As the HIV/AIDS epidemic has spread from wealthy nations to poor ones, especially in sub-Saharan Africa, the pharmaceutical industry has received an extraordinary volume of criticism of the prices and patents of the HIV drugs that can delay the onset of AIDS. However, HIV drugs are by no means the only topic of criticism in recent years. Controversy has extended to prices in the United States, international price disparities among wealthy nations (which has led to proposals to import drugs at foreign government-controlled prices; see Wilson 2004), marketing and promotion, and research priorities (Angell 2004; Goozner 2004). Such criticism is hardly new. The 1962 amendments to the Food, Drug, and Cosmetic At, which greatly expanded the Food and Drug Administration (FDA) regulation and revolutionized drug development, followed on high-profile Senate hearings that were highly critical of pharmaceutical research, pricing, and promotion. A report for the U.S. Department of Health, Education, and Welfare (1968; predecessor to the Department of Health and Human Services) listed, in vivid terms, a series of criticisms that would sound familiar today (see also Journal of Research in Pharmaceutical Economics 2001).

However, international HIV drug prices and patents have probably generated the most bitter criticisms to date, bringing serious threats to the industry's foundations, including intellectual property. This wide-ranging debate has generated proposals to fundamentally transform the pharmaceutical industry. To some extent, these ideas focus on public policy toward patents, prices, government reimbursement, and so on.

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Roger Bate is a visiting fellow at AEI. John E. Calfee is a resident scholar at AEI.