In the late 1990s, large pharmaceutical companies priced their HIV/AIDS medications at an exorbitant $15,000 a year, barring people from access to medicine in developing countries who suffered the most from the epidemic and raising public outcry across the world. Pharmaceutical companies defended their right to maintain these prices in the name of protecting their patent of these medical, life-saving drugs.
The good news is, leading pharmaceutical companies in recent years have turned their focus to helping the poor, in what they call “equitable pricing strategies.” This strategy targets middle-to-lower income countries. Large companies have priced HIV/AIDS medication for only $100 a year, a drastic decrease since the 1990s, and have made treatments for malaria, tuberculosis, hepatitis C and some cancers accessible in developing countries.
Impact of These Changes
Nearly 20 million Africans are on HIV/AIDS medication now, a statistic that stands in stark contrast to the thousands of people that died of HIV/AIDS each day in Africa 20 years ago due to the lack of access to medicine in developing countries.
The Access to Medicine Index ranks pharmaceutical companies on how accessible and affordable their medicine is. It ranked 20 of the world’s largest (research-based) pharmaceutical companies, indicating a healthy trend towards affordable medicine that can go to those most affected by common illnesses and diseases.
The Access to Medicine Foundation performs a deep analysis of these companies. For example, the foundation observes whether companies pay attention to the socioeconomic statuses of their customers in order to tailor the prices of their medicine effectively. The foundation has also remarked that large pharmaceutical companies have departed from previous policies and have granted licenses to generic drug companies who can produce a greater quantity of medicine at a lower price.
Cause of These Changes
Statistics show disparities between the health of high-income and low-income populations. In 2011, the life expectancy between high and low-income countries was as extreme as a 36-year gap. Given such a difference, it makes sense that pharmaceutical companies have specifically researched and developed cures for five main illnesses, including lower respiratory infections, diabetes, hepatitis, HIV/AIDS and malaria, that lead to premature deaths. It did this by improving access to medicine in developing countries.
The U.S. Food and Drugs Association (FDA) has also taken part in global health and access to medicine crisis in developing countries. The FDA awarded $50,000 to four companies and $25,000 to two companies during its National Capital Consortium for Pediatric Device Innovation. These six companies received awards for their innovative solutions for childcare, ranging from devices that diagnose spinal deformities to technology that cleans central-line associated bloodstream infections. Developing and investing in these technologies could have huge impacts on access to medicine in developing countries where child mortality still poses a serious threat.
Growth for Big Pharma
There are also economic reasons for these changes in the pharmaceutical industry. Research has shown that improving public health boosts the economy. Even incremental improvements in life expectancy can increase yearly economic growth rates by nearly 0.5 percent. As populations become healthier, it increases the demand for medicine. Consequently, pharmaceutical companies have witnessed growing revenues from emerging markets in developing countries. In fact, two large pharmaceutical international companies, AstraZeneca and Sanofi, receive a third of their revenues from developing markets. In short, improving access to medicine in developing countries means future profits for pharmaceutical companies.
The Upshot of These Changes to Access of Medicine in Developing Countries
Despite all the progress that pharmaceutical companies have made, there is still a persistent problem they will only invest and research in drugs that they think will make a profit. Drug prices are often high because of rebates, the cost of taking on risks for development and research of life-saving drugs and fees for intermediary pricing companies. In order to change these persistent industry practices, public pressure seems to play the strongest role, especially in America.
The continued change will come from the convincing of top leadership in pharmaceutical companies to focus on helping the world’s poor and sick, especially in developing countries. For example, under the direction of former Chief Executive, Andrew Witty, for GSK, a British-based pharmaceutical company which has always ranked first on the Access to Medicine Index, has pledged to do as much as he could for the poor in Africa and Asia. It is up to large pharmaceutical companies to set the tone in this new era of providing access to medicine in still developing countries.
– Luke Kwong