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Last Updated: Friday, 24 October, 2003, 12:42 GMT 13:42 UK
HIV: The drug firms' quest for a cure
By Mary Hennock
BBC News Online business staff

HIV positive baby in South Africa
HIV/Aids has cut life expectancy by 20 years

With 40 million people around the world infected with HIV/Aids, the potential market for a vaccine or cure is enormous.

The financial rewards for the drug company that makes the breakthrough could be huge, too.

So far, the human and economic costs of Aids have been starkest in Africa, where average life expectancy is plummeting and big investors such as South Africa's gold miners reckon a quarter of their workers are infected and fear healthcare costs could threaten profitability.

Drug companies have faced a barrage of criticism for failing to tackle this tragedy, and as a consequence they are beginning to respond.

Putting profits first?

For years, they have been accused by governments and activists in developing countries of protecting their patents on existing Aids control drugs, putting drugs beyond the reach of the poor.

Facts and figures on the impact of HIV in sub-Saharan Africa

Recently the major firms have been challenged in a significant way by smaller pharmaceutical firms making competing copycot "generic" drugs which they sell at sharply discounted prices.

These competitors only posed a threat after the drug firms had racked up more than $5bn (3bn) worldwide in annual sales of HIV drugs.

UK drug giant GlaxoSmithKline reaps almost half those sales, with the rest mostly shared between Swiss group Roche, and US firms Bristol-Myers Squibb and Merck.

Earlier this year, Glaxo was sued by Aids campaigners in the United States, who alleged it was overcharging for its antiviral drugs, AZT, 3TC and Ziagen.

And in South Africa, Glaxo was slammed by the competition watchdog which ruled that the firm failed to make life-saving Aids treatments available to the poor.

Such actions seem to have had an effect:

Last month, Glaxo said it was cutting the price of five HIV/Aids drugs by up to 33% as part of a 'not-for-profit prices' scheme under which Glaxo and other drug companies provide some cheaper drugs to developing countries.

From lab to licensing

The industry does not collect overall figures for what drug companies spend on research into HIV drugs, according to the Association of the British Pharmaceutical Industry (ABPI).

Only one or two compounds for every 10,000 evaluated ever gets as far as being granted a licence for use
However, it calculates the UK drug industry spent 2.5bn ($4.2bn) a year on "high-risk, high-failure research into as yet unbeaten diseases," including Aids.

The ABPI says developing new drugs can be a very expensive, high risk business, taking an average of 10-12 years to test a new medicine to legally-required safety standards.

It calculates every successful drug costs, on average, 350m to bring to market.

'Blockbuster' business

Thousands of drugs developed by pharmaceutical firms never make it that far.

Only one or two compounds for every 10,000 evaluated ever gets as far as being granted a licence for use.

This is why, the pharmaceutical industry argues, it needs to protect its patents.

Drug firms rely for their profits on developing "blockbusters", hugely successful drugs that repay their development costs and support R&D for other compounds.

Just how big a blockbuster can be is clear from sales of the world's current best seller, Pfizer's Lipitor, a cholesterol-lowering treatment which dominates an $8bn market.

Patent protection

When the labs fail to deliver a blockbuster in time to replace drugs on which patents are expiring, the results can be painful.

AstraZeneca, for instance, faced angry investors when it admitted its anti-cholesterol treatment Crestor would reach the US market later than expected.

And AstraZeneca was left short of a drug to replace the former world number one, Losec, an ulcer treatment that had sales of 10m a day in 2001.

Blockbusters make huge sums of money but the drug companies argue that the money must be spread widely to ensure a good supply of replacements.

They claim this is why they have battled to protect their patents against generic drugs.


Criticism of drug firms has been fiercest over HIV.

It reached a peak in April 2001, when 39 pharmaceutical firms contested a South African law that could provide cheaper versions of branded Aids drugs.

The firms unconditionally dropped their case.

There are many people in the Western world who have insurance or who are prepared to pay, so drug companies can make a return
The drug firms insist that drug patents and prices are not the only obstacles to Aids sufferers in the developing world receiving treatment.

Poor roads, lack of proper storage facilities, rudimentary medical supervision and lack of regular check-ups are all factors, they say.

Fewer than 5% of medicines on the World Health Organisation's (WHO's) essential drugs list are covered by patent protection anywhere in the world, says ABPI.

One survey of patents in Africa for Aids-related medicines found the latest drugs were legally protected in less than one in five cases.

Poor healthcare

In countries where inhabitants earn less than 50 pence a day and governments do not support public health, patients in need do not get access to even these unpatented and inexpensive medicines, the ABPI says.

However, with many blockbusters targeting diseases of affluence, such as cholesterol-lowering drugs, is the Aids epidemic sweeping the developing world being side-lined by drug developers?

An Aids vaccine or cure could be one of the biggest blockbusters ever.

In this particular case, there are many people in the Western world who have insurance or who are prepared to pay, so drug companies can make a return, say analysts.

Some firms are attempting to develop an Aids vaccine while others are looking for ways to make existing methods of controlling the virus in the body more effective.

But the virus that causes Aids mutates rapidly and may easily stay ahead of all of them.

Clinton brokers landmark Aids deal
24 Oct 03  |  Americas
HIV drugs boost 10-year survival
17 Oct 03  |  Health
Annan issues stark Aids warning
22 Sep 03  |  Africa
Campaigners welcome US Aids plan
28 May 03  |  Americas

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