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Dean Baker's commentary on economic reporting

Rewritten History on AIDS

The NYT applies a large does of whitewash in its discussion of President Clinton’s current efforts to promote the treatment of AIDS in developing country. While the article notes in passing that Clinton “conceded that his administration fought too long to protect the patent rights of pharmaceutical companies against countries trying to make or import cheaper AIDS medicines,” this lone sentence hardly does justice to Clinton’s work on behalf of the pharmaceutical industry during his tenure in the White House.

Clinton was the person who allowed the pharmaceutical industry to use the power of the U.S. trade office to get the TRIPS provisions into the 1995 Uruguay Round agreement of the W.T.O. These provisions will limit the access to generic drugs for billions of people in the developing world, in some cases raising the price of AIDS drugs by several thousand percent.

Even in his last years in office, Clinton harassed the South African government over its efforts to issue compulsory licenses for drugs used to treat AIDS victims. He didn’t back down until protestors associated with ACT-UP began trailing Al Gore at his campaign events.

It’s good to see President Clinton now working to help AIDS sufferers in the developing world, but it is unlikely that he will be able to undo the harm caused by the policies put in place during his presidency.

--Dean Baker



COMMENTS

Dean, I have to wonder why you think private individuals and corporations would invest in the development of AIDS drugs if, once successfully developed, these indivuduals and corporations would see their developments ripped off?

It's funny to see the conservatives invoke Clinton as the apotheosis of liberalism. Real liberals like my self never liked him until we had to live within the horror show that is the Bush presidency.

"Dean, I have to wonder why you think private individuals and corporations would invest in the development of AIDS drugs..."

I'm betting most of that research was heavily subsidized by the government, first of all.

Second, it's always nice to see that the unrestricted right to obscene pricegouging is more important to Specialist than the lives of tens of millions of people. Nice value set there, guy.

Here is a possibility based upon:
1) Bill has Hill work on national insurance plan at George '41 initiation(lots more info on that for the curious),
2) Bill supports NAFTA after George '41 initiation
3) Bill defends pharm cos. at Uruguay
4) during Bill's admin, the FDA began using pharm co. people on the drug review board as payback for funding to the FDA from pharm cos.; kinda like having the fox guard the chicken shack

Here's my bet:
5) Hillary runs for office supported by pharm cos.

My favourite Hayek quote to all those pseudo-liberals wanting always more intrusive IP:

Just to illustrate how great out ignorance of the optimum forms of delimitation of various rights remains - despite our confidence in the indispensability of the general institution of several property - a few remarks about one particuilar form of property may be made. [...]

The difference between these and other kinds of property rights is this: while ownership of material goods guides the user of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopaedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.

Similarly, recurrent re-examinations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period.

The Fatal Conceit: The Errors of Socialism, 1988 (p. 35) Friedrich von Hayek

PS: if someone could check that citation, it's second handed.

It's not the scientists that demand or receive all the money..and they are the ones that do the work. Scientists are primarily driven by curiosity and the scientific spirit. Most are happy to see their research funded, they don't need to see milllions of dollars in royalties... that's what the business people need.

I know this because I was a grad student in physics at a major university for 6 years. The faculty dreamt of winning Nobel prizes, not millions of dollars.

Case in point, the entire free software movement. It is one of the wonders of the modern world. It consists of millions and millions of linies of code written only because the computer scientists wanted to do it.
The majority of web sites are run on free software..and the world has gained immense wealth from it.

I thought thanks to Brazil and India the TRIPS provisions were watered down with exemptions to essentially allow third world countries to ignore patents in case of extreme urgency. While Brazil hasn't exercise those exceptions yet, it has used the as leverage in negotiating better price for anti-AIDS drugs. And it has an HIV prevention plan that is considered the best in the world.

There are provisions in TRIPS that allow countries to issue compulsory licenses for patented drug that would substantially reduce their price. However, there is still considerably ambiguity about when this is allowed and many developing countries have been reluctant to use this power. Of course countries will be less harmed insofar as they can take advantage of compulsory licenses, but for the moment, most have not used to authority.

In response to Specialist, I believe that we need to develop more efficient mechanisms to support drugresearch. Patents are extremely inefficient. I have several papers that discuss this issue on the CEPR website (www.cepr.net)

While I'm not a big fan of big pharma, but Clinton had 8 years to work out a public/private partnership to perform his intended mission, and he didn't.

(Fair disclosure: I just avoided a surgery because one of those evil drug companies developed an effective antibiotic through research)

The only way to bring AIDS in Africa under control is to stop the spread, and we know how it is spread, but it is politically incorrect to suggest people modify their conduct in any significant way.

The tragedy continues.

PBS:Frontline did a 3 part special on AIDS. I recommend it to everybody. Especially if you are one of those 'tough-minded' people who think that we should just let it go because that's 'just the way it is.'
BTW: Frontline is the best news program on TV...bar none.

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