COHA REPORT on AIDS in Latin America:Friday, March 10, 2006

Friday, March 10, 2006

AIDS Crisis in Latin America Compounded by Bush Administration’s Catering to U.S. Drug Multinationals, which Demonstrably are Far More Concerned with the “Bottom Line” than the Deaths of Tens of Thousands of AIDS Victims

The following is an executive summary of the AIDS in Latin America Report. For the complete report, please scroll down.

Faced with the looming threat of a merciless humanitarian crisis, Latin American governments must hack through an entangled web of patent laws, corporate loopholes, and misguided U.S. initiatives, before they can even begin to deliver life-saving drugs to a mounting number of AIDS victims in their countries. In the shadow of the more-publicized African crisis, the AIDS epidemic in Latin America has slowly infected the most vulnerable, poverty-stricken stratums of society, exacerbating the plight of an already economically handicapped region.

In 2005 alone, 1.8 million Latin Americans were newly infected by the disease, which claimed the lives of 200,000 victims that same year. In the Caribbean, where the AIDS epidemic ranks second only to that of Sub-Saharan Africa, AIDS claimed an estimated 24,000 victims in 2005, making the disease the leading cause of death among adults in the region, ages 15 to 44. As the relationship between AIDS and poverty is bidirectional, these alarming statistics attest to an ominous trend. Immediate action must be taken before the epidemic further devastates the fundamental fabric of Latin American societies.

As underdevelopment and debt tie the hands of Latin American governments, global neglect has further prevented a strong response to the region’s growing crisis. Meanwhile, through the White House’s good offices, pharmaceutical companies have been able to form de facto alliances within the World Trade Organization and the Food and Drug Administration with ease, while an aggressive public relations campaign is meant to drive home the thesis that pharmaceutical companies are being good world citizens by restraining obscenely high drug prices.

Confronted by an onslaught of increasing international pressure, some drug companies have taken piecemeal steps toward negotiating reduced prices with their leitmotif seemingly being let charity be more apparent than real. When reduced prices actually resulted from negotiations, the prices still often soared above those of generic competitors, and remained far out of reach for the average of 40% of Latin Americans living below the poverty line. In addition, in 2003, a year after the U.S. blocked a major 143-country agreement that would have allowed the world’s poorest countries to purchase discounted pharmaceuticals, the WTO added the ‘paragraph six’ waiver to the controversial Trade-Related Aspects of International Property Rights (TRIPS), which institutionalizes twenty-year patents on vital AIDS drugs. While the waiver was supposed to allow crisis-ridden countries that cannot manufacture drugs domestically, to import cheap alternatives, no country has yet been able to attain a license to import such reduced-price drugs due to the hopeless rigidity and complexity of the legislation. Such gnawing practical problems have led NGOs to call the arrangement “the present wrapped in red tape.”

Working for the Pharmaceutical Companies

As anticipated, CAFTA already is turning out to be a highly pliable mechanism for U.S. corporate interests, as demonstrated by the ever-increasing demands that the U.S. is imposing on Central American members in the ongoing trade bloc negotiations. U.S. Trade Representative Rob Portman is attempting to push beyond the terms of previous intellectual property agreements to further extend the life of pharmaceutical patents, and it appears that he is succeeding. Guatemala, for example, has already agreed to repeal a law aimed at guaranteeing local access to crucial generic drugs, despite the social unrest that the issue has incited throughout the country.

In addition, while Bush’s highly-criticized President’s Emergency Plan for AIDS Relief (PEPFAR) allocates approximately 50% of the plan’s budget to invest in antiretroviral drugs, it does so in the least effective manner. Under the leadership of Randall Tobias, former CEO and major stockholder of drug giant Eli Lilly, it should come as no surprise that Bush’s AIDS initiative purchases the majority of its drugs from high-priced pharmaceutical companies, instead of turning to significantly cheaper generic alternatives. The decision not to utilize generic drugs, which cost a fraction of the price, and could allow for much broader distribution, indicates a truly ill-conceived strategy, if the public good is meant to be the program’s top priority. Furthermore, the FDA has played a role in delaying the release of generic drugs that could be used for the initiative, by taking as long as eight months to approve drugs that potentially could have gained a positive nod within six weeks. PEPFAR also funds Bush-favored faith-based groups equipped with little or no health know how and espousing an often ill-suited abstinence and fidelity approach, thus siphoning financial resources from the urgently needed medical tactics in favor of a diamond-in-the-sky strategy.

Adding salt to the wound, the White House has further compromised the ability of Latin American governments to cope with the AIDS crises by recently cutting overall development aid to the region by 28.5%, making 2007 the third consecutive year that significant aid was slashed and relocated to regions of greater “strategic” importance.

