The Halo Effect

Why would any drug company want to do business in Africa? To be a pharmaceutical giant on the continent is to be accused of discriminating against the poor, either by pricing medicine beyond their reach or by ignoring diseases that are endemic in poverty-stricken areas. It is also to invite suspicion of using Africans as guinea pigs in unsafe drug trials — such allegations have led to ongoing lawsuits seeking more than $9 billion against Pfizer in Nigeria. (Pfizer says the allegations "are simply untrue" and is fighting the charges against a trial it calls "responsible and ethical.") And on a continent where 2.1 million people die of HIV/AIDS a year and 2.8 million more are infected — making a total of 24.7 million people in need of drugs, a fraction of whom actually get them — drug companies operating in Africa have been accused of complicity in a 21st century catastrophe.

The pricing of antiretroviral (ARV) treatments for AIDS and HIV is a particularly contentious issue. Drug companies say they need to recoup the billions of dollars spent on research, and argue that generic copies eliminate the rewards that fund drug discovery and development. (Drug patents typically expire after 20 years in the U.S., but that figure varies from country to country.) Some aid groups and scientists say the drugs' prices put them beyond the reach of those who need them most, and claim the companies put profits and patents before lives.

It's an emotional debate. Protesters have hanged effigies of drug CEOs outside the offices of the Pharmaceutical Research and Manufacturers of America in Washington; no less a figure than Nelson Mandela has condemned Big Pharma for exploiting the dying; and in Kenya in 2004, a Jesuit priest who ran an orphanage in Nairobi, Father Angelo D'Agostino, made headlines when he accused the "drug cartels" of "genocidal action." Today drug companies have lowered the prices of some ARVs. But the controversy threatens to reignite. In July, Médecins Sans Frontières (MSF) warned that newer, more effective drugs were once again being priced prohibitively high. "There is a serious risk that the price crisis ... is set to return," MSF said.

With so much hostility and bad press, drug companies could be forgiven for wanting a better image. That is precisely what industry critics say is behind the hundreds of millions of dollars they pump into corporate social responsibility (CSR) programs in the developing world. The U.S. drug industry says it has created 126 health partnerships with governments and aid organizations that have helped up to 539 million people since 2000. Some observers remain cynical, however. They say CSR is mere window dressing — a clinic here, an outreach program there — that does not address the root problem of how to get drugs to the broadest number of people who need them most.

There's another view of Big Pharma's CSR efforts, of course. Ask Festus Mogae, President of Botswana, whose nation has one of the highest HIV/AIDS rates in Africa. The drug companies, Mogae says, are "very, very important to our efforts to fight AIDS. They fund our projects and sell us drugs at an 85% discount. Their activities have helped sensitize a nation to the whole issue of AIDS. It's having real results. It's not just p.r."

One particular drug company has been a significant player in Botswana: Merck. The U.S. firm created some of the first ARVs capable of treating HIV and AIDS (Crixivan and Stocrin), but has in the past been criticized for its methods of distributing them. In 2004, MSF singled out Merck for reneging on commitments to release the medicines at a cost of less than $1 per person per day. Merck was hurt by such accusations. (According to the firm's website, its founder, George W. Merck, once said: "We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.") So, in 2000, Merck and the Bill and Melinda Gates Foundation put $50 million each into setting up the African Comprehensive HIV/AIDS Partnerships (ACHAP) to support Botswana's efforts to fight the disease, with Merck also committing to supplying ACHAP with free drugs. The program ran for four years, and has now been extended until 2009 with a further total of $13 million in funding from Merck and the Gates Foundation.

Merck's vice president of external affairs, Jeff Sturchio, acknowledges that not everyone will buy in to the company's efforts. "People are entitled to their own views," he says. "There will always be people who are cynical about big corporations." And yet it is undeniable that Merck's work is saving lives. The ACHAP program has been a stunning success. There are now 30 clinics providing free ARVs and counseling across Botswana, and four more mobile clinics to reach remote areas. More than 7,000 health workers have been trained in treating HIV/AIDS. Of the estimated 110,000 people who need treatment in Botswana, 82,000 receive it — a proportion higher than any other country in sub-Saharan Africa except Rwanda. Mother-to — fetus transmission of HIV/AIDS has dropped from 2 in 5 to 1 in 16. Transmission rates among young people have also dropped 20%. And the overall HIV/AIDS infection rate has declined: among 15- to 49-year-olds, it fell from 37.4% to 32.4% between 2000 and 2004. As Mogae's spokesman Jeff Ramsay says: "HIV/AIDS is no longer a death sentence." In 2006, ACHAP was one of 10 winners of a World Business Award given by the International Chamber of Commerce to honor businesses that alleviate poverty and boost progress toward the U.N.'s Millennium Development Goals (MDGs).