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Myths and Realities on Prices of AIDS Drugs

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Publication Date: May 2004

Publisher(s): Hudson Institute

Author(s): Carol Adelman

Funder(s): Hudson Institute

Funder(s): Hudson Institute

Topic: Health (Pharmaceutical services)

Type: Report


The introduction of antiretroviral drugs (ARVs) as part of HIV/AIDS clinical care has relegated AIDS from a debilitating terminal illness to a manageable chronic condition. As there is still no cure for HIV/AIDS, ARVs are the best treatment option currently available. ARV therapy is only effective if there is a healthcare infrastructure - doctors, nurses, clinics, supplies, and storage and distribution systems. This infrastructure is often lacking in developing countries, where the majority of AIDS victims live. Media and health activists have focused on the price of drugs as opposed to the larger healthcare infrastructure obstacles to treating AIDS patients. Yet, the price of both patented and copy ARV drugs is a relatively small part of total treatment costs, estimated at approximately 20 percent. This paper addresses just the pricing issue. It does not discuss the safety and efficacy of the drugs currently promoted by WHO, NGOs and U.S. media. There is no evidence that these drugs, which are incorrectly called “generics,” have undergone human bioequivalence testing verified by rigorous drug regulatory agencies. They are thus properly termed “investigative new drugs” or “copy” drugs. Though the debate on ARV pricing is hardly new, it has recently come to the forefront with increased urgency. With the Bush administration’s pledge of $15 billion over the next five years to combat AIDS in 14 African countries and the Caribbean, Indian drug companies, the WHO and many NGOs have stepped up their claim that the U.S. Government should purchase these copy ARV drugs because they are less expensive than patented ARV drugs.