The leaders of the G8 meet this weekend in St. Petersburg (aka Leningrad aka Petrograd) and they were supposed to announce a business-friendly scheme to get drug companies to make vaccines for the developing world. Looks like it isn’t going to happen, though, because the US and France are arguing over whether the US will back a French proposal for an international airline ticket tax to pay for aid to poor countries (Wall Street Journal). Germany and Japan are also balking at contributing to the plan, so there it sits, despite former claims of support by all parties:
The situation marks a sharp reversal for the initiative. The proposal appeared to be on the fast track in February when G-8 finance ministers, including then-Treasury Secretary John Snow, endorsed the idea. At that time, the ministers expected to agree by April on a pilot project to tackle at least one deadly infectious disease.
That meeting led to creation of a panel of experts, who recommended that the first advance market commitment be used to promote development of a vaccine for pneumococcal disease. According to the World Health Organization, the bacterial infection killed 1.6 million people in 2002, 716,000 of them under the age of 5. The panel suggested that the approach could help generate a vaccine for malaria, which kills one million people a year, but predicted that it would take longer than a pneumococcus vaccine.
G-8 officials say that drug companies, although initially skeptical, have rallied behind the idea. “They’re ready to give this a go,” said the official familiar with the G-8 discussions. (WSJ)
The problem is an old one. Drug companies don’t want to make products for people who can’t afford them — more than not affording them, who can’t afford to pay prices that will guarantee an obscene profit for Big Pharma. So the G-8 countries would guarantee a subsidy in exchange for an agreement the company would produce a vaccine to meet specified safety and efficacy standards. When the subsidy was spent, the vaccine would be sold to the developing world at sharp discounts.
The French proposal is complementary, financing it with an airline ticket tax. The French have themselves begun by imposing a one Euro tax on their own domestic coach tickets, ten Euros on First and Business Class to pay for AIDS drugs in poor countries. They say they have convinced thirteen other countries to follow suit, but the US is refusing, as is Japan. No new taxes, you know. Imagine what the Republican base could do with taxes to pay for AIDS drugs. So the French turned around and blocked the US backed subsidy plan.