A Turning Point That Left Millions Behind

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By Barton Gellman
Washington Post Staff Writer
Thursday, December 28, 2000

GENEVA -- Raymond V. Gilmartin's private jet touched down at Geneva-Cointrin airport near midnight on March 26. Early next morning, on four hours' sleep, he sped to the hilltop headquarters of the World Health Organization. His name appeared on no calendar, but he was expected. He carried the brief of a $ 350 billion industry on the run.

Two years of public censure, with charges of profiteering on history's worst pandemic, had brought the manufacturers of AIDS medicines close to pariah status in U.N. forums. Declarations known as "soft law" threatened the value of their patents. Their reputations as health-givers had suffered as 35 million people with HIV--25 million in Africa--faced death without the drugs that could prolong their lives.

Merck, the New Jersey drug giant for which Gilmartin was chairman and chief executive, had begun to compare the stakes with those faced by infant formula makers accused of promoting breast milk substitutes in countries where they did more harm than good. "No matter what Nestle could do or say, they never really managed to get over that slogan that they killed babies," one manager said.

Gilmartin had come to WHO Conference Room 7079 to reveal an industry secret. Facing Director General Gro Harlem Brundtland and a panoramic Alpine view, he said that five major pharmaceutical companies had committed in principle to substantial discounts on their AIDS medicines in poor countries. The conditions of their offer, broadly drafted, included burden-sharing by governments and reinforced protection of the industry's patents.

Now Gilmartin wanted to know: Would Brundtland care to sponsor the initiative and take a leading role in its announcement?

Brundtland and her colleagues in the U.N. system and at the World Bank confronted a dilemma that would shadow them during six weeks of intense, confidential talks. The companies made clear they intended to go public with the offer before the WHO's World Health Assembly on May 15. The U.N. agencies could not afford to spurn a proposal that appeared to be a historic advance against AIDS. And yet they were loath to endorse an industry plan whose design and essential details were beyond their control.

When a deal was finally announced on May 11, it was heralded worldwide as a triumph for both sides, and a turning point in the world's response to the poorest AIDS sufferers. But behind the agreement was another story.

Interviews with most of the participants, together with documents obtained by The Washington Post, show that from the start, the potential partners--five companies and five international agencies--were riven by doubts and disputes. Each side tried in some measure to subvert the other's goals. The agencies had an unspoken aim to drive prices of patented AIDS drugs down to the level of generics, and to make those prices available as widely as possible. The drug firms sought to maintain prices in most markets by offering selective discounts that would remain under their control. In the long term, the structure of their offer primed new markets by building demand while limiting the duration and scope of the discounts.

Most of all, the drug companies wanted to squelch an increasingly damaging debate on prices and patents that the U.N. agencies had helped touch off.

"The price issue was always discussed as preventing people from being treated," said Boehringer Vice Chairman Rolf Krebs. "We took the price away."

While the deal has quieted that debate, it has not abolished the primacy of price in determining who gets the drugs. In the eight months since the agreement, only one of the five companies, Glaxo Wellcome, has been willing to disclose its AIDS medicine discounts. On the whole, the companies are negotiating variable prices in strict confidence--drug by drug, firm by firm, country by country. More important, perhaps, neither the companies nor their partners--local governments, international donors and agencies--have committed in practical terms to bring treatment to significant numbers of the dying.

The only consummated arrangement thus far is in Senegal, though Uganda is close behind. Ibra Ndoye, Senegal's AIDS coordinator, said the discounts will enable his country to offer an unspecified "range of therapeutic choices . . . at access costs ranging from about $ 1,000 to $ 1,800 a year," down from the $ 10,000 or more at previous market prices.


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© 2000 The Washington Post Company

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