Cheap AIDS Drugs, Now What?

Daryl Lindsey wrote a pretty even handed article on the recent decision by pharmaceutical companies to drop their patent challenge to cheap AIDS drugs in Africa. But as Lindsey notes, the entire fiasco was largely a public relations gimmick to affect drug pricing in the United States.

It’s buried in Lindsey’s article, but although the pharmaceutical companies’ actions were widely announced in the media, the next step wasn’t — South Africa, the main focal point of this issue, announced it had no intention of actually using anti-AIDS drugs. This should have come as no surprise as previously the South African government had refused companies who offered to donate millions of dollars worth of anti-AIDS drugs.

And, to be honest, it doesn’t really make any sense for African nations to attempt to duplicate healthcare treatment patterns of Western nations when it comes to AIDS. Even with the very cheap anti-virals, their health care systems lack the capacity to effectively distribute and administer an anti-AIDS drug regimen.

So what was the point? The real debate, as the Salon.Com article makes clear, is about price controls on drugs in the United States. The United States is the only developed country to my knowledge that doesn’t have widespread price controls on drug prices. Some Left wing groups want to change that as part of a plan that would essentially nationalize health care in the United States (akin to what Canada or Great Britain have).

Source:

Amy and Goliath. Daryl Lindsey, Salon.Com, May 1, 2001.

Coelacanth Sighting Near South Africa

The BBC reports that divers took film footage of several coelacanth in relatively shallow waters (104 meters) off the northeast coast of South Africa. That’s the shallowest water the coelacanth — once believed to be extinct for 70 million years — has been observed in, and the only siting of the fish in South Africa since the famous 1938 catch by a fisherman that revealed to the world that the species was in fact not extinct.

Some Curmudgeonly Thoughts on World AIDS Day

You know you work at a university when all of the “save the world” events happen a day early. World AIDS Day is today, but all of the related events by activists here were held yesterday. Apparently saving the world from AIDS is important, but you’ve got to fit in raising awareness before the students start their alcohol rituals beginning Thursday night.

Also I have to confess I’m getting annoyed with the “break the silence” and “raise awareness” angles. For example, actor Danny Glover told the Associated Press that, “If I am disappointed with a tape, we shoot it again. But with AIDS, the movie’s over. It’s up to you and me to break the silence.”

Break the silence? Maybe in South Africa or Zimbabwe, but in the United States you can’t avoid AIDS awareness — if I walk a mile on campus I’m sure to see at least 5 or 6 different AIDS-related posters.

Finally, it is interesting to see that today moderate conservative claims that were so controversial in the 1980s have become mainstream. The United Nations AIDS Agency put out a press release saying,

Broadly speaking, men are expected to be physically strong, emotionally robust, daring and virile. Some of these expectations translate into ways of thinking and behaving that endanger the health and well-being of men and their sex partners.

This seems like a veiled way of saying, “Stop having so many different sex partners, you morons.” When some conservatives in the 1980s tried to suggest that maybe gay men should act more responsibly by limiting the number of sex partners, the idea was pilloried as a right wing attack on everything good about life.

Part of the difference is that in Africa AIDS is largely a heterosexual disease, so the attack on reckless promiscuity is no longer directed solely at homosexuals. Still, those who criticized monogamy as repressive or conversely celebrated casual sex with multiple partners as liberating were dead wrong.

Companies Steel Themselves Against Competition

For the past several months
U.S. steel companies, their unions and Democrats on Capitol Hill have
been whining that steel manufacturers from Brazil, Japan, Russia and other
countries are “dumping” steel in the United States. These critics
charge that companies from these nations are unfairly selling steel at
a price that is simply too low for American firms to compete. As a letter
from 13 U.S. governors to President Bill Clinton summed up the case, “Our
businesses cannot compete with unfairly priced, dumped and subsidized
products from desperate foreign markets. Each day of lost market share
equals real job losses and serious financial consequences for a vital
American industry.”

Although the Clinton administration
initially resisted calls to take action against the “dumping”
of steel, the Commerce Department ruled in late March that Belgium, Canada,
Italy, South Africa, South Korea and Taiwan all illegally dumped stainless
steel into the U.S. market. Stainless steel from those nations could face
tariffs as high as 60 percent if the U.S. International Trade Commission
decides the “dumping” hurt domestic steel makers. Although stainless
steel makes up only a small percentage of the steel market, this decision
makes it all the more likely that the Commerce Department will rule that
Japan, Russia and Brazil illegally dumped hot-rolled carbon steel into
U.S. markets.

As with most “anti-dumping”
appeals, however, the real problem is not with the foreign producers but
with the domestic steel industry; special protectionist measures now will
only reinforce and exacerbate those problems.

As a September 1998 article
in The Economist noted, long-running protectionist legislation
on behalf of the steel industry has encouraged firms to avoid taking measures
to reduce their costs or improve their operating procedures. Whereas in
other countries consolidation of firms has followed relatively flat steel
prices, The Economist notes “in the hour or so it takes to
get from Gary, Indiana, to Chicago you will pass nearly half a dozen full-scale
integrated steel plants, each with its own supplier networks, inventory,
production schedules, marketing and sales force.” ThatÂ’s an extremely
expensive method of business for a rather undifferentiated commodity such
as steel.

In fact it is so inefficient
that the traditional steel industry faces serous domestic challenges from
small-scale competitors once derisively referred to by the big steel companies
as “mini-mills.” Unlike the traditional steel companies, which
use ion ore and huge blast furnaces, the mini-mills use scrap metal and
electric-arc furnaces. Dismissed only a few years ago as insignificant
players, mini-mill companies such as Nucor now produce almost 40 percent
of U.S. steel and Nucor recently passed U.S. Steel as the number one domestic
producer of steel.

The more traditional steel
companies have tried to run their own mini-mills with little success.
An Alabama plant, Trico, financed by a group of traditional steel producers,
lost nearly $40 million last year. The large steel companies with their
bureaucratic, old style production methods have been unable to replicate
the set of management processes and coordination necessary to make mini-mills
succeed.

The large steel companies
are using the current surge in steel imports, caused in part by the huge
boom in the U.S. economy, to seek quotas to protect them from their own
inefficient production methods. House Republicans and Democrats joined
together in late March to approve the Steel Recovery Act which would limit
the amount of steel imported into the U.S. to the average of level of
steel imports from July 1995 to July 1997.

This bill would be a disaster.
According to the Precision Metalforming Association, limiting steel imports
to this average would have left American industry 4 million tons of steel
short of what it needed. The result would be a dramatic rise in the price
of steel in the U.S., which would result in increased cost to consumers
— a special tax on consumers to benefit the steel giants. In addition
without an opportunity to sell its steel in the world’s largest market,
foreign nations won’t have access to the dollars they need to help recover
from the ongoing Asian economic crisis. Setting up protectionist barriers
in America now would be like throwing gasoline on a raging fire.

The regimen of protectionist
barriers on foreign goods such as Japanese cars already harms American
consumers (almost $1,000 per car in the case of the automobile quota);
the last thing Congress should be doing in the midst of AmericaÂ’s economic
boom is imposing even more burdens on business and consumers.