Despite growing concern over the issue, few changes have occurred on the AIDS drug scene, and Latin American nations basically have been left alone to navigate a tortuous system dominated by profit-motivated corporate influence and White House diktats. Furthermore, without a renewed international commitment to addressing the fundamental issues of human well-being and poverty, little hope remains for eradicating a disease that finds most of its victims among the ranks of the already suffering and deprived.


Complete Report on AIDS in Latin America

Between February 5 and 8, some of the world’s most talented scientists and clinicians gathered in Denver at the 13th Conference on Retroviruses and Opportunistic Infections (CROI) to share and critique the results of this year’s breakthroughs in AIDS research. Sponsored by pharmaceutical giants such as Abbott, Boehringer Ingelheim, and GlaxoSmithKline, the purported goal of the conference was to convert clinical and laboratory research to practical ammunition in the fight against the AIDS epidemic. While the disease’s scope was originally limited to small pockets within Latin America, AIDS has now become a widespread killer, decimating all sectors of societies already stricken by the straitened living standards that are a ubiquitous feature of the region’s reality. However, before life-saving science can rescue those ravaged by the disease, it must hack through an entangled web of U.S.-backed patent laws, corporate loopholes, and U.S. HIV/AIDS initiatives seemingly more concerned with benefiting pharmaceutical giants than the AIDS victims themselves. The problem is compounded by Washington’s knack to successfully raise more hurdles to coping with the epidemic through trade negotiations, which usually leave the region on the losing side. By blocking widespread access to crucial AIDS medicine by various means, the U.S., in effect, denies Latin America a vital vehicle for alleviating the spread of the disease, and the socioeconomic devastation it intensifies. Thus, once again, governments of these sovereign nations are barred from exercising their most fundamental right: to care for their own people.

The Silent Killer

Shaded over by Africa’s more-publicized crisis, AIDS almost silently has infected Latin America, becoming a top killer amongst society’s poorest and most vulnerable members. By the end of 2005, the United Nations (UN) estimated 1.8 million Latin Americans were newly infected with the disease that claimed the lives of some 200,000 that year. In the Caribbean, where the epidemic ranks second only to Sub-Saharan Africa’s in its tenacity, AIDS killed an estimated 24,000 in 2005, becoming the leading cause of death among adults aged 15 to 44. AIDS further compounds the region’s already overwhelming problems of poverty and underdevelopment, as it often strikes victims in the most productive years of their lives, leaving them unable to contribute to their personal and national economies. Furthermore, AIDS disproportionately strikes poor communities as they not only contain high-risk groups like prostitutes and drug users, but also have less biological resistance, as malnutrition and poor health care have been linked to an increased likelihood of contracting AIDS. “The relationship between poverty and AIDS and AIDS and poverty is bi-directional,” warned a 2002 UNICEF report. “AIDS deepens poverty and increases inequalities at every level… [and] undermines efforts at poverty reduction, income and asset distribution, productivity, and economic growth. AIDS has reversed progress towards international development goals.”

The Drugs Do Work

As AIDS and poverty are inextricably linked, providing drugs at reasonable prices is essential, because, if available, antiretroviral drugs can have a critical impact on underdeveloped communities by improving and extending the lives of those suffering from the disease. Despite its location in the Caribbean, one of the most afflicted regions on the planet, the fact that Cuba has one of the lowest AIDS prevalencies in the world (fewer than 0.2% of adults) has been attributed to the island’s citizens’ nearly universal access to such medicines. Pregnant women in Cuba are systematically tested for HIV, and if found positive, are immediately provided with antiretroviral treatment to stop the spread of the disease to the unborn fetus. Antiretroviral drugs also have shown significant progress in fighting AIDS in Haiti, where one the oldest AIDS epidemics in the world plagues a population already suffering from chronic poverty, political violence, and natural disasters.

According to a recent Cornell study in Haiti, patients who received no drugs had a 30% chance of surviving one year after their diagnosis, while 87% of adults and adolescents and 98% of children who received a three-pill treatment survived. According to Dr. Jean William Pape, who has researched AIDS in Haiti since 1979, patients who had arrived on stretchers, emaciated and immobile a year prior, had left the clinic ready to return to work after receiving antiretroviral treatment, now able to function and contribute to their families and local economies. As Dr. Pape points out, the success of such an experiment in the turmoil-stricken and poorest nation in the hemisphere, demonstrates the treatment could work anywhere. But access to new antiviral pills is necessary, as the most updated versions of them are not only more effective and easier to distribute, but also have lower levels of toxicity, and thus fewer side effects. In addition, the second-line antiretroviral drugs, which are the most heavily patented, are crucial formulas for survival as they are the victim’s last line of defense against the disease after his/her body becomes immune to the effects of the more widely available first-line drugs.

