Through his hallowed foundation, the world’s de facto public health czar has been a stalwart defender of monopoly medicine.
by Alexander Zaitchik
Part 5 - Gates defused the real issue of decolonizing global health
By 1999, Bill Gates was in his final year as CEO of Microsoft, focused on defending the company he founded from antitrust suits on two continents. As his business reputation suffered high-profile beatings from U.S. and European regulators, he was in the process of moving on to his second act: the formation of the Bill & Melinda Gates Foundation, which commenced his unlikely rise to the commanding apex of global public health policy. His debut in that role occurred during the contentious fifty-second General Health Assembly in May 1999.
It was the height of the battle to bring generic AIDS drugs to the developing world. The central front was South Africa, where the HIV rate at the time was estimated as high as 22 percent and threatened to decimate an entire generation. In December 1997, the Mandela government passed a law giving the health ministry powers to produce, purchase, and import low-cost drugs, including unbranded versions of combination therapies priced by Western drug companies at $10,000 and more. In response, 39 drug multinationals filed suit against South Africa alleging violations of the country’s constitution and its obligations under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS. The industry suit was backed by the diplomatic muscle of the Clinton administration, which tasked Al Gore with applying pressure. In his 2012 documentary Fire in the Blood, Dylan Mohan Gray notes it took Washington 40 years to threaten apartheid South Africa with sanctions and less than four to threaten the post-apartheid Mandela government over AIDS drugs.
Though South Africa barely registered as a market for the drug companies, the appearance of cheap generics produced in violation of patents anywhere was a threat to monopoly pricing everywhere, according to the drug industry’s version of Cold War “domino theory.” Allowing poor nations to “free ride” on Western science and build parallel drug economies would eventually cause problems closer to home, where the industry spent billions of dollars on a propaganda operation to control the narrative around drug prices and keep the lid on public discontent. The companies suing Mandela had devised TRIPS as a long-term strategic response to the south-based generics industry that arose in the 1960s. They had come too far to be set back by the needs of a pandemic in sub-Saharan Africa. U.S. and industry officials paired old standby arguments about patents driving innovation with claims that Africans posed a public health menace because they couldn’t keep time: Since they could not be relied on to take their medicines on a schedule, giving Africans access to the drugs would allow for the emergence of drug-resistant HIV variants, according to industry and its government and media allies.
In Geneva, the lawsuit was reflected in a battle at the WHO, which was divided along a north-south fault line: on one side, the home countries of the Western drug companies; on the other, a coalition of 134 developing countries (known collectively as the Group of 77, or G77) and a rising “third force” of civil society groups led by Médecins Sans Frontières and Oxfam. The point of conflict was a WHO resolution that called on member states “to ensure equitable access to essential drugs; to ensure that public health interests are paramount in pharmaceutical and health policies; [and] to explore and review their options under relevant international agreements, including trade agreements, to safeguard access to essential drugs.”
Western countries saw the resolution as a threat to the recent conquest of monopoly medicine, achieved four years earlier with the establishment of the WTO. The industry grew increasingly helpless, however, as global public opinion and WHO member-state sentiment shifted in favor of the resolution and against the South Africa lawsuit. In the weeks leading up to the assembly, the companies and their parent embassies floundered as they sought to turn the tide. Their growing anxiety is captured in a series of leaked cables sent to Washington by the U.S. ambassador in Geneva, George Moose, that April and May. In a diplomatic telegram dated April 20, Moose expressed alarm over the growing number of WHO delegations making
STATEMENTS THAT PUBLIC HEALTH SHOULD HAVE PRIMACY OVER COMMERCIAL INTERESTS UNDER WTO TRADE AGREEMENTS SUCH AS THE TRIPS (TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS) … THEREBY POTENTIALLY UNDERMINING INTELLECTUAL PROPERTY RIGHTS (IPR).
Moose was concerned that drug companies were not helping their own cause and seemed incapable of doing anything but parrot old talking points about intellectual property as the driver of innovation. The pharmaceutical industry, Moose wrote,
SHOULD BE CARRYING MORE OF ITS OWN WATER ON THIS ISSUE, ESPECIALLY IN DEVELOPING COUNTRIES, AND NOT SOLELY DEPEND ON THE ARGUMENT THAT IPR PROTECTS PROFITS THAT THEN ARE USED FOR DEVELOPMENT OF NEW DRUGS IN THE FUTURE. NOT 10 YEARS FROM NOW. THE SOUTH AFRICANS AND OTHERS ARE MOSTLY CONCERNED ABOUT AVAILABILITY OF DRUGS NOW. PROBLEMS RELATED TO LOCAL AVAILABILITY AND PRICING OF DRUGS THAT ARE UNRELATED TO TRIPS WILL UNDOUBTABLY REQUIRE FURTHER DISCUSSION.
Over the course of weeks, a picture emerges from Moose’s accounts of a pharmaceutical industry against the ropes, punch drunk and out of ideas. In the U.S. ambassador’s view, the problem wasn’t moral bankruptcy so much as incompetence. “RECOMMEND THE USG PUSH THE PHARMACEUTICAL INDUSTRY TO ARGUE ITS POINTS MORE CONVINCINGLY IN DEVELOPING COUNTRIES,” the exasperated ambassador wrote. “AND ESPECIALLY DEAL WITH THEIR CONCERNS ABOUT LOCAL DRUG AVAILABILITY AND PRICING.”
Following the raucous buzz saw of the 1999 WHO Assembly, the drug companies would make a humiliating climbdown from their scandalous lawsuit in South Africa, reduced to what The Washington Post called “close to pariah status.”
