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[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

    WHAT IS THE U.S. ROLE IN COMBATING THE GLOBAL HIV/AIDS EPIDEMIC?

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON CRIMINAL JUSTICE,
                    DRUG POLICY, AND HUMAN RESOURCES

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 22, 1999

                               __________

                           Serial No. 106-126

                               __________

       Printed for the use of the Committee on Government Reform

  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                                 ______

                     U.S. GOVERNMENT PRINTING OFFICE
65-308 CC                    WASHINGTON : 2000

                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH, Idaho                   (Independent)
DAVID VITTER, Louisiana

                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                      Carla J. Martin, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

   Subcommittee on Criminal Justice, Drug Policy, and Human Resources

                    JOHN L. MICA, Florida, Chairman
BOB BARR, Georgia                    PATSY T. MINK, Hawaii
BENJAMIN A. GILMAN, New York         EDOLPHUS TOWNS, New York
CHRISTOPHER SHAYS, Connecticut       ELIJAH E. CUMMINGS, Maryland
ILEANA ROS-LEHTINEN, Florida         DENNIS J. KUCINICH, Ohio
MARK E. SOUDER, Indiana              ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio           JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
DOUG OSE, California

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                Sharon Pinkerton, Deputy Staff Director
              Steven Dillingham, Professional Staff Member
                Mason Alinger, Professional Staff Member
                    Cherri Branson, Minority Counsel
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 22, 1999....................................     1
Statement of:
    Berry, Hon. Marion, a Representative in Congress from the 
      State of Arkansas..........................................    71
    Herman, Allen, dean of public health, Medical University of 
      Southern Africa; James Love, director, Consumer Project on 
      Technology; Peter Lurie, medical director, Public Citizen's 
      Health Research Group; Eric Sawyer, executive director of 
      HIV Human Rights Project, Act Up, New York; and John 
      Siegfried, senior medical officer, Pharmaceutical Research 
      and Manufacturers of America...............................   139
    Jackson, Hon. Jesse, Jr., a Representative in Congress from 
      the State of Illinois......................................    22
    Nkhoma, Chatinka C., Malawi citizen..........................    76
    Thurman, Sandra, Director, Office of National AIDS Policy, 
      the White House; Joseph Papovich, Assistant U.S. Trade 
      Representative, Services, Investment & Intellectual 
      Property, U.S. Trade Representative; John Killen, Director, 
      Division of AIDS, National Institute of Allergy and 
      Infectious Diseases, National Institutes of Health; and 
      Timothy Dondero, Chief of the International Activities 
      Branch, Division of HIV/AIDS Prevention, Centers for 
      Disease Control and Prevention.............................    92
Letters, statements, et cetera, submitted for the record by:
    Berry, Hon. Marion, a Representative in Congress from the 
      State of Arkansas, prepared statement of...................    73
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    19
    Dondero, Timothy, Chief of the International Activities 
      Branch, Division of HIV/AIDS Prevention, Centers for 
      Disease Control and Prevention, prepared statement of......   125
    Herman, Allen, dean of public health, Medical University of 
      Southern Africa, prepared statement of.....................   143
    Jackson, Hon. Jesse, Jr., a Representative in Congress from 
      the State of Illinois, prepared statement of...............    26
    Killen, John, Director, Division of AIDS, National Institute 
      of Allergy and Infectious Diseases, National Institutes of 
      Health, prepared statement of..............................   114
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................    15
    Love, James, director, Consumer Project on Technology, 
      prepared statement of......................................   150
    Lurie, Peter, medical director, Public Citizen's Health 
      Research Group, prepared statement of......................   177
    McDermott, Hon. Jim, a Representative in Congress from the 
      State of Washington, prepared statement of.................   219
    Mica, Hon. John L., a Representative in Congress from the 
      State of Florida:
        Prepared statement of....................................     6
        Prepared statement of Mrs. Christenson...................   221
        Prepared statement of Doctors without Borders............   223
    Nkhoma, Chatinka C., Malawi citizen, prepared statement of...    79
    Papovich, Joseph, Assistant U.S. Trade Representative, 
      Services, Investment & Intellectual Property, U.S. Trade 
      Representative, prepared statement of......................   108
    Sanders, Hon. Bernard, a Representative in Congress from the 
      State of Vermont, prepared statement of....................   233
    Sawyer, Eric, executive director of HIV Human Rights Project, 
      Act Up, New York, prepared statement of....................   186
    Siegfried, John, senior medical officer, Pharmaceutical 
      Research and Manufacturers of America, prepared statement 
      of.........................................................   193
    Thurman, Sandra, Director, Office of National AIDS Policy, 
      the White House, prepared statement of.....................    95
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................   235

 
    WHAT IS THE U.S. ROLE IN COMBATING THE GLOBAL HIV/AIDS EPIDEMIC?