Bound in Red Tape

International trade law upholds the authority of U.S. pharmaceutical giants when they collide with Latin American nations struggling to gain the right to produce or buy desperately needed anti-AIDS drugs at affordable prices, indicating that the death of tens of thousands is relatively easy to absorb as long as executives and stockholders of U.S. drugs companies protect their stock prices and bonuses.

The 1995 World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of International Property Rights (TRIPS) is perhaps the most flagrantly biased WTO initiative, as it institutionalizes twenty-year patents on vital medications. Through TRIPS, countries attempting to export or produce drastically cheaper generic alternatives face the threat of crippling U.S. and WTO sanctions. In 2003, the WTO finally added the ‘paragraph six’ waiver to TRIPS, which was purported to allow crisis-ridden countries unable to produce drugs domestically, to import cheap alternatives. However, the U.S. pushed for so many stipulations and contingencies that the complicated structure of the waiver is all but unworkable. Meanwhile, the previous arrangement also erects hurdles for countries wanting to produce and export generics, leaving little chance there will be a sufficient supply of cheap drugs for indigent nations to buy. The fact that no country has yet been able to attain a license to import such drugs, attests to the hopeless rigidity of the legislation, which NGO’s are rightly calling “the present wrapped in red tape.”

Working for the Drug Companies

Outside of the WTO framework, Washington is not opposed to throwing its weight around to intimidate Latin American nations in bilateral or regional trade agreements, or even to block international agreements that seek to get poor nations access to AIDS drugs. Perhaps the best-know example of this phenomenon occurred in 2002, when the U.S. blocked a major international agreement preceded by two years of negotiations, which sought to give millions of poor people access to HIV drugs and other medications at effective prices. “One-hundred and forty-three countries stood on the same ground,” said Canadian representative Sergio Marchi, “we were hoping to make that unanimous.” At a 2004 Bangkok international AIDS conference, which was besieged by angry protestors, French President Jacques Chirac criticized the U.S. for “dangling” favorable treatment in bilateral trade negotiations in exchange for abandoning generic drugs.

As presumed, the North American Free Trade Agreement (NAFTA) and the Central American-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) are turning out to be equally pliable to U.S. corporate interests. NAFTA boasts the highest commitment to intellectual property rights through its Chapter Seventeen on Intellectual Property, which is in some ways even more comprehensive than TRIPS in its sanctions, as violators are subject to more severe retaliation mechanisms, as well as criminal penalties. The U.S. is taking CAFTA-DR even farther, as demonstrated by the ever-increasing demands that it is imposing on Central American members in ongoing trade bloc negotiations. According to the journal Inside US Trade, U.S. Trade Representative Rob Portman is attempting to push beyond the terms of previous intellectual property agreements to further extend the life of pharmaceutical patents, and it appears he is succeeding. Guatemala, for example, has already agreed to repeal a law aimed at providing local access to crucial generic drugs, despite the fervent social unrest the issue has generated within the country. “The situation for access to medicines in Guatemala is awful, it is terrible,” said Luis Villa, who led the Médecins Sans Frontiéres (MSF) mission in Guatemala when the country signed the CAFTA agreement in 2003,”…there are approximately 1500 people receiving antiretroviral treatment in Guatemala at present, MSF is treating almost one-third of them. We buy quality generics. If there is any compromise on the possibility of buying such generics, then it will become almost impossible to treat HIV/AIDS patients in Guatemala [and] virtually no patients will receive treatment.” In several Central American countries, as AIDS crises are more and more beginning to resemble those of their Caribbean neighbors, the results of these agreements undeniably will have tragic consequences.

Insufficient Gains and Even Less Sufficient Arguments

Due to astronomical prices, only 275, 000 HIV-positive individuals in Latin America currently have access to antiretroviral treatment, according to the Pan American Health Organization, a minuscule number considering that last year alone 200,000 people died of AIDS in the region. For a country like Honduras, for which AIDS/HIV is reportedly the second leading cause of death and hospitalization, and where medications could range up to $10,000 per year, the opportunity for a government drug initiative is being severely limited, especially given the scope of the problem.

