuable medicine, and society grants monopoly pricing power for 20 years.

Beginning in 1993, at the urging of the drug industry, the Clinton administration pressed to extend patent protections worldwide. When a new legal entity, the World Trade Organization, was born on Jan. 1, 1995, its rules included a new agreement on Trade Related Aspects of Intellectual Property Rights, commonly cited as TRIPS.

In short, any country that wanted to take part in the global economy had to respect the exclusive marketing rights of patent holders. Some 125 countries joined the WTO immediately and another dozen have joined since, with deadlines for patent compliance ranging from this year to 2006.

It did not take long for the poor countries to conclude that the social contract on drug patents did not work as well for them. New drugs were indeed developed, but they did not reach most of those who needed them. And, with untested exceptions, the trade rules now forbade developing countries to make or buy unlicensed generics--as South Africa, Brazil and Thailand began pressing to do.

Advanced trials were now underway on a new class of AIDS drugs. These drugs blocked an enzyme, called protease, that the AIDS virus requires in the late stages of reproduction. By late 1995, unpublished results--passed by word of mouth among researchers--found that "triple therapy," involving two older drugs and a protease inhibitor, reduced the effects of the virus to undetectable levels.

Dec. 7, 1995, brought FDA approval of the first such drug, saquinavir, sold by Roche under the brand name of Invirase. Two more, from Merck and Abbott Laboratories, reached market three months later. "This is some of the most hopeful news in years for people living with AIDS," Health and Human Services Secretary Donna E. Shalala said then.

And it was. But not for most of them.

The cost of the standard AIDS therapy, eight years after the debut of AZT, still began at $ 10,000 a year. It ranged as high as $ 18,000. But one thing had changed. Now the therapy was not a question mark. It worked, perhaps indefinitely, and kept most of those who used it alive.

Among Infants, 'Bitter Deaths'

Health authorities were soon absorbing the implications of another clinical landmark: A brief course of an older AIDS medicine prevented infection of newborn babies.

Once again it was AZT and Glaxo Wellcome in the spotlight. A study known as ACTG 076, after a consortium known as the AIDS Clinical Trial Group, showed that the drug, administered during pregnancy and to the newborn infant, cut transmission from mother to child by two-thirds.

Glaxo was determined to avoid a reprise of Wellcome's battering a decade earlier, especially with infants as the casualties. Eventually that anxiety gave Peter Young an opening for his discounting proposal, a year after broaching it in Thailand.

In Singapore on Jan. 15, 1997, Young pitched "flexible pricing" of AIDS drugs to the Glaxo Wellcome chairman, Richard Sykes, and his executive committee. The committee agreed to give managers of Glaxo's regional operating companies discretion to cut prices in order to boost volume. It added a confidential proviso that the two-drug package sold as Combivir would not be priced under $ 2 per daily dose, with lower floors for sales of the component drugs, AZT and Epivir.

"GW gross margins are still sufficiently positive at these levels to support reasonable incremental programme costs and remain profitable," an internal analysis concluded. "We will make no public disclosure on programme profitability."

Glaxo's headquarters in Middlesex, England, transmitted the decision to regional managers. And then--nothing happened, for more than a year.

Under Glaxo's management system, headquarters staff members could not order regional or country managers to lower prices. Those managers were held accountable for profit growth, and few of them believed they could increase sales enough to make up for price cuts.

"Many of them had a relatively jaundiced view, that if they drop a price there's no guarantee that the [host] government is going to step in and make that up in volume," Young said.

As country managers balked, pressure built sharply on Glaxo. A widely noted editorial in the New England Journal of Medicine on Sept. 27, 1997, blamed unethical researchers for "the deaths of hundreds of newborns" because of drug trials that still used placebos. The failure in developing countries to prevent infant infections using AZT resulted only from "an economically determined policy of governments that cannot afford the prices set by drug companies."

Health ministers in Geneva coined the term " 'bitter' deaths" to describe infant losses "which mothers know can be avoided today with available technology." On Jan. 27, 1998, the executive board of the World Health Assembly endorsed a Revised Drug Strategy giving primacy to public health over commercial interests. Hard on its heels came a U.N. paper on "Globalization and Access to Drugs," which declared drug patents in conflict with the human right to equal health care.

The growing attacks required an answer. "There's absolutely no doubt that concerns about our intellectual property helped force the issue onto Sir Richard's agenda," said one Glaxo employee who followed the chairman's thinking.

In March of 1998, Glaxo forced the hands of its operating companies by exposing their new authority in public. A press release from headquarters announced that Glaxo would offer AIDS drugs in developing countries at prices "substantially below Western market levels." Young sent a memo to startled regional directors, saying the sudden announcement had been required by "the risk that we would be seen to respond to pressure rather than undertake a positive self-motivated step."

The genie was out of the bottle. The British Department for International Development described mother-to-child transmission in an internal memorandum as "the ethical lightning [rod] of international discussion on drugs access."

Once pregnant women got the medicine, they were bound to ask why only their children should be saved. And if women, why not men? The British memo predicted that "greater access to [antiretroviral therapy] for HIV-positive women" would accelerate political demands "for treatment in wider populations."

People were dying. The drugs existed to save them. And now they knew it.

Staff researcher Robert Thomason contributed to this report.

About This Series

In a series of articles this year, The Post is examining the decisions--and missed opportunities--by international organizations, countries, corporations and individuals that have shaped the advance of AIDS across Africa, the continent most affected by the disease. Three articles this week tell the story of how global pharmaceutical companies responded to the crisis, including a battle over the prices of AIDS medicines and a recent rush to philanthropy. Other articles in this series, as well as supporting documentation, links and live discussions with the authors, are available online at www.washingtonpost.com.(This graphic was not available) Living With HIV.