                              ----------                              

                        THURSDAY, JULY 22, 1999

                  House of Representatives,
Subcommittee on Criminal Justice, Drug Policy, and 
                                   Human Resources,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 11:30 a.m., in 
room 2154, Rayburn House Office Building, Hon. John L. Mica 
(chairman of the subcommittee) presiding.
    Present: Representatives Mica, Gilman, Mink, Cummings, and 
Kucinich.
    Also present: Representatives Lantos, Norton, Schakowsky, 
and Sanders.
    Staff present: Sharon Pinkerton, deputy staff director; 
Steven Dillingham and Mason Alinger, professional staff 
members; Cherri Branson, minority counsel; and Jean Gosa, 
minority staff assistant.
    Mr. Mica. Good morning, I would like to call this meeting 
of the Subcommittee on Criminal Justice, Drug Policy, and Human 
Resources to order.
    Today's hearing is entitled, What Is the U.S. Role in 
Combating the Global HIV/AIDS Epidemic?
    We will start this morning's hearing, as usual, with 
opening statements. I will give my opening statement, present a 
brief video, and then yield to members on our panel. We will 
then hear from our first panel of witnesses.
    We will be joined shortly by our ranking member, but we 
would like to proceed, because we have a full schedule today.
    Today, this subcommittee will address an issue that is 
unequalled in both its complexity and its urgency. That is, the 
global HIV/AIDS epidemic, and the role of the United States in 
combating this terrible affliction. This growing problem is 
both a trade issue, a health issue, and most certainly a 
humanitarian issue that we cannot ignore.
    Our subcommittee was recently reconstituted and vested with 
oversight of health and trade issues. We are committed to 
understanding both the nature and magnitude of this epidemic, 
and also to ensure the proper role of the U.S. Government in 
combating this disease.
    Recently, we held a hearing on another terrible infectious 
disease, hepatitis B, and the importance of vaccines and 
properly designated vaccination policies in combating 
infections and meeting the health concerns of our citizens.
    Today and in the future, this subcommittee will perform its 
oversight responsibility, examining health-related programs and 
practices that are both promising and also that will save 
lives.
    As we will hear today, the AIDS epidemic is global and 
horrific. It continues to spread across the globe unabated. We 
will learn that no area of the world has been harder hit than 
the continent of Africa, particularly sub-Saharan Africa, where 
two-thirds of the world's infected population resides.
    Other continents and regions are also at risk today. 
Witnesses will tell us firsthand of the devastating impact of 
the epidemic in Africa, including economic, health, and 
humanitarian consequences. They will reveal some of the 
terrible consequences to themselves and their loved ones.
    We will also hear about recent developments in vaccine 
research and its hopefully not-so-distant potential for 
preventing the spread and transmission of HIV/AIDS. Recent 
studies show that women are now being infected at a greater 
rate than men. I am encouraged by recent press accounts that a 
new, more affordable drug is being developed which may 
significantly reduce the incidence of AIDS transmission from an 
infected mother to her unborn child.
    But a question still remains: What are we going to do to 
make certain these new drugs are available to developing 
countries that need them? Tragically, there are nearly 600,000 
African babies newly infected each year; 9 out of every 10 
infants infected with HIV at birth or through breast-feeding 
live in sub-Saharan Africa.
    This hearing will also focus on the critical and 
complicated issues of drug treatment for HIV and AIDS. How can 
we treat such a large and growing population? The World Health 
Organization and affiliated organizations recently announced 
that AIDS kills more people worldwide than any other infectious 
disease. Imagine, in less than two decades, AIDS has become the 
leading killer out of all known infectious diseases.
    As you can see in the chart we have prepared, and I think 
it is right over here, more than 33.4 million adults and 
children are estimated to be infected with HIV/AIDS. This 
disease has already killed 14 million people. Of those, 
approximately 12 million, almost all are African.
    Today, more than 22.5 million Africans are living with HIV/
AIDS. Reportedly, 95 percent of Africans with AIDS have not 
been tested, and 90 percent are unaware that they even have the 
disease. The tragedy resulting from this killer disease in 
Africa is almost inconceivable.
    Zambia, for instance, has one of Africa's largest orphan 
populations. In 1990, it was home to approximately 20,000 
orphans. By next year, the number is estimated to reach a 
staggering 500,000. Zimbabwe, a nation of 12 million citizens, 
reports 600,000 orphans, most being supported by grandparents 
or other relatives. Uganda, with a population of 20 million 
people, 10 percent of whom are now HIV-positive, also reports 
600,000 children having lost at least one parent, and about a 
quarter of a million children having already lost both parents.
    Today, we will hear testimony from a mother in an African 
nation, Malawi, where 20 percent of the population is HIV-
positive, and life expectancy has dropped to below 40 years of 
age.
    These numbers are devastating, and the personal tragedies 
unimaginable. AIDS now infects 6 million people annually around 
the world, and the number continues to climb. This Nation, 
which leads the world in science and technology, as well as 
world trade, must address two important issues: What are we 
doing about this global epidemic, and what should we do about 
it? Part of that is linked to our trade policy, and part of 
that is also linked to our health policy.
    First, what actions are we now taking to combat the 
international spread of this disease? From all appearances, not 
nearly enough. The administration's AIDS czar has acknowledged 
that the epidemic has been met with indifference by Americans 
and also by their government. We cannot afford to let this 
indifference continue.
    I am heartened to learn that some in the administration are 
now speaking out on the issue, even though our trade policies 
to date have been unclear on this matter, sometimes even 
contradictory. Should we, through the office of our United 
States Trade Representative, apply economic pressure or 
withhold assistance to nations such as South Africa when that 
nation attempts to engage in self-help to combat its national 
health emergency?
    Can we identify better approaches to expanding HIV and AIDS 
prevention and treatment in developing nations, rather than 
imposing rigid licensing and import practices?
    Is it necessary for AIDS-stricken developing nations to 
rely on periodic pronouncements of intentions to provide 
limited foreign aid from the United States? And I wrote this 
before, I guess, the announcement recently of $100 million, I 
believe, being offered by the Vice President and the 
administration.
    Can nations in need and the pharmaceutical industry 
negotiate a solution that meets the growing health and 
humanitarian needs, while also ensuring that a reasonable 
profit is made to support future drug development?
    These are all tough questions that this Nation and this 
Congress must address, as we are, in fact, the world's foremost 
economic power; a world leader in science, technology and 
trade.
    The second question is what should we do about the 
epidemic? In answering this question, let me share with you one 
description of a crisis and possible response that was 
highlighted recently in a national television news segment. 
This takes several minutes, but I think it is worth our time. 
It is not a scientific piece, but it does show us, firsthand, 
the situation.
    With Members' forbearance, I would like to show it.
    We will play that tape.
    [Videotape played.]
    Mr. Mica. I would say that this news video is very short 
and superficial. It illustrates the tragedy of the epidemic, 
raises a number of questions, and also presents us with a 
dilemma: Does drug treatment delivery in developing countries 
pose significant risks of new strains of AIDS?
    I hope we will learn more about this issue today, and about 
some of the trade and health implications mentioned. I am 
convinced that we cannot leave ourselves to do nothing to help 
these nations and these people, and I cannot believe that there 
is no other recourse for us but to watch millions of people die 
without treatment.
    Here in the United States, while AIDS continues to spread, 
AIDS deaths have dropped recently by 47 percent, primarily due 
to new drug treatments that prolong lives and allow people to 
remain productive, and the availability within our market of 
these treatments. I hope that we can do much more for other 
nations and our trading partners who are now in need. It is 
clear that many developing nations cannot progress economically 
until solutions to this crisis are found.
    In a recent survey of American citizens, almost 90 percent 
of those surveyed nationwide say that it is safest and cheapest 
to fight infectious diseases at their source, which is most 
often in the developing world. In fact, today, we will hear 
from a witness who is in our country because she cannot acquire 
the drug treatment in her native Africa that she needs.
    The survey also found that more than 80 percent of 
Americans see AIDS as a bigger problem today than they did 10 
years ago, despite advances in treatments. The United States 
plays a vital role in the global economy, and we also remain a 
Nation at risk. Recent data indicates that the infection rate 
among American women is increasing more rapidly than among 
males. As I said at the beginning, African Americans are six 
times more likely to contract HIV/AIDS than others.
    These are some of the reasons that the solution to 
combating the global HIV/AIDS epidemic is complex and will not 
be achieved as quickly as we all hope. Yet I am convinced that 
through a better understanding of this international health 
crisis, we can improve our treatment and prevention efforts 
both domestically and internationally.
    It is imperative that vaccine research proceed 
expeditiously. We also should assist, not hinder, developing 
nations and our trading partners in their efforts. I cannot 
fathom that we simply wait while the epidemic reaches the 
multiples of the 14 million AIDS casualties who have already 
died from this horrible disease. The millions of infected 
babies, orphaned children, new infections each year, and deaths 
that occur internationally without treatment are simply 
unacceptable. This crisis demands our immediate attention from 
this government, and more than a Band-Aid approach.
    Today, it is my hope that as we learn more about the 
crisis, we can begin to formulate a more effective response. It 
confounds me that we can dedicate substantial government 
resources to learn whether we have problems with global warming 
while tens of millions are facing certain death from an 
immediate and growing crisis where real science can save lives.
    I look forward to the testimony of our witnesses, and we 
have many of them today. This is a topic that has raised a 
great deal of interest and attention, rightfully so, because it 
is the greatest health threat facing the world.
    I wish to thank my colleagues in Congress for sharing their 
ideas with the subcommittee on this topic. I also want to 
commend those witnesses with this disease who have the courage 
to discuss publicly this most sensitive and pressing health 
issue.
    Finally, I believe that we have a moral and humanitarian 
responsibility to publicly air this incredible human tragedy, 
and our response should be done both as a Congress and as a 
civilized Nation. Years from now, and millions of deaths later, 
we must not be accused of turning our backs on this great 
holocaust.
    [The prepared statement of Hon. John L. Mica follows:]

