The companies do this for the good public relations, but they also strike deals with charities that will handle the shipping and distribution costs.
From Bloomberg Businessweek, writers Simeon Bennett and Tom Randall explain the new distribution of drugs into the under-developed world.
Pharmaceutical companies, once blasted as uncaring or downright greedy for charging thousands of dollars for a year's worth of AIDS medicines like Viread in poor countries, lately have been slashing prices and licensing their drugs for free or nominal cost to nonprofits or local manufacturers in the developing world. Activists say the largesse is in part an attempt to avoid a repeat of the public-relations backlash the companies received a decade ago after initially pricing the drugs at levels only patients in the West could widely afford.
Also, a network of aid agencies and local manufacturers is now in place to handle production and distribution of the compounds—something many Western companies don't want to handle themselves because of the cost and transportation hassles. "It's a pretty remarkable" shift, says Mitchell Warren, a New York AIDS activist, noting that 10 years ago drugmakers argued that the infected in Africa couldn't be trusted to properly take complicated drug regimes at any price. Two years ago, Pfizer (PFE) granted a free license to a nonprofit group to develop the company's AIDS drug, Selzentry, for use in another experimental gel. Last month a GlaxoSmithKline (GSK) affiliate said it will give away licenses to some of the AIDS drugs it's developing in 60 of the world's least-developed nations where 80 percent of people with HIV live.
At the AIDS meeting in Vienna, Unitaid, another nonprofit, said it is discussing the creation of a "patent pool" with Gilead, Merck (MRK), and Johnson & Johnson (JNJ) to license drugs in development to generic makers who could sell medicines at lower prices than possible for the large companies. "We're talking about the how rather than the whether" companies will participate, said Ellen 't Hoen, Unitaid's executive director.