Confronted by an onslaught of increasing international pressure, some drug companies have taken piecemeal steps toward reducing prices, with their prevailing leitmotif seemingly being, let charity be more apparent than real. Despite Latin America’s attempts to negotiate discounts with drug companies, such efforts have had a minimal impact. In January, 2006, despite Brazil’s relative success in pressuring drug giants to reduce prices, Pedro Chequer, head of Brazil’s HIV/AIDS program, announced that Brazil, the nation with the highest number of AIDS cases in Latin America, was still unable to afford antiretroviral drugs. “We pay up to 9 times the fair price”, Chequer told the audience, boldly voicing his encouragement of Brazil’s taking actions to break patent agreements and increasing domestic production of generics, despite the potential retaliation the country could face. Organizations like the Clinton Foundation have made small steps in persuading drug companies to set fairer prices, but they haven’t gone “fair” enough. On January 12, for example, former President Clinton announced that agreements between 50 countries and major pharmaceutical companies had significantly reduced some prescription costs to as low as $200 to $400 a year. While such agreements would seem to be a step in the right direction, many discounted drugs, which still often soar above the prices of their generic competitors, may as well cost $1 million a year for the 40% of the region’s citizens that live below the poverty line, particularly those who struggled to live on $1 a day before the disease left them unable to work.

In addition, despite various pharmaceutical companies’ promises to lower drug prices, action has been slow to come, when it has come at all. For example, according to Médecins Sans Frontiéres, despite the fact that Gilead Sciences Inc. announced it would lower the price of the drug Tenofovir for developing countries in 2002, and claimed in 2005 that it had reduced prices in 97 countries, only six of them actually had been registered to receive the price cuts. Of these, the Bahamas was the only nation in the region earmarked for discounts.

Other prescriptions are not at all available. Abbott’s new version of the drug Kaletra is only available in the U.S., while developing nations use an outdated version that requires refrigeration, obviously posing an enormous obstacle in situations where such luxuries are not readily available. On January 19, Gilead and Bristol Myers Squibb Co. (BMS) announced the creation of a breakthrough Fixed Dose Combination pill, which combines three existing antiretroviral drugs, and could potentially cut the treatment costs that go into purchasing and distributing all three existing medications. Although BMS has pledged to allow sub-contractors in South Africa and India to “cheaply” produce the drug, before it graces the shelves of needy clinics in Latin America, it will be released to lucrative U.S. and European markets, once again demonstrating that the world’s AIDS crisis ranks second in importance to hefty corporate profits.

Proponents of protecting and extending drug patents on the part of multinational pharmaceuticals are sounding less and less convincing, as are their arguments that lowering drug prices would compromise incentives for research and development. Harvey Bale, spokesperson and director-general of the International Federation of Pharmaceutical Manufacturers Associations (IFPMA) repeatedly claims, “Extended patent protection to cover [drug] improvements gives important incentives to developers to refine existing products and to provide patients with better treatment options.”

While pharmaceutical companies make it difficult to calculate the actual development costs required to manufacture antiretroviral drugs, it seems clear that the majority of their profits go into branding, corporate sponsorship, promotion, advertising, and salaries, rather than research. And of course, one can not overlook the generous gifts that are bestowed upon politicians, who do the bidding of the drug giants.

A recent study by the Centre for Public Integrity, found that pharmaceutical companies spent more than 800 million dollars on campaign contributions from 1998 to 2004.

Furthermore, the claim that generic competitors within third world markets would inflict enough financial loss to damage innovation incentives seems ludicrous in light of the fact that profits from Africa, for example, comprise only 1% of the industry’s $400 billion in total global sales.

A Policy Priority?

As awareness of the vital attributes of antiretroviral drugs grows among policy makers all over the world, they seem to have come to the forefront of many international AIDS agendas. However, one may ask, who are the principal beneficiaries of these new drug policies?

While President Bush’s highly-criticized President’s Emergency Plan for AIDS Relief (PEPFAR) allocates approximately 50% of its budget toward investment in antiretroviral drugs, it does so in the manner least conducive to truly benefiting those in need. Not surprisingly, under the leadership of Randall Tobias, former CEO and major stockholder of drug giant Eli Lilly, Bush’s AIDS initiative has purchased the majority of its drugs from high-priced pharmaceutical companies instead of investing in generic alternatives.

The decision not to utilize a greater percentage of generic drugs (which cost a fraction of the price and could allow for an indefinitely broader distribution) indicates a truly ill-conceived strategy if the public good is meant to be top priority in the program’s aims.

In response to this clearly flawed strategy, AIDS organizations are pointing a finger at Tobias, who has a history of attempting to block poor nations’ access to generic drugs. The former executive was a charter member of the industry group that notoriously attacked Canada’s widely-applauded September 2003 patent-reform plan, which was designed to allow generic producers to export drugs exclusively to poor nations. “Tobias's appointment is a bit like trusting the CEO of ExxonMobil to lead a government effort to promote solar power,” said Naomi Klein, writer and major criticizer of “brand bullies.”