    [GRAPHIC OMITTED]
    
    [GRAPHIC OMITTED]
    
    [GRAPHIC OMITTED]
    
    [GRAPHIC OMITTED]
    
    Mr. Mica. I am pleased at this time to yield to our 
distinguished ranking member, the gentlewoman from Hawaii, Mrs. 
Mink.
    Mrs. Mink. Thank you, Mr. Chairman. I do not have an 
opening statement, but I do want to join you in your remarks, 
and certainly lend my support to this inquiry, and to join you 
in expressing hope that as a result of the hearings and the 
testimony today, we can be guided to a policy for this country 
that can adequately meet this terrible need.
    I want to particularly extend a welcome to our 
distinguished witnesses today, and look forward to their 
comments. Thank you, Mr. Chairman.
    Mr. Mica. Thank you.
    I am also pleased that we are joined by the gentleman from 
California, Mr. Lantos, who is not a member of the 
subcommittee, but the full committee. We are so pleased to have 
him join us for the subcommittee hearing this morning.
    Mr. Lantos. Thank you very much, Mr. Chairman. Let me first 
commend you for holding this extremely important hearing.
    The other committee on which I serve, the House Committee 
on International Relations, held a hearing on the spread of 
AIDS in the developing world on September 18, 1998, and I would 
be grateful if my formal statement before that committee could 
be entered in the record.
    Mr. Mica. Without objection, so ordered.
    Mr. Lantos. Mr. Chairman, the word ``historic'' is often 
overused, but it certainly is not overused in this instance.
    I remember I was a young schoolboy studying European 
history when I was first introduced to the concept of the 
bubonic plague. The bubonic plague took place 652 years ago, in 
the year 1347 in Europe, and it killed about 20 million 
innocent human beings. I recall as a boy the concept of 20 
million people being killed by a disease was mind-boggling and 
incomprehensible.
    More recently, in 1917, another 20 million innocent human 
beings lost their lives because of the influenza epidemic, and 
today we are facing the nightmarish impact of AIDS.
    I truly believe that if there is any issue before the 
Congress that deserves full bipartisan support, funding, and 
cooperation, it is the AIDS epidemic. I want to commend the 
Clinton-Gore administration for proposing an additional $100 
million to deal with this issue.
    I also want to commend the First Lady for convening a 
donors conference earlier in September involving international 
organizations and other governments capable of making major 
contributions in dealing with this issue.
    The recently released report entitled ``Report on the 
Presidential Mission on Children Orphaned by AIDS in Sub-
Saharan Africa,'' is one of the most sobering pieces of 
literature issued by any government agency in a long, long 
time.
    We are dealing with millions and soon tens of millions of 
children in desperately poor countries in Africa who will be 
orphaned because their parents died of AIDS. I could think of 
no nobler effort on the part of the wealthy nations of this 
world than to combine forces to try to mitigate the unspeakable 
human horror that will be inflicted upon vast numbers of 
people.
    It is always easier to focus on the plight of a single 
individual or a single family. In recent days, our Nation as a 
family has focused on the tragedy of the Kennedy family, and 
rightly so. I think we need to multiply this by millions to 
begin comprehending the scope of what AIDS is doing to millions 
and tens of millions of families, particularly in the less 
developed parts of the world.
    I very much look forward to listening to our distinguished 
witnesses. Again, Mr. Chairman, I want to commend you.
    Mr. Mica. Thank you.
    Not in order of seniority, but in order of arrival, and she 
also serves on the full committee, Mrs. Schakowsky from 
Illinois is recognized.
    Mrs. Schakowsky. Thank you, Mr. Chairman. I wanted to thank 
you and Representative Mink for allowing me to participate in 
this very important hearing. I do not have a formal opening 
statement, and just wanted to tell you that I am here because I 
am so concerned that the United States play a constructive role 
in addressing this worldwide pandemic, and I look forward to 
hearing from all of our witnesses. Thank you.
    Mr. Mica. Thank you so much.
    Again, in order of arrival, I would like to recognize the 
very distinguished gentlewoman, the delegate from the District 
of Columbia, Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman. I appreciate 
your indulgence. While on the full committee, I am not on the 
subcommittee, but I have a very special interest in this 
subject, as does the Congressional Black Caucus, which has 
devoted a lot of time, effort and energy because of our great 
concern about this subject, both as it relates to Africa and to 
the United States.
    The video that you showed was a very important one, because 
it showed what the absence of drugs and prevention can do, and 
it drew our attention to the reality that there is no one 
approach that will work here or in Africa.
    I am particularly concerned with how we go about dealing 
with this epidemic. I am interested in the way in which there 
has been an emphasis on drugs and drug therapy.
    I represent the District of Columbia, where there is a 
runaway AIDS epidemic. You indicated that deaths from AIDS have 
gone down. That does not include African Americans. Indeed, 
this disease has now transmitted itself such that whereas it 
was stereotypically seen as a gay disease before, it could 
properly be called a black and Hispanic disease today.
    When it comes to drug therapy, one of the reasons that 
deaths from AIDS are not going down, but, indeed, are going up 
in the African American community is that the drugs are so 
expensive. Even if they were not, the regimen that it requires 
is something to behold, the numbers of pills that must be 
taken, the order of those pills.
    Very importantly, the video indicated that we are finding 
that some strains of AIDS may be resistant to drugs, because if 
not taken in the proper manner in which they must be taken to 
be effective, not only do they not help, but they hurt in the 
worst possible way by perhaps creating a different and more 
powerful strain of the disease that is even more resistant to 
drugs.
    That is, of course, why the country here and Africa needs 
to concentrate on prevention. Even if we were to get, as we 
must, more drugs in Africa, who can believe that any but the 
elites will have access to those drugs? If we are seriously 
interested in stamping out AIDS in Africa, it is inconceivable 
to believe that the drugs could be priced low enough so that 
anything but the rarest of the upper classes would get them, 
including the government officials and elites who have AIDS. 
More power to them. We must get those drugs there. But for 
goodness sake, black people in this country cannot get the 
drugs, and poor people do not have the lifestyle that enables 
them to take the drugs in the order and in the rank and with 
the regime that is required.
    I am a little frustrated by the emphasis on drugs and with 
so little emphasis on preventing this disease, because I do not 
believe that the drugs are the answer in the African American 
community here; it is pitiful to think that the drugs will do 
anything for the epidemic in Africa going on today.
    It is very important that we are finally having a 
subcommittee look at this issue, so that we can get the full 
range of the problems out there. I would hope that we see a 
change on the House floor this year, because there is a 
controversy that began in this House with a provision of the 
foreign operations bill that cutoff all United States aid to 
the central Government of South Africa. That aid was not to be 
restored until the State Department submitted a report 
describing what it was doing to force a change in the South 
African Medicines Act. That is the act that would allow South 
Africa to import drugs at lower drug prices, making them 
available in that country.
    I am for that, as much as I think that is a drop in the 
ocean, compared to what we think the epidemic means in South 
Africa and in the rest of Africa today. That provision was put 
in the bill by Representative Frelinghuysen from New Jersey, 
where many of the pharmaceutical companies are based. He has 
threatened to write a tougher provision in the law this year.
    If we are serious about providing drugs and making them 
more readily available in Africa, there is something that this 
committee and this House can do this year, and that is to make 
sure that the Frelinghuysen amendment no longer requires the 
State Department to fight the South African Medicines Act that 
would allow them to import drugs at lower prices.
    Thank you, Mr. Chairman.
    Mr. Mica. I thank the gentlewoman.
    I am pleased to recognize a member of our subcommittee, the 
gentleman from Ohio, Mr. Kucinich.
    Mr. Kucinich. Thank you, Mr. Chairman, members of the 
committee, and Members of Congress who are participating in 
this. I certainly want to welcome our colleagues, Mr. Berry and 
Mr. Jackson, as well as the gentlewoman who is participating 
from Malawi.
    Mr. Chairman, when we look at some of the background 
materials which this committee was provided with in preparation 
for today's hearing, some of the things that cannot help but 
jump out at us are things such as: As goes Africa, so will go 
India, Southeast Asia, and the newly independent states, and by 
2005, more than 100 million people worldwide will be HIV-
positive.
    This report from the White House states that

