Is Pfizer Seeking a Trade Agreement to Raise the Price of the Medicines Donated to Programs in Developing Countries?

Mike Palmedo
January 29, 2009

Pfizer CEO Jeff Kindler and Stanford Professor John Barton have written Senate Finance Committee Chairman Max Baucus, proposing a new international framework on drug pricing. They had been asked by the Chairman to try to find a way to “protect our patents abroad but also demonstrate flexibility and compassion with respect to public health crises in the developing world.” Kindler and Barton’s letter to Baucus provides a rough outline of a framework to try to meet this goal. Under their plan, developed nations would generally accept higher prices, the poorest countries would be more-or-less exempt from strict enforcement of IP, and middle-income countries would segment their markets. They are convening a closed, off-the-record meeting in DC with invited stakeholders to further develop it in February.

Although there are few details, Kindler and Barton’s rough proposal may raise some concerns. Last week, I posted a blog about possible risks to US state Medicaid programs that negotiate discounted pharmaceutical prices for low-income Americans.

I would now like to point out a part of the proposal that seems to call for developed countries to pay higher prices for the medicines they buy for use in developing countries. The letter states:

Developed-world nations would commit themselves to develop detailed mechanisms to ensure that their government pharmaceutical purchasing authorities pay an adequate price to encourage research and also that as donors, they pay a price adequate to cover an appropriate share of research costs for their purchases of new products of primary value to developing nations. [Emphasis added]

This could be interpreted in various ways, but it seems to imply that programs like PEPFAR, UNITAID, and the Global Fund ought to pay higher prices for medicines.

 

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