Beyond Tobias, the Food and Drug Administration (FDA) has also played a role in delaying the generic drugs that could be used for the initiative. In an apparent attempt to slow the use of new generic drugs, PEPFAR required the drugs receive approval from the FDA, even if the generic alternatives were already approved by an almost identical body within the World Health Organization.

Despite the FDA’s claim that it was expediting the approval process, its Center for Drug Evaluation and Research’s Office of Generic Drugs (OGD) took as long as eight months to offer “tentative” approval to some drugs, which the body could have potentially approved in as little as six weeks. As a result, only 15 generic drugs were approved by the end of 2005, with their distribution still highly limited, as PEPFAR’s strategy only allows for their sale and distribution “where international patent agreements permit them to be purchased.”

Furthermore, PEPFAR funds faith-based groups, which espouse an often ill-suited abstinence and fidelity approach while equipped with little or no health know how, thus siphoning financial resources from urgently needed medical programs in favor of diamond-in-the-sky approaches. Such has been the case in Haiti, where PEPFAR allocates a mere 17% of its budget to antiretroviral drugs, while focusing its attention on promoting abstinence policies, resorting to almost ridiculous tactics such as producing soap operas to change personal behavior.

The promising progress that even insufficient drug resources have already made in Haiti, should clearly indicate that more resources need to be allocated to drugs, not to flighty behaviorist approaches custom-tailored to please the Christian right.

Moreover, PEPFAR is required to set aside one-third of its overall AIDS prevention budget to Bush’s highly criticized ABC strategy (Abstain, “Be Faithful”, and use Condoms as a last resort), which seems fine in print, but it is highly incompatible with the realities to be found in Latin America, in which women rarely have the luxury of abstinence. Especially in the widespread situations of extreme poverty, where young girls are forced into marriage or the sex trade, they can not simply say “no” to sex. Once married, fidelity offers little protection for many women. According to the 2005 U.N. AIDS Epidemic Update, married Nicaraguan women were twice as likely as sex workers to be living with HIV due to the irrepressible promiscuity of their husbands.

"In an age where five million people are newly infected each year, and women and girls too often do not have the choice to abstain, an abstinence-until-marriage program is not only irresponsible, it's really inhumane," U.S. Congresswoman Barbara Lee told BBC last summer.

Also, by specifically placing sole responsibility on often powerless individuals, such ideology-totting approaches relieve policy makers of initializing the courage to confront the bleak social, economic, and cultural realities in which the AIDS epidemic thrives.

While catering to the goals of the pharmaceutical lobby and the religious right, it is clear that the most fundamental needs of AIDS victims lack priority in the President’s AIDS policies, which are geared to promote a few more advantages for the few, to the detriment of the many. Given PEPFAR’s controversy, AIDS and international development activists alike are appalled by President Bush’s plan to merge U.S. aid agencies, aid accounts, and individual programs under one director: Randall Tobias. As Deputy Secretary of Development and administrator of USAID, the former executive, who has virtually no experience in development work, will have unprecedented power to assert his own agenda.

Adding salt to the wound, the White House has further compromised the ability of Latin American governments to cope with the AIDS crises by recently cutting overall development aid to the region by 28.5%, making 2007 the third consecutive year that significant aid was slashed and relocated to regions of greater “strategic” importance. Thus, the AIDS agendas of Latin American governments, already debilitated by the pervasive corporate influence of the U.S.-dominated system of international trade, must now spread resources even thinner as it once again compensates for cuts in development assistance.

Adverting Another Africa

As the World Bank stated in a 2003 publication on AIDS, “If the warning signs are heeded, and appropriate prevention measures are taken in the very near future, Latin America has the opportunity to avoid the sad stories seen in other parts of the world. “ Yet despite the growing public outcry over the issue, the situation is worsening, and Latin American nations have been left to navigate a tortuous system dominated by the power of the pharmaceutical lobby and White House diktats.

The fate of Latin America not only lies within its ability to attract international attention and support for its growing AIDS crisis, but also in its bleak chances of outmaneuvering the system of imbalanced trade and corporate privilege, which traditionally has had a hand in keeping the region marginalized and impoverished. Furthermore, without a renewed international commitment to addressing the fundamental issues of human well-being and poverty, little hope remains for eradicating a disease that already thrives within the ranks of the suffering and deprived, and now hopelessly exacerbates their plight.

This analysis was prepared by COHA Associate Christine Crowley

March 10, 2006:
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