    AIDS in sub-Saharan Africa, notes the United Nations, is 
the worst infectious diseases catastrophe since the bubonic 
plague. Deaths due to AIDS in the region will soon surpass the 
20 million people in Europe who died in the plague of 1347 and 
more than 20 million people worldwide who died in the influenza 
academic of 1917. Over the next decade AIDS will kill more 
people in sub-Saharan Africa than the total number of 
casualties lost in all wars of the 20th century combined.

    Mr. Chairman and fellow committee members and members of 
the panel, I am very appreciative that the Chair has called 
this meeting so that we can continue an inquiry into the 
horrific spread of AIDS and HIV across Africa and Asia. At a 
time when 47 million people around the globe are living with 
the epidemic of HIV affecting their lives, and perhaps, more 
tragically, one-quarter of all children in many sub-Saharan 
countries have lost both their parents to this terrible 
disease, this hearing is timely and important in addressing 
this emergency.
    The United States must do everything in its power to 
counter this deadly disease by playing the leading role in 
helping to combat the problem.
    Appearing to be the hardest hit by the AIDS epidemic have 
been the populations of the developing countries. Currently 95 
percent of those living with AIDS are in developing countries, 
and the disease tends to be most prevalent among those aged 
between 25 and 44 years. This has serious implications for the 
functioning of economic systems, in addition to the more 
obvious health and humanitarian consequences.
    It is obvious that this situation will not be ignored, and 
therefore, it lends even greater importance to the work of our 
chairman and the ranking member in seeing that this hearing has 
been facilitated.
    Though 95 percent of new HIV infections occur in developing 
countries, more than 90 percent of the resources spent on HIV 
and AIDS prevention and care are devoted to people in 
industrialized countries. The developing countries simply 
cannot afford the high cost involved in the supply of these 
treatments, often lacking the qualified physicians or 
infrastructure needed to bring the drugs to those in need. 
Vital drugs are often kept artificially high in their prices by 
the pharmaceutical industry, which, as we know, is a very 
lucrative sector with average profits of close to 20 percent 
last year.
    However, there is an option which may avoid this problem 
and enable countries in need to access these drugs vital to 
many of their citizens. Parallel imports allow expensive 
patented drugs to be sold through a third country at a more 
reasonable price. These imports are not in violation of WTO 
rules, contrary to the drug companies' complaints, and are 
deemed legal transactions in the world economy.
    More effective awareness campaigns would be another 
solution. For too long, we have seen governments involved 
closing their eyes to the problem, ignoring the sheer scale of 
the problem, and failing to initiate successful education and 
prevention programs, similar to those that have proven 
successful in combating HIV infection in industrialized 
countries. Programs can be set up with minimum cost, and the 
benefits reaped in return can far outweigh initial outlays.
    Mr. Chairman and the ranking member, I look forward to 
learning of the ways in which the United States can play a more 
active role in alleviating this human tragedy. We have the 
opportunity and the responsibility to make this a healthier 
world and to help those less fortunate than ourselves. I 
believe this aim can be achieved if we are willing to keep an 
open mind. Thank you very much, Mr. Chairman.
    Mr. Mica. I thank the gentleman.
    [The prepared statement of Hon. Dennis J. Kucinich 
follows:]

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    Mr. Mica. Now I recognize the gentleman from Maryland, Mr. 
Cummings, for an opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. I am glad 
that we are taking this time to address our Nation's role in 
combating the HIV/AIDS pandemic.
    Just this past Tuesday, Congresswoman Nancy Pelosi and I 
held an AIDS Task Force meeting, which she and I co-chair, to 
address similar issues.
    Since the early 1980's, the AIDS virus has not only plagued 
and crippled American society, but the global community as 
well. Just back in December 1997, I visited Zambia, the Ivory 
Coast, Ghana, and Uganda on behalf of Johns Hopkins University 
and Hospital, which are located in my district, and had an 
opportunity to see firsthand the crippling and devastating 
effects of AIDS.
    Today, I want to make sure that we are all singing from the 
same page. We are holding this hearing, and I think we can 
easily argue on both sides that something should be done, but 
if it is politics as usual, I think that is almost criminal, 
because people are dying as we speak.
    As a matter of fact, when I was in Zambia in 1997, I had an 
opportunity to meet a number of people, some of whom, while I 
was there, died from AIDS. As a matter of fact, in Zambia, what 
they do is they have coffins; they sell coffins outside of the 
hospital. A lot of people going in know that they won't be 
walking out.
    So when I look at the AIDS Action Council voting 
percentages, I really wonder whether this is real or whether we 
are just sort of going through some motions. Thirty-three 
million people worldwide are infected with HIV and have full-
blown AIDS, and 90 percent of them live in Africa, Asia, and 
Latin America. Significantly, however, 90 percent of the 
resources spent on HIV/AIDS prevention and care are devoted to 
people in industrialized countries.
    AIDS and HIV prevention are topics of particular importance 
to me, as I have seen firsthand the effects that these deadly 
viruses have on communities, particularly in my home district 
of Baltimore, where AIDS is the No. 1 killer of our young 
people, aged 24 to 45, while in the prime of their productive 
years.
    I am encouraged that this important issue is finally 
receiving the attention by Congress that it deserves, but 
again, I want to make sure that it is not something simply 
being politicized, but something that we are, all of us, doing 
something about.
    The introduction of this virus and its incredible 
widespread growth has caused unmatched devastation. Although we 
have made great strides in the promotion of AIDS research, 
awareness, and prevention in our country, we are facing an 
uphill battle on the global front. That is why I believe 
efforts like the Vice President's new initiative to combat AIDS 
in sub-Saharan Africa are a step in the right direction.
    However, $100 million is not very much money when we are 
talking about countries like Zambia, where there are 650,000 
orphans, who have been orphaned because of AIDS, and in a 
country like Zambia, where I personally witnessed people having 
their teeth extracted with no kind of anesthesia because the 
country was so poor.
    In a country like Zambia, we have people sitting in open-
air clinics, sometimes waiting for as long as 2 or 3 days for a 
nurse practitioner to see them, only so often to be told that 
they do not even have pills for children's diarrhea. So $100 
million is nice, but that does not go very far. And I am just 
talking about one country.
    Mr. Gore's initiative serves to contain the AIDS pandemic 
on the international level, provide home- and community-based 
care, offer care for children orphaned by AIDS, and strengthen 
prevention and treatment by supporting infrastructure, disease 
surveillance and capacity development. But as I said before, it 
is a step in the right direction, but it is simply not enough. 
I strongly believe that it is important for us to critically 
examine the U.S. role in combating this global epidemic.
    In doing so, I look forward to the hearing today and the 
testimony from the witnesses to discover the best ways to 
develop initiatives to strengthen the fight against AIDS 
worldwide and help some people in countries like the Ivory 
Coast, Zimbabwe, Zambia, Ghana, Uganda address this dreadful 
disease.
    With that, thank you.
    Mr. Mica. I thank the gentleman.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]

