Articles of Faith

By David Kopel, Carlo Stagnaro, and Alberto Mingardi., July 23, 2004.

Why are children in Africa dying of AIDS? It's the "genocidal action of the drug cartels" claims Jesuit Priest Angelo D'Agostino. In fact, D'Agostino's mean-spirited accusation is a good example of the ignorant anti-freedom mentality which has caused so much suffering in Africa.

D'Agostino is founder and medical director of "Nyumbani," the Children of God Relief Institute of Nairobi, Kenya. Nobody questions his sincerity, but his judgement is terrible.According to D'Agostino, the reason that AIDS is a killer in Africa is "the genocidal action of the drug cartels who refuse to make the drugs affordable in Africa even after they reported a $517 billion profit in 2002. This is a moral issue that shows the lack of social conscience by these capitalistic enterprises, which could easily save the lives of the 25 million sub-Saharan Africans who are HIV+ and otherwise doomed. How will we as Christians explain this silence on our part some 50 years from now?"

In truth, the entire 2002 global pharmaceutical market for all drugs, generic and proprietary, was about US $451 billion (Source: Medical and Healthcare Marketplace Guide; IMS; Bain Analysis).

It is obviously impossible that the drug companies could have profits larger than their gross sales. Either the pharmaceutical companies are the Harry Potter of the market, using a magic wand to multiply profits out of thin air, or Fr. D'Agostino's data are flawed. The "517 billion" factoid is circulated by the Socialist Part of Sweden but it has no basis in reality.

Rather than letting himself be used as a pawn by people who want to use the AIDS crisis as an occasion to disseminate falsehoods about capitalism, Father D'Agostino should have checked the facts before condemning the drug industry's allegedly "criminal" selfishness.

In truth, pharmaceutical companies are offering HIV drugs to Africa by donation, or at very steep discounts.

For example, in Kenya nevirapine (which is intended to prevent mother-child transmission) is offered free of charge by Boehringer Ingelheim. Pfizer is donating Diflucan to treat HIV related disorders. Merck is offering its two HIV medicines at "no profit" prices. One of the Merck drugs, Stocrin, being sold for 30% below the best copycat competitor. The price is so low that in Kenya, the anti-globalization group Doctors Without Borders and Father D'Agostino's own orphanage have decided to purchase from Merck.

Six leading pharmaceutical companies are working together in the Accelerating Access Initiative, which is a partnership of five United Nations organizations and industry. As December 2003, the Initiative had supplied treatment to over 150,000 people in Africa.

In combined donations, the pharmaceutical companies are giving more money to AIDS charity in Africa than many European/OECD governments are giving in annual aid for AIDS to Africa!

It is hideously irresponsible for Father D'Agostino to point the finger of "genocide" at companies that save so many lives every day, and give away their products so generously -- never mind that they invented the medicines in the first place.

If the companies are so generous, then why so many people in Africa and other poor nations still unable to afford drugs? One reason is Third World governments' rapacity. For example, South Africa imposes a 14% Value Added Tax on all medicines, including AIDS drugs; Ethiopia imposes a 30% import duty on medicine (although this has been recently dropped for HIV medicines); Ghana, Senegal, and Tanzania impose 10% customs on imported medicines. Kleptocracy being the standard form of government in Africa, only a small share of the money with governments raise by taxing medicine ever goes to help suffering people.

As Africa Fighting Malaria director Richard Tren puts it, "Africans are ill, unable to receive medical treatment and short of food because most African governments have kept people poor, frustrated trade and interfered with markets. By increasing economic freedom and enabling the private sector to thrive, Africa will be able to create the wealth that can build health infrastructure."

In other words, the main reason that many Africans cannot afford medicine is not because they do not work hard, or because their nation lacks natural resource. Rather, the main cause of African poverty is thieving African governments.

Father D'Agostino and the rest of the anti-globalization crowd are so fixated on their hatred of capitalism that they refuse to acknowledge the very obvious charity of the pharmaceutical companies. Instead of defaming the companies which invent and donate life-saving drugs, Father D'Agostino ought to be calling for reform of the abusive taxes in the Third World. Why should the notoriously corrupt third world kleptocracies impose hefty import taxes on the drugs which citizens need to survive? If there's a problem with greed, the malfeasants are corrupt finance ministers, not the pharmaceutical companies.

The Catholic Church, perhaps the institution in the world most concerned with the fate of the poor, should fight import taxes on drugs, for these taxes are a primary enemy of the world's most desperate people.

Dave Kopel is Research Director of the Independence Institute.
Alberto Mingardi is a Director of the Milan-based think tank  Istituto Bruno Leoni, and a fellow of the Brussels-based  Centre for the New Europe. Carlo Stagnaro is a Director of the Istituto Bruno Leoni, and a fellow of the  International Council for Capital Formation.

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