NCPA - National Center for Policy Analysis

COST OF A CURE

July 21, 2004

Generic AIDS drugs often sell at much higher prices than the media generally quotes, and only free market competition in the AIDS treatment industry will encourage drug research and distribution to those who need it most, say Roger Bates (American Enterprise Institute) and Richard Tren, director of Africa Fighting Malaria.

Pharmacies in Zambia, for instance, sell various drug combinations at considerably higher prices than those quoted by the media.

  • In a small sample of pharmacies in the capital, prices of Cipla's cocktail range from $588 to $840 a year, a 60 percent to 140 percent increase over the quoted price.
  • Incidentally, patented drugs from GSK (the Combivir cocktail) sell for between $1,740 and $2,250 a year.

Most pharmacies don't stockpile generic AIDS drugs, say Bates and Tren, because they sell poorly, and most clinics tend to distribute drugs donated by GSK and Merck.

Moreover, AIDS activists and the media perpetuate the myth that generic drugs are inexpensive and plentiful, while patented drugs are prohibitively expensive. In reality, the opposite is true. And because large research-based drug firms donate many AIDS drugs to African countries, they uphold the image of Africa as a no-profit zone for pharmaceuticals.

AIDS treatment should be seen as business, not charity, if drug firms are to have any incentive to research and manufacture effective drugs for AIDS patients, say Bates and Tren.

Source: Roger Bate and Richard Tren, "The Cost of a Cure," American Enterprise Institute, June 15, 2004.

 

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