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    Mr. Mica. I am now pleased to recognize another member of 
our panel and subcommittee, and also the chairman of our 
Committee on International Relations.
    As the gentleman from California, Mr. Lantos, pointed out, 
I think this is the second congressional hearing. He conducted 
the first congressional hearing on this issue, so I am pleased 
to recognize the gentleman from New York, Mr. Gilman.
    Mr. Gilman. Thank you. I want to commend you for conducting 
this hearing on such a critical issue facing not only nations 
in Africa, but throughout the world and our own Nation as well, 
and to try to find the best way to combat the HIV/AIDS 
epidemic.
    We still have a long way to go. I am pleased that we heard 
recently this week, as a matter of fact, that there will be 
more funds from the administration contributed to this issue, 
but we have to encourage the international community to work 
together on this problem. It is a problem that has affected too 
many lives for too long. We are beginning to see some 
scientific and medical improvements. Of course, we still have a 
long way to go it in that direction.
    So I commend you for bringing this again to the attention 
of the Congress. I commend our panelists who are here today, 
our Members of Congress, Mr. Berry, Mr. Jackson. It is good to 
have Ms. Nkhoma here from Malawi. We look forward to having the 
additional panelists from our administration, and we all look 
forward to working together to see what we can evolve by way of 
congressional assistance to combat this problem.
    Thank you, Mr. Chairman.
    Mr. Mica. I thank the gentleman.
    I would like to now turn to our panel, they have been 
waiting most patiently. We have two distinguished Members of 
the House of Representatives who have joined us today and asked 
to provide testimony: First, the Honorable Jesse Jackson, Jr., 
from Illinois, and he is joined by Marion Berry of Arkansas.
    Also on the panel, we are pleased to introduce Chatinka 
Nkhoma, a Malawi citizen, who will also testify.
    I might say, just as a preface, that this is an 
investigations and oversight subcommittee of Congress. We do 
not swear in other Members of Congress, but we ask all others 
who testify to affirm and swear that their testimony is 
truthful.
    With that, Ms. Nkhoma, would you stand and be sworn, 
please? Raise your right hand.
    [Witness sworn.]
    Mr. Mica. Thank you.
    The other ground rule we have is that we try to limit our 
statements to 5 minutes, and we will be very glad to enter into 
the record lengthy additional statements or documents that 
might refer to your testimony.
    With those comments, let me welcome our two Members and 
recognize first in the order of seniority our colleague Mr. 
Jackson from Illinois. You are recognized and welcomed, sir.

   STATEMENT OF HON. JESSE JACKSON, JR., A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Jackson. Thank you, Mr. Chairman, Chairman Mica, 
Ranking Member Mrs. Mink. I want to thank you for this 
opportunity to address the subcommittee during today's hearings 
on the U.S. role in combating the global HIV/AIDS epidemic, and 
the policies and programs that are being pursued 
internationally.
    I want to comment just briefly on the gentlewoman from 
Washington's concern regarding the Frelinghuysen language. I 
offered an alternative in the foreign operations subcommittee 
hearing to the Frelinghuysen language. It was accepted by the 
committee, and Mr. Frelinghuysen committed to me in full 
committee that he will not offer it, so we have reversed the 
Frelinghuysen language, and he has been most accommodating and 
understanding.
    As you are surely aware, Mr. Chairman, HIV/AIDS are 
rampaging throughout sub-Saharan Africa. While sub-Saharan 
nations comprise only 10 percent of the world's population, 
they are bearing the tragic burden of 70 percent of the world's 
new AIDS cases.
    The World Health Organization reports that of the 14 
million people who have died of AIDS to date, 12 million have 
come from this region. In the hardest hit countries, Botswana, 
Namibia, South Africa, Zimbabwe and Swaziland, infection rates 
in the 15-to-49 age group are an astonishing 25 percent. In 
tourist areas, such as Victoria Falls in Zimbabwe, the rates 
are even higher, 40 percent.
    Please allow me to share an additional key finding from the 
Report on the Presidential Mission on Children Orphaned by AIDS 
in Sub-Saharan Africa released by the White House on Monday.
    Deaths resulting from AIDS in sub-Saharan Africa will soon 
surpass the 20 million people in Europe who died in the plague 
of 1347. Over the next decade, AIDS will kill more people in 
sub-Saharan Africa than the total number of casualties in all 
wars in the 20th century. Each day 5,500 in the region die of 
AIDS-related causes. By 2005, the daily death toll will reach 
13,000. There are nearly 600,000 new infections each year among 
African babies; 9 of every 10 infants infected with HIV at 
birth or through breast-feeding live in sub-Saharan Africa.
    In nine sub-Saharan countries, from one-fifth to one-third 
of children will lose one or both parents to AIDS this year. In 
Lusaka, Zambia, 100,000 children are estimated to be living on 
the streets, most of them orphaned by AIDS. By next year, 1 
million children in Zambia, or one out of three, will have lost 
one or both parents.
    In large part, as a result of AIDS, infant mortality will 
double, while child mortality will triple over the next decade 
in many areas of sub-Saharan Africa. AIDS has reduced life 
expectancy in Zambia to 37 years from 56. In the next few 
years, AIDS will reduce life expectancy in South Africa by one-
third, from 60 years, to 40.
    Over the next 20 years, AIDS is estimated to reduce by one-
fourth the economies of sub-Saharan Africa. In Malawi and 
Zambia, 30 percent of teachers are HIV-positive. In Zambia, 
1,500 teachers died of AIDS-related causes in 1998 alone.
    By 2005, AIDS deaths in Asia will mirror those in Africa. 
Asia will account for one out of every four infections 
worldwide by the end of the year. In India, rates of infection 
are expected to double every 14 months.
    Finally, one in seven South Africans has HIV/AIDS, one in 
seven Kenyans, one in four people in Zimbabwe. United States 
Surgeon General David Satcher has likened the HIV/AIDS epidemic 
in Africa to the plague which decimated Europe in the 14th 
century.
    Existing treatments which enable many people with HIV/AIDS 
in the United States and elsewhere to survive are unavailable 
to all but a few people in Africa. Lifesaving HIV/AIDS drug 
cocktails cost about $12,000 a year in many African countries, 
far out of reach of all but a handful of the growing African 
population of people with HIV/AIDS. Mr. Chairman, per capita 
income in sub-Saharan Africa for 750 million people is $500 per 
year, while the drug cocktails are $12,000 a year.
    By comparison, Mr. Chairman, the top three officers in 
Microsoft have personal assets valued at $140 billion; 43 sub-
Saharan Africa countries and 600 million people.
    Highlighting the difficulty of AIDS education, there are 
1,500 sub-Saharan languages. Even myth, superstition, and rumor 
hamper the efforts. Most recently in Durbin, South Africa, and 
I quote from a newspaper article issued in a CNN bulletin,

    The rolling hills and fertile valleys in the province of 
8.5 million have spawned a myth of a terrible folk cure, a 
story that says having sex with a virgin will rid sufferers of 
the disease. The widespread belief has parents, children, 
doctors and courts struggling with a wave of rapes, frequently 
of young girls.

