Bloomberg Businessweek explores growing trend in pharma to license, donate HIV drugs

Aug 7 2010

"Pharmaceutical companies, once blasted as uncaring or downright greedy for charging thousands of dollars for a year's worth of AIDS medicines … in poor countries, lately have been slashing prices and licensing their drugs for free or nominal cost to nonprofits or local manufacturers in the developing world," Bloomberg BusinessWeek writes in an analysis piece that examines how this trend, combined with a growing capability among aid agencies to distribute drugs, has the potential to increase access to HIV/AIDS drugs worldwide.

The piece highlights agreements between pharmaceutical companies and nonprofit groups, like the one that made possible the clinical trial of an antiretroviral-containing vaginal gel in South Africa that was found to reduce HIV transmission in women. "Gilead, which logged almost $6 billion in AIDS-drugs sales last year, donated the gel's key ingredient, sold in the U.S. as a pill called Viread, and granted a royalty-free license to Conrad, a nonprofit reproductive-health organization that plans to distribute the product in Africa," the news service writes. The article also highlights the ongoing discussions between UNITAID and several pharmaceutical companies about the formation of a "patent pool" to "license drugs in development to generic makers who could sell medicines at lower prices than possible for the large companies."

Bloomberg BusinessWeek lists key points in HIV/AIDS drug pricing history: "As prices fell, demand increased, yielding economies of scale that have helped lower prices further, says Michael Kazatchkine, executive director of the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria," the article notes. "The bottom line: By licensing AIDS drugs at little cost for use in the Third World, drugmakers get favorable press and don't bear distribution costs," the article concludes (Bennett/Randall, 8/5).