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AIDS drug makers cut price
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May 11, 2000: 1:12 p.m. ET
Five companies agree to cut prices for AIDS drugs in developing countries
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NEW YORK (CNNfn) - Five large pharmaceutical companies have agreed to slash prices for HIV drugs in Africa and other developing regions to help deal with the AIDS epidemic in poor countries, the companies and United Nations officials said Thursday.
The five companies include two American firms, Merck & Co Inc. (MRK: Research, Estimates) and Bristol-Myers Squibb Co. (BMY: Research, Estimates). The others are Britain's Glaxo-Wellcome PLC (GLX: Research, Estimates), privately held Boehringer Ingelheim of Germany and Roche Holding AG, a unit of F. Hoffmann-LaRoche of Switzerland.
The United Nations said the deal represents a major step in making the drugs affordable for millions of AIDS patients in sub-Saharan Africa. The region has one-tenth of the world's population, but two-thirds of all cases of HIV, the virus that causes AIDS, according to U.N. figures.
In some developing countries, as many as one in every four people are thought to carry the HIV virus, many of them below the age of 25.
The drug makers' pact represents "a promising step in a long-term process," said UNAIDS head Peter Piot. UNAIDS is the U.N.'s coordinating agency to combat the disease. 
"Lowering the price of medicines, however, is only one critical factor in what must become a much broader and more urgent effort to help people living with HIV and AIDS lead healthier and more productive lives," he said.
Pharmaceutical manufacturers have been under fire from AIDS advocates for the cost of life-saving drugs in developing countries. Because AIDS is a relatively new disease, drug makers still hold patents on their treatments - preventing cheaper, generic competition to their products.
CNN.com In-depth: AIDS. Africa in Peril
 The plan is expected to reduce overall costs for AIDS drugs by about 70 percent, according to the humanitarian group Doctors Without Borders.
Glaxo Wellcome, for example, plans to sell its Combivir treatment for $2 per day in Africa, compared with $16.50 per day in the United States.
Merck said it plans "to improve significantly access to and availability of a range of medicines," but it did not provide specific price plans.
"We are proud to be among the first companies to collaborate with other stakeholders to take a new approach to multisectoral cooperation in tackling this global health challenge," Merck CEO Raymond V. Gilmartin said in a statement.
Bristol-Myers Squibb said it was ready to expand access to its antiretroviral medicines Videx and Zerit, as well as to Megace and Fungizone, which are used to treat related infections. It did not provide specific commitments.
In a boost to the initiative, the Clinton administration is backing away from a controversial policy that had threatened to impose trade sanctions against developing countries that pursued manufacturing licenses on patented drugs.
An executive order by President Clinton on Wednesday promised that U.S. officials would not stand in the way of countries seeking to obtain less costly AIDS medication for their poorest citizens as long as the measures complied with international trade rules.
The United States had placed South Africa on a "watch list" of countries that could face trade sanctions for threatening intellectual property of U.S. pharmaceutical companies. 
--from staff and wire reports
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