    There is a crying need to make life-saving drugs and 
education more affordable and available, and quickly. South 
Africa is seeking to lower prices through the use of compulsory 
licensing and parallel import policies. Both of these measures 
are consistent with South Africa's obligations under the World 
Trade Organization's Agreement on Trade-Related Intellectual 
Property, or TRIPS.
    Compulsory licensing would permit generic production of on-
patent drugs with reasonable royalties paid to the patent 
owner. Market competition as a result of compulsory licensing 
would likely lower pharmaceutical prices by 75 percent or more. 
Parallel imports would enable the government to shop on the 
world market for low-priced pharmaceuticals.
    Other countries are watching South Africa; if South African 
policies result in lower drug prices and help alleviate the 
AIDS epidemic, other African countries are likely to follow 
with similar lifesaving measures.
    Mr. Chairman, I want to ask unanimous consent that all of 
my remarks be entered into the record, but I do want to close 
on this brief point.
    The chairman in his opening statement said it is a trade 
issue. The Congress continues to send mixed signals regarding 
the global HIV/AIDS epidemic. Last week Congress passed by 
voice vote an amendment, which expresses a sense that 
addressing the HIV/AIDS crisis should be a central component of 
America's foreign policy with respect to sub-Saharan Africa. It 
expresses the sense of Congress that significant progress needs 
to be made in preventing and treating HIV/AIDS before we can 
expect to sustain a mutually beneficial trade relationship with 
sub-Saharan countries.
    However, the Committee on Rules defeated a substantive 
amendment which I offered would have resolved this problem and 
put an end to the misguided United States policy of bullying 
South Africa. It would prevent the United States Trade 
Representative or other agencies from interfering with African 
countries' efforts to make HIV/AIDS and other medicines 
available to the sick so long as their intellectual property 
rules comply with TRIPS.
    The Committee on Rules said my AIDS amendment did not 
belong in a trade bill. However, a sense of Congress resolution 
did belong in a trade bill. Even the chairman in his opening 
statement acknowledged that this issue is a trade issue.
    Last week, with the Africa Growth and Opportunity Act 
amendment on HIV/AIDS, the House said its heart was in the 
right place on this issue. But yesterday Bernie Sanders offered 
an amendment to the State Department authorization bill that 
would have put our heart and our policy in the same place, but 
it was overwhelmingly defeated 307 to 117.
    The Bible does not let us get away with mere good 
intentions. It requires good law, good policy, and money for 
implementation. The Bible has a different way and a more 
objective standard. It says, ``Where your treasury is, there 
will your heart be also,'' Matthew 6:21.
    If Congress is serious about addressing these problems, we 
have the power to do so. We can either be politically correct 
and side with pharmaceutical companies, or be morally correct 
and side with the millions of afflicted people in South Africa, 
Kenya, Zimbabwe, and beyond sub-Saharan Africa. The choice is 
ours.
    Again, thank you, Mr. Chairman, for this opportunity to 
address the subcommittee. I look forward to working with 
Members on these critical issues.
    Mr. Mica. Thank you, and without objection, your entire 
statement will be made part of the record.
    [The prepared statement of Hon. Jesse Jackson, Jr., 
follows:]

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    Mr. Mica. I am now pleased to recognize another individual 
who has been active on this issue, Marion Berry from Arkansas. 
Welcome, and you are recognized, sir.

 STATEMENT OF HON. MARION BERRY, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ARKANSAS

    Mr. Berry. Thank you, Mr. Chairman. I applaud your efforts 
for holding this hearing today concerning the HIV/AIDS 
epidemic.
    As you have already heard, over 14 million people have died 
of this disease. In many sub-Saharan Africa countries, 25 
percent of the population between the ages of 15 and 49 are 
infected. By 2005, the death toll is projected to be 13,000 
people a day.
    The United States Surgeon General, David Satcher, recently 
wrote for the Journal of the American Medical Association, 
comparing AIDS to the plague, as you have already heard, that 
decimated the population of Europe in the 14th century.
    I also agree with Surgeon General Satcher's comment that 
perhaps the most important element in the battle against HIV/
AIDS is political commitment. Leaders at the national, 
provincial, and local government level must speak out about 
HIV/AIDS and encourage businesses and nongovernment 
organizations to commit to work against this disease.
    I worked as a pharmacist and now serve as cochairman of the 
House Prescription Drug Task Force that I founded, along with 
Jim Turner and Tom Allen. I am familiar with the issues 
involving costs and availability of prescription drugs in our 
country, and I believe that these same issues are critical to 
improving health care and access to prescription drugs in 
developing nations. I am optimistic that 1 day a combination of 
government and private research will lead to a vaccine for HIV, 
and eventually a cure.
    It is tremendously important that governments have policies 
in place that encourage investment in preventing and treating 
the disease. Successful government policies will encourage both 
research and development for funding new cures and provide 
access to the technology for those who need it.
    Developing a cure for AIDS would be a monumental 
breakthrough, but even that would not solve all the problems we 
face. Modern treatments for AIDS have cut in half the number of 
patients dying from the disease in the United States. However, 
the number of deaths resulting from the disease continues to 
rise rapidly in Africa. Additionally, almost three times as 
many people, most of them living in tropical countries of the 
world, die of preventable, curable diseases as die of AIDS.
    I welcome the administration's proposal to increase the 
United States investment in fighting HIV/AIDS in Africa by $100 
million. The new funding would go primarily to prevention, 
providing child care for children whose parents have AIDS, and 
offering counseling and support for those with AIDS. I am sure 
that the help will be appreciated, but noticeably, it will not 
help one more patient get lifesaving medicines that are now 
available.
    It is important that we help developing countries have 
health care systems in place that have the resources and 
infrastructure to provide an adequate level of care. Countries 
will also be much better equipped to provide needed medications 
if they can be acquired in the marketplace at reasonable 
prices. The U.S. Government could play a major role in helping 
countries obtain medicines at a fair price if U.S. trade 
negotiators promoted free trade and played by the rules of the 
international trade agreements. Over 3 million South Africans 
are HIV-positive, including 45 percent of its military; one in 
five South African pregnant women test positive for HIV.
    Access to affordable medicine is also a critical issue for 
the elderly and others suffering from chronic diseases and 
medical conditions. In 1997, the per capita income of South 
Africa was estimated to be $6,200 annually. Prescription drugs 
are not currently an option for many patients in South Africa, 
where they often cost more than they do in the United States.
    To address the problem, President Mandela and the South 
African Government enacted a law in 1997 to reform the 
country's prescription drug marketplace. The law amends the 
South African Medicines Act to allow prescription drugs to be 
purchased in the international marketplace, where prices are 
lower. It would also allow compulsory licensing in some cases.
    Regulations implementing the law have not come forward 
while the law is being constitutionally challenged in South 
African courts by drugmakers in their country. However, the 
pharmaceutical industry has persuaded the United States 
Government to work to have the South African law repealed.
    In February, the United States Department of State released 
a report describing the United States Government's efforts to 
stop South Africa from enacting the legislation. While special 
interest groups have tried to convince Members of Congress and 
the administration that implementation of the South African 
Medicines Act would cause violations of international 
intellectual property rights agreements, I have seen no 
evidence that such violations are likely to occur.
    Compulsory licensing is not an assault on the intellectual 
property rights. Instead, it is a part of the copyright and 
patent system, which enables the interests of the public to be 
served. Compulsory licensing is permitted under article 31 of 
the WTO agreement on trade-related aspects of intellectual 
property rights. In fact, French law authorizes compulsory 
licensing when medicines are available to the public in 
insufficient quantities or qualities, or at abnormally high 
prices.
    Only 3 months ago, the House voted 422 to 1 to continue the 
practice of compulsory licensing for television broadcast 
signals as part of the Satellite Home Viewer Act of 1999.
    In addressing the global HIV/AIDS epidemic, it is 
imperative that we examine the trade policies of our country to 
ensure that we are promoting what is in everyone's best 
interests.
    Thank you, Mr. Chairman.
    Mr. Mica. I thank the gentleman for his statement.
    [The prepared statement of Hon. Marion Berry follows:]

