The Lancet

18 AUGUST 2001

The Global Health Fund: Moral imperative or industry subsidy?

by Nathan Ford; Ellen t Hoen

Last month's G8 Summit in Genoa, Italy, was described by many as a war zone. 100 000 demonstrators gathered in the city, among whom a few intended to cause trouble, and peaceful marches quickly degenerated into fierce clashes between demonstrators and riot police.

The G8 response to this public unrest was to focus attention on the newly established Global Fund for Health. The fund has been established as a source of money for prevention, treatment, and research activities for three of the less-developed world's biggest killers: AIDS, tuberculosis, and malaria.

The UN has calculated that up to US$10 billion is needed annually to fight AIDS alone, but by the end of the summit the fund stood at a paltry $1.3 billion. That is the amount subSaharan Africa will pay in 6 weeks' debt repayments. Furthermore, it has been stressed that substantial investment in health systems will be needed to enable poor countries to increase prevention, treatment, and research activities.1 This investment will require far more resources than have so far been committed. It is lamentable, but not surprising, that the world's rich governments cannot come up with enough money to tackle such an urgent issue. Their response was to label the fund a public-private partnership, calling upon multinationals to fill the funding gap.

There have been exchanges between the USA and the European Union (EU) about how this limited amount of money will be spent. The USA, backing its pharmaceutical industry, wants the money to buy brand-name drugs. The EU says that the fund should not become just another wealthy customer for the pharmaceutical industries. Medecins Sans Frontieres, Oxfam, and others believe that if the purpose of the fund is to save lives, and not to give taxpayers' money to shareholders, then it should always be spent on the most affordable medicines and other health commodities. In the case of AIDS, triple-therapy costs five times less from generic-drug companies in India than pharmaceutical companies in the west.

To obtain and sustain an equitable pricing system for medicines in less-developed countries, a combination of mutually supportive strategies is required.' Generic competition is so far the only proven way to bring drug prices down. In Brazil the price of AIDS drugs fell by 82% over 5 years thanks to such competition. Equitable pricing requires an interpretation of the World Trade Organisation TRIPS (trade-related aspects of intellectual property rights) agreement that prioritises public health. Countries should produce or import generic drugs through compulsory licensing, or parallel import patented products at the lowest price offered on the world market. Members of the WTO are increasingly agreed on the need to make full use of these safeguards. A key challenge will be to put them into action.

Lower prices can also be achieved by supporting the local production of drugs through voluntary licensing and technology transfer. This strategy is long-term, sustainable, and will also stimulate economic development. The final GS communique was a compromise between the US and EU positions. It acknowledged the importance of TRIPS safeguards, but went on to thank the pharmaceutical industry for their efforts at reducing their drug prices, and provided reassurance that drug patents are important because they fuel innovation. This may be true, but the current patent system has resulted in AIDS drugs that have been unaffordable for 95% of those in need, and has "fuelled the innovation" of virtually no new drugs for tuberculosis and malaria in the past 30 years.

Without basic commitments on how funds are to be spent, who makes the decisions, and a policy of purchasing medicines at the lowest possible cost, it will be a long time before the fund will have any substantial impact on diseases that kill 7 million people every year.

*Nathan Ford, Ellen 't Hoen Medecins Sans Frontieres, 124-132 Clerkenwell Road, London EC1R 5DJ, UK

Footnotes:

1 Brugha R, Walt G. A global health fund: a leap of faith? BMJ 2001; 323: 152-54.

2 Medecins Sans Frontieres. Pills and pocketbooks: equity pricing of essential medicines in developing countries. Geneva: MSF, May, 2001. www.accessmed-msf.org