Essay on Drug Companies

1741 Words Nov 6th, 2012 7 Pages

The AIDS epidemic in South Africa is at an extreme where 4.2 million of the country’s 43 million citizens are afflicted. This translates into one in every ten citizens being infected with the virus. Additionally 34 million Sub Saharan African citizens have been afflicted and 11.5 million have died and that total accounts for 83% of the world’s AIDS related deaths.
Treatment is available in the form of an anti-retroviral, but it is very costly and as such unaffordable for the already impoverished nations in Africa. The AIDS crisis and the expensive treatment have caused the government of South Africa to pass laws authorising
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It is very important for drug companies to protect their patents because it prevents infringement on their right to become innovative in the production process. Additionally it serves as protection from competitive firms or any other entity that may choose to sell, duplicate or trade their products without consent. This was shown in the case when the government of South Africa violated the international patent protection laws by enacting national laws which allowed for the sourcing of the product through the cheapest supplier without the patent holder’s consent.

The policy of drug companies towards the pricing of patent-protected drugs for AIDS in poor developing countries such as South Africa should be based on a system of “Preferential Pricing”. This can be accomplished using a formula that makes pricing compatible with the economic state of developing countries i.e. using a system of pricing that is in-direct correlation to the economic position of developing nations.
Preferential pricing means that the price at which the big pharmaceutical companies sell their drugs is calculated using formulas based on the average income per capita, leading to lower prices in poor countries.
Preferential pricing is the only way pharmaceutical companies can meet both conflicting needs in the fight against AIDS. This system of pricing will help pharmaceutical companies refinance the high cost of research and development for

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