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    Mr. Mica. I am pleased to recognize the last member of the 
panel, who talks from very firsthand experience about this 
terrible disease, Chatinka Nkhoma. She is a Malawi citizen.
    Welcome, and you are recognized, ma'am.

        STATEMENT OF CHATINKA C. NKHOMA, MALAWI CITIZEN

    Ms. Nkhoma. Thank you, Mr. Chairman.
    Mr. Chairman and members of the committee, ladies and 
gentlemen, I am here today to represent the millions of people 
that you have just heard of that are being infected with HIV/
AIDS and have no way out; millions of Africans who are dying 
and will continue to die if nothing is done immediately.
    I am their voice here to cry for help. We need access to 
the proper treatment of AIDS. I am a 37-year-old African woman, 
a single woman living with AIDS. I come from Malawi, a very 
poor country in Africa, actually the second poorest country in 
the whole world, although I think last week they say we are No. 
4, but I still think we are the poorest.
    Malawi has an estimated population of 11 million. Twenty 
percent, as we heard, is infected with the AIDS virus and is 
dying from it. I now call myself living with AIDS, but just a 
couple of months ago I was dying of AIDS. I do not think 
anybody in this House can even begin to imagine what it is like 
to live in an environment like that.
    These figures, the 20 percent, also include, Mr. Chairman, 
my brother Michael and his wife, who died last year, leaving a 
2-month-old baby who had to be fed by a wet nurse; my sister, 
who died in 1994. She was a widow. She left four children. I 
have lost three brothers-in-law. I have lost 10 cousins. My 
mother, who right now she should be enjoying the fruits of her 
labor, is burying her children.
    I have lost so many friends and neighbors and work 
colleagues; so many relations. Many professional people, 
entertainers, and local media people, even politicians; 
everybody is dying. We are either dying from the disease or the 
effects of it.
    Saving the children and not the mothers is even worse, 
because children are left vulnerable to abuse. I am supposed to 
have been dead right now, but I can testify that I am here 
because of the mercy of Christ. I am not here because I was 
treated for opportunistic diseases. I had a lot of antibiotics 
and many other stuff that tried to cure the infections that I 
had. But, Mr. Chairman, if I had not been one of the fortunate 
people, one of the people who had God's blessing to be able to 
access these drugs, I simply would not have been here.
    Mr. Chairman, we need these drugs to enable us to survive 
this catastrophe. We need these drugs. We need the full and 
complete AIDS treatment for the millions of people dying. That 
need cannot be adequately emphasized in any way. A program that 
can test and treat millions of us who are infected will also 
stop the virus from spreading further. Right now that is the 
only available vaccine.
    As we heard early on, Mr. Chairman, you say there has been 
a significant reduction in the AIDS infection rate in America. 
That started by the drugs. There have been so many statistics 
that have been thrown around today Mr. Chairman. Whatever the 
source they came from, and whoever presented them, they are 
alarming, and this trend will not change.
    There are many arguments about what other things we do not 
have. That is true, we do not have many things, but we cannot 
be condemned to death because we are poor. There are some 
people that have actually said we Africans are used to death 
and destruction. We are not; we are only human people living in 
fear every day, every minute. We do not talk about AIDS because 
it provokes that fear.
    Some people react violently. We have heard about people 
being killed. That is the only means of self-defense some 
people find. It is unacceptable to discriminate against 
anybody, but who are we to judge? If you cannot get to 
something, you cannot see and touch, then people just use all 
sorts of ways to self-defend themselves. Maybe by killing your 
neighbor you think you are going to save yourself.
    I know today there will probably be a lot more arguments as 
to why we should not get the drugs; arguments that they are too 
costly and they are too dangerous to give to Africans; that it 
is better for us to die because we do not have high-tech 
hospitals; that we are not intelligent enough to administer 
them properly, that we do not need them now. I do not know when 
we will need them; that we only need aspirins and antibiotics 
now; that we are going to create a virus that will be resistant 
to all the newer drugs and probably have wasted scientists' 
time in their research.
    Mr. Chairman, we want to be alive to bring up our children. 
Whatever it takes to make us live, it must be done. We are also 
human. I know we are very poor humans, but not by choice. We do 
not want to die. At this stage in medical advances, it should 
not be accepted for anybody to be left to die because of the 
cost factors.
    At the end of my studies here, I want to go back home. I 
want to return to my family. I can only do this if we have 
access to drugs in my country, because I do not want to die. At 
the same time, I want to go home and be with my family, so I am 
begging you to at least give us access to these drugs, whatever 
way. The pledges that have been made, $100 million, or 
everything else, but not drugs, this is not right. We should 
have--the pledges should include everything. If I do not have 
clothes on my shoulders, you cannot say you are not going to 
give me food. That is the only way it is going to make a 
difference.
    I know it is not easy to keep up with the treatment 
regimens. Regardless of where you come from or how rich you 
are, they are hard. But I know one thing for sure: Where this 
is a will, there is a way. Africans have contributed to AIDS 
research. As we speak now, we have institutions that are 
researching AIDS in Africa, and most of the drugs that have 
been used now have been researched on people in Africa. We have 
been used as guinea pigs in trials for these drugs. I think we 
deserve the drugs, if not for anything else, maybe just because 
we are humans. We should not be expendable. We should not be 
punished for being poor.
    More prevention, education, and better hospitals will not 
save the situation. We need that and the drugs. I believe I was 
able to learn foreign languages, several of them, I have 
learned foreign technologies, and I believe it would not be 
true if you say that we cannot learn how to follow medical 
procedures that will save our own lives. We can learn how to do 
that, and by shear will we will make it. I know people who will 
and do travel 10 miles every day to get an injection if the 
doctor tells them to do that, by foot.
    These days we are no longer mourning our dead, Mr. 
Chairman, we are just burying them. We do not have the time, 
the resources, or the tears. The old are burying the young. 
This is not a good thing for Africans, for we believe that 
young people do not make good ancestors. They have not gathered 
enough wisdom and experience for this job of being an ancestor.
    Following proper burial customs ensures that the dead lay 
at rest and do not return to haunt us and bring bad omens upon 
the community, which is exactly what is happening.
    Mr. Chairman, in closing, I just want to say, we have three 
types of brothers and sisters, Mr. Chairman, in my country. We 
have the breast brothers and sisters, those that you share the 
same breast. We have blood line brothers and sisters. Then we 
have brothers who are people who have been there for us. I am 
sure you can be our brothers and sisters. You have been there 
for us for many times, and we need your help this time.
    Mr. Chairman, we don't want to die. At the same time, we 
have what we also called Wantu. I believe in Yiddish, we call 
it mensch, and in English it is probably humanity. It talks 
about humanness, gentleness, and hospitality, putting yourself 
out on behalf of others, being vulnerable. It recognizes that 
my humanity is bound in yours. We can only be humans together. 
Bishop Desmond Tutu is better than anyone at doing this.
    Mr. Chairman, AIDS is affecting everything, every aspect of 
our lives. It is leaving no stone unturned. It is cultural, 
socioeconomic, a productivity degradation. Mr. Chairman, unless 
it is in one's interest to see us Africans perish, immediate 
action needs to be taken. Give us this gift of life!
    The Greeks said that the last demon that came out of 
Pandora's box, called hope, was the most dangerous demon, 
because it looked like an angel. Giving us anything else other 
than the complete treatment is giving us this demon. Thank you 
very much, Mr. Chairman, ladies and gentlemen.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Ms. Nkhoma follows:]

