The Role of TNCs and AIDS drugs – “Lives before profits”?

L.O.s1. To define the terms: TNC, Generic, “Big Pharma”, ARVs, HAART,

Tiered Pricing.2. To describe the structure of a TNC

3. To explain the role of TNCs in Health Care.

TNCs

• Definition: A company that operates in at least 2 countries. Usually with its HQ and R&D department in the country of origin and manufacturing plants overseas.

• Examples of Pharamceutical TNCs (sometimes called “Big Pharma”): GlaxoSmithKline and Bayer.

How do TNCs develop new drugs?

• It is estimated that new drug costs $500 million to bring to market.

• Most money is spent targeting diseases of affluence as MEDCs can pay high sums for treatments.

• This figure includes the R&D in labs, clinical trials, marketing (especially to doctors) etc.

• Patents make it illegal to copy the drug and for rival companies to make a generic version for 20years.

Brief History of AIDS drugs in Africa

• In 1996, HAART - an effective combination therapy that delays the onset of AIDS - became available in MEDC’s. Within four years, death rates for people with HIV/AIDS in developed countries had dropped by 84%.

• At a cost of US$10,000-15,000 per person per year, these antiretroviral drugs (ARVs) were far too expensive for the majority of HIV infected people in resource poor countries.

• Five years after HAART therapy was introduced in the West, fewer than 8,000 people in sub-Saharan Africa were receiving the life-saving drugs.

• Big Pharma companies refused to lower prices saying there would be no money for research and development (R&D), no innovation, and thus more and more people would die from AIDS and other deadly diseases.

In 2001 an attempt was made by thirty-nine major pharmaceutical companies to prosecute the South African government for passing a law that

allowed easy production and importation of generics.

Brief History of AIDS drugs in Africa• In the Year 2000 an Indian pharmaceutical company called Cipla

started to produce generic antiretrovirals that were exactly the same as brand versions made by large pharmaceutical companies, but significantly cheaper.

• This sparked a price war between branded and generic drug makers, which forced the large pharmaceutical companies to lower the price of their AIDS drugs.

• This competition, coupled with pressure from activists, organizations - such as the Clinton Foundation - and governments of poor countries with severe AIDS epidemics, dramatically reduced the price of ARVs for developing countries.

• By the middle of 2001, triple combination therapy was available from Indian generic manufacturers for as little as $295. By 2007 the most common antiretroviral combination (3TC/d4T/NVP) available for only US$87 per patient per year

Graph showing the Prices for ARV’s 2000/2001 Even now prices

have fallen, ¾s of people infected with

HIV go without treatment

Case Study:

• Plus lots of prescription medicines Including:Anti Malarias, cancer & heart disease drugs

GlaxoSmithKline• Mission: to improve the quality of human

life by enabling people to do more, feel better and live longer.

• Research based pharmaceutical company.• Employs over 100,000 people in 117

countries• Every hour Glaxo spends more than

£300,000 to find new medicines. • Only pharmaceutical to tackle the three

‘priority’ diseases identified by the WHO: HIV/AIDS, tuberculosis, malaria.

• In 2006 Glaxo shipped 206 million tablets of their HIV treatments (Combivir and Epivir) to developing countries

• Many consumer brands are household names: Ribena, Horlicks, Lucozade, Aquafresh, Sensodyne, Panadol.

• GSK was 1 of the 39 pharmaceutical companies involved in the South Africa legal case.

• GlaxoSmithKline, has now changed its tactics completely and has granted permission (called a voluntary licence) to major South African generics producer Aspen, to share the rights to their drugs without charge.

• http://www.gsk.com/infocus/world-aids-day.htm video clip/propaganda?!/good PR

Wider reading!!!

• http://www.guardian.co.uk/commentisfree/cifamerica/2009/feb/25/glaxo-smith-kline-drugs-aid

• http://www.avert.org/generic.htm• GSK website:http://www.gsk.com