Loans to Buy AIDS Drugs Are Rejected by Africans
New York Times, August 22, 2000
By RACHEL L. SWARN
JOHANNESBURG, Aug. 21 – The United States' offer of $1 billion in annual loans to finance the purchase of anti-AIDS drugs in sub-Saharan Africa has been rejected by South Africa, one of the countries most devastated by the disease, health officials say. Namibia has also rejected the offer, and other nations in this stricken region are voicing serious reservations, the officials say.
South Africa, the nation with the largest number of people infected with the virus that causes AIDS, and Namibia said they needed affordable drugs, not loans that would burden their economies.
Officials at the Southern African Development Community, which represents 12 other countries in the region, along with South Africa and Namibia, are also expressing doubts about the proposal. They say they would prefer the United States pressure American drug companies to reduce prices and to support countries that are disregarding patents and producing generic drugs more cheaply.
"Members are already burdened by debt," said Dr. Thuthula Balfour, director of the health unit of the Southern African Development Community, in a telephone interview from Pretoria. "Making drugs affordable is the solution rather than offering loans that have interest."
The offer last month by the United States Export-Import Bank, an independent government agency financed by Congress, was made to 24 sub-Saharan countries. Bank officials said that none of the countries had formally accepted the offer so far. The officials, who emphasized that it was too early to assess interest in the program, said they were still educating eligible African nations about the program.
But even when the program was announced, officials acknowledged that some members of the Clinton administration had doubts about its benefits. The offer comes at a time when the West is seeking to forgive as much as $100 billion of the debt held by poor countries, hoping to free up scarce resources for health, education and other social programs in those nations.
Marsha Berry, a spokeswoman for the Export-Import Bank, said bank officials knew of South Africa's concerns. She said they understood these concerns and the hesitancy expressed by officials elsewhere.
"These are poor countries and should they be taking on more debt? That's a very valid question," she said in a telephone interview from Washington.
"We're just doing what we can, knowing it's a small part," Ms. Berry said. "We have not got anyone to sign on the line yet. But it's going to take a couple of months of working through these touchy details."
Third world nations have been pressuring the West and pharmaceutical companies to make costly anti-AIDS therapies more accessible. Earlier this year, Unaids, the United Nations agency dealing with AIDS, and five drug companies began negotiating steep drops in prices of the drugs for poor regions afflicted by the disease.
But some AIDS groups argue that the companies are lowering prices simply to forestall the seizure of their patents by poor countries desperate for the drugs. Thailand and South Africa have recently passed laws allowing such seizure; India, Bangladesh and Brazil have drug industries that ignore patent treaties.
In May, the Clinton administration angered the pharmaceutical industry by issuing an executive order saying the government would not interfere with African countries that violated American patent law to obtain cheaper AIDS drugs.
In South Africa, where about four million people are infected with the virus that causes AIDS, health officials say such efforts, which support the production and distribution of generic drugs, are more useful than loan programs, said Nothemba Dlali, a spokeswoman for the Ministry of Health.
Dr. Kalumbi Shangula, the permanent secretary for the Namibian Ministry of Health, agreed. He said his country simply could not afford the drugs. In the United States, an American patient might spend $12,000 a year or more on drug therapy, a price tag way out of reach for patients in poor African countries.
The Export-Import Bank offers loans to buy the drugs at commercial interest rates that now average about 7 percent. But health officials in Namibia are desperately searching for other ways to get drug therapy to their infected citizens, who make up an estimated 20 percent of that country's population.
"When you take loans, you are plunging the country deeply into debt," Dr. Shangula said. "We are actually looking for ways to acquire the anti-retroviral drugs to improve the quality of life of our people, but this does not offer the solution."