Merck Seeks Wider Coalition on Aids

US pharmaceutical Merck is following in the foot steps of other multi-national corporations like Anglo-American and DeBeers, who have decided to provide anti-retroviral drugs used to combat HIV/Aids to their workers. While Merck has partnered with Botswana and the Bill and Melinda Gates Foundation to provide treatment, the company’s chief executive is calling for a “larger coalition” of UN agencies, governments, and large companies to fight the Aids pandemic. With over 20% of its workforce infected with HIV/Aids, and lacking adequate funds to purchase the necessary treatments, many southern African nations have turned to multi-national corporations for help. Without doubt, corporations wish to forestall an economic crisis arising from a sudden decline in the workforce due to Aids. Yet, it raises the question of proper governance. If countries can’t provide for their people, how far into the political sphere should corporations tread? – YaleGlobal

Merck Seeks Wider Coalition on Aids

James Lamont
Thursday, September 12, 2002

Merck, the US pharmaceutical company, this week called for the strengthening of a private sector coalition to fight the HIV/Aids pandemic ravaging southern Africa.

Merck is working with the authorities in Botswana and the Bill and Melinda Gates Foundation to support the health service there. But now Ray Gilmartin, the company's chief executive, has called for a "larger coalition" of United Nations agencies, pharmaceutical companies, large employers and governments to confront the crisis in the region.

Southern Africa has the highest HIV/Aids infection rates in the world, with more than 20 per cent of its economically active population HIV positive. The illness, whose death toll is expected to peak within the next 10 years, will retard economic growth and deepen poverty in a region where human development indicators in many countries are in reverse.

Governments in the region complain that they cannot afford costly treatments to prolong the lives of sufferers and do not have the infrastructure to support their use. The South African government fought a court case last year against the pharmaceutical industry to secure greater access to cheaper generic drugs, but it has resisted making anti-retroviral drugs widely available through its health service.

The private sector is beginning to fill the gap. Large companies, such as Anglo-American and De Beers mining groups and Old Mutual financial services group, are negotiating with international drug companies over the provision of anti-retroviral drugs to their workforces.

Speaking in Botswana, Mr Gilmartin a called for a "constructive partnership" to fight HIV/Aids. "We need to build up the level of resources through a larger coalition. I think people are welcoming their [private sector] involvement in areas [traditionally] of government activity. They welcome companies doing something."

Merck is giving free anti-retroviral drugs to Botswana in addition to a grant of $50m over five years to combat the country's adult HIV rate of 38.5 per cent.

Mr Gilmartin acknowledged that public health services in southern Africa were unable to afford anti-retroviral drugs at cost prices offered by Merck. A comprehensive anti-retroviral treatment costs about $2,390 a person a year.

But the US company hopes the Botswana experiment will convince other governments to strike alliances with charitable organisations, drugs companies and local corporations. The price of drugs is expected to fall in the coming years, while research is under way to find a vaccine against HIV/Aids. "We are trying to create a model that other countries in the region can look to," said Mr Gilmartin.

The Botswana government considers its model far from perfect. President Festus Mogae said his country did not have the skills required to care for an estimated 300,000 HIV/Aids sufferers. Private contributions and the health budget covered only a fraction of the target population, he said.

The roll-out of treatment, first announced in August last year, has been slower than expected, with only about 2,000 people enrolled so far.

© Copyright The Financial Times Limited 2002.