At the same time, the industry was richer than ever. The Clinton administration had approved a long Big Pharma wish list, from broadening the avenues for privatizing government-funded science to opening the age of direct marketing of prescription drugs. The corresponding profits went to reinforce already historically rich D.C. and Geneva lobbying operations. And yet, for all their combined might, the companies were incapable of producing a mask resembling a credible human face. A global activist movement continued to gather public opinion on its side and chip away at the legitimacy of the monopoly model that underlay the industry’s enormous power. By every nonfinancial measure, it was an industry in distress. To borrow a phrase from a future Bill Gates production, you might say it was waiting for its Superman.
When Moose was ringing the alarm over the future of TRIPS in the spring of 1999, Gates was preparing to fund the launch of a public-private partnership called Gavi, the Vaccine Alliance, with a seed grant of $750 million, marking his arrival in the worlds of infectious disease and public health. At the time, he was still best known for being the richest man in the world and the owner of a software company engaged in anti-competitive practices. This profile didn’t mean much in a raucous WHO Assembly hall packed with civil society groups and G77 delegations, which together booed the U.S. delegation when it tried to speak. At most, it was a source of brief consternation when officers from the William H. Gates Foundation began distributing a glossy brochure touting the role of intellectual property in driving biomedical innovation.
James Love, who organized many of the civil society events around the 1999 Assembly, remembers seeing the Gates staffers joined in the distribution effort by Harvey Bale, a former U.S. trade official serving as director general of the International Federation of Pharmaceutical Manufacturers Associations.
“It was this nice full-color pamphlet about why patents don’t present an access problem, with the Gates Foundation logo at the bottom,” says Love. “It was strange, and I just thought, ‘OK, I guess this is what he’s doing now.’ Looking back, that’s when the pharma-Gates consortium set the markers down on intellectual property. He’s been sticking his nose into every intellectual property debate since, telling everyone they can go to heaven by paying lip service to a few discounts to poor countries.”
“It was this nice full-color pamphlet about why patents don’t present an access problem, with the Gates Foundation logo at the bottom,” says Love. “It was strange, and I just thought, ‘OK, I guess this is what he’s doing now.’ Looking back, that’s when the pharma-Gates consortium set the markers down on intellectual property. He’s been sticking his nose into every intellectual property debate since, telling everyone they can go to heaven by paying lip service to a few discounts to poor countries.”
Following the 1999 WHO Assembly, the industry tried to salvage its reputation by offering African countries discounts on the antiretroviral combination therapies that cost $10,000 or more in rich countries. The compromise prices it offered were still outrageously high, but even raising the issue of price concessions was too much for Pfizer, whose representatives stormed out of the industry coalition on principle. Public opinion swung harder against the companies, the result of a loud, ingenious, and effective direct-action campaign. Similar to the first months of the Covid-19 pandemic, there was a sense of possibility—a hope that a forced breakdown of a morally obscene and bloodstained system was within grasp.
“The movement was very focused and successfully building pressure for structural, more decisive solutions into the aughts,” says Asia Russell, a veteran HIV-AIDS activist and director of Health Gap, an HIV medicines access group. “And just when we started to secure some progress, a new version of the industry narrative emerged from Gates and Pharma. It was all about how pricing policies, generic competition, anything that interferes with industry profits, will undermine research and development, when the evidence shows that that argument doesn’t hold water. Gates’s talking points aligned with those of the industry.”
Adds Manuel Martin, the Médecins Sans Frontières policy adviser, “Gates defused the real issue of decolonizing global health. Instead, drug companies could just give money to his institutions.”
Even after the drug companies withdrew their lawsuit against the South African government and Indian-made generics began flowing to Africa, Gates stayed cool toward compromises that he saw as threats to the intellectual property paradigm. This included his attitude toward the Unitaid Medicines Patent Pool, a voluntary intellectual property pool founded in 2010 that enlarged access to some patented HIV/AIDS medicines. Though not a complete answer to the problem, the MPP was the first working example of a voluntary intellectual property pool, one that many observers expected to serve as a model framework for the WHO-administered Covid-19 pool.
Even after the drug companies withdrew their lawsuit against the South African government and Indian-made generics began flowing to Africa, Gates stayed cool toward compromises that he saw as threats to the intellectual property paradigm. This included his attitude toward the Unitaid Medicines Patent Pool, a voluntary intellectual property pool founded in 2010 that enlarged access to some patented HIV/AIDS medicines. Though not a complete answer to the problem, the MPP was the first working example of a voluntary intellectual property pool, one that many observers expected to serve as a model framework for the WHO-administered Covid-19 pool.
Brook Baker, a law professor at Northeastern University and senior policy analyst for Health GAP, says Gates has always been wary of the Unitaid pool as going too far in the direction of infringing on intellectual property.
“Initially, Gates was unsupportive and even hostile toward the AIDS Medicines Patent Pool,” says Baker. “He brought that hostility to relaxing industry’s iron-fist control over its technologies into the pandemic. His explanation for rejecting models to counteract this control never added up. If I.P. isn’t important, why are companies refusing to voluntarily give it up when it could be used to expand supply in the middle of the world’s worst public health crisis in a century? It’s not important, or it’s so important it has to be closely guarded and protected. You can’t have it both ways.”
“Initially, Gates was unsupportive and even hostile toward the AIDS Medicines Patent Pool,” says Baker. “He brought that hostility to relaxing industry’s iron-fist control over its technologies into the pandemic. His explanation for rejecting models to counteract this control never added up. If I.P. isn’t important, why are companies refusing to voluntarily give it up when it could be used to expand supply in the middle of the world’s worst public health crisis in a century? It’s not important, or it’s so important it has to be closely guarded and protected. You can’t have it both ways.”
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