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    Mr. Mica. I also thank the Members who testified.
    I will just ask a couple of quick questions. You gave some 
compelling testimony, Ms. Nkhoma. You did say, as I recall, in 
your testimony that some people walk 10 miles a day to go and 
get an injection. That indicates that there is some treatment 
available.
    What percentage of the people in your country, and again, 
one of the poorest of the countries, are able to get treatment?
    Ms. Nkhoma. Mr. Chairman, in my country--it is different in 
all the countries, but I have been in all the neighborhoods, 
and if you may allow me, Mr. Chairman, in South Africa they 
have an infrastructure. Their medical facilities are very up-
to-date. They have really high standards. So an excuse that 
they cannot have the medications because they do not have up-
to-date facilities will not really hold any water in this.
    But in my country we have a lot of facilities, available 
now, which are able to treat opportunistic diseases. We have a 
lot of missionary hospitals which have spread all over Africa, 
the Catholic missionaries, and we have other denomination 
missionary hospitals which are in every little space and 
community in Africa.
    These hospitals are being funded by the donors outside 
Africa, and they are well-equipped, so they are able to 
administer, and to make sure that people will be able to follow 
the regimen. Like I say, in the end, it is up to the person. It 
does not matter where you are.
    Mr. Mica. My question really was referring to what 
percentage of the people. How many that are afflicted with AIDS 
are able to get treatment? Is it 10 percent, 20 percent, could 
you estimate? It sounds like there is a regimented treatment 
available. But obviously you are here for treatment, you are 
not there, where many people left behind.
    We are interested in seeing what kind of unserved 
population there is, since you have one of the poorest 
countries. Could you provide us with some estimate?
    Ms. Nkhoma. Mr. Chairman, in my country I think there is 
nobody who will be able to get the medication, considering the 
fact that it is not a one-time medication, but every month for 
the rest of the time you are alive. So I can truly and honestly 
say here that I do not believe there is anybody in my country 
who would be able to take this medication at this moment. There 
are people who are attempting to take part of it. That is 
probably 0.001 percent of the population.
    Mr. Mica. That was my question. You came here. Did you come 
here as a student, and you were able to get treatment in the 
United States? Did you pay for that, or is that provided?
    Ms. Nkhoma. Mr. Chairman, I came here because I had a 
scholarship to come and get my master's degree. I didn't even 
know the medication was available. All I knew is that there was 
AZT. At the time I was going back to my country. AZT cost too 
much even at that time for anybody. So I didn't even know that 
things had gone as far as they have. It was after I came here 
and talked to some people about my condition, because I was 
still not very well, and they took me to the clinic.
    Mr. Mica. Thank you.
    Mr. Jackson, thank you for persisting in your interest in 
this, and Mr. Berry and others. I have many Members of Congress 
contact me and express their concern. I had some people contact 
me who did not want to conduct a hearing on this. I know it 
makes people uncomfortable, both in Congress and in the 
administration, with the pharmaceutical companies and the whole 
range.
    But having been here, I have family on both sides of the 
aisle, and I do not think it is our job to ignore problems of 
this proportion and sweep them under the table. I think it is 
our job to hear them.
    I have had requests from the minority and majority, I think 
they should be treated equally, and particularly for something 
of such significance. So I want to personally thank you, and 
also thank Members for persisting in this hearing. I have had 
the cooperation of our ranking member, and we did see some 
action from the administration this week, $100 million. As you 
say, it may be a drop in the bucket, but at least we are 
focusing some attention and resources.
    We need an examination of our policy, which is critical, 
and this is not really a question but a comment. I thank both 
of you for your involvement.
    I yield to our ranking member for questions.
    Mrs. Mink. Thank you very much, Mr. Chairman.
    Certainly, Ms. Nkhoma, the description that you have given 
the committee and the country about the conditions in your 
country and the lack of adequate treatment and drugs that are 
available in this country is certainly a pathetic comment on 
this Nation's humanity.
    I think the question that I really wanted to ask is to our 
colleague Mr. Jackson, who has been pursuing this issue for a 
long time. Knowing the way this place works and how it works, 
and how slowly it takes hold of some of these very, very 
important issues, is there one particular thing that you feel 
we could do at the moment to break loose this barrier in this 
area, the policy of the United States in sharing its medical 
technology and expertise in alleviating the conditions of 
suffering and disease in Africa that are connected with HIV and 
AIDS?
    Mr. Jackson. Madam ranking member, I plan to offer next 
week a piece of legislation that will make drugs, or 
pharmaceuticals, much more available to the people of sub-
Saharan Africa, and I certainly hope that it will be a 
bipartisan piece of legislation, and those Members of Congress 
who have expressed interest in this great issue, that they will 
manifest that great interest by becoming cosponsors of this 
bill so that we can make these needed improvements in our 
relationships with many of these countries more substantive; 
not just a humanitarian gift by the administration that is a 
discretionary gift by administrations, albeit Democrat or 
Republican, but make it the will of the American people in the 
form of a law that if, in fact, we have access to new 
technologies, new drugs, new pharmaceuticals, that we find ways 
to make them more available to more people.
    Much of the AIDS research, as Ms. Nkhoma has indicated, has 
been tested on Africans. That is clearly, according to that 
map, the center of the AIDS crisis globally. But the results of 
that research are not making it back to Africa in the form of 
drugs and pharmaceuticals. They are being produced in our 
hospitals, in our labs, in our research, with our taxpayer 
dollars. And it is my personal desire, and I certainly would 
suggest it is the personal desire of the people that I 
represent, that their taxpayer dollars be used in such a way, 
since they are going toward AIDS research. I do sit on the 
Labor-Health-Human Services Committee, and I do have a sense of 
what the NIH is doing; the end result of that research should 
benefit people who have the disease.
    It is troubling. I think that Members of Congress are going 
to have to wrestle with this, when the Office of the United 
States Trade Representative and the United States Government 
continue to pressure South Africans to abandon legal attempts 
to employ compulsory licensing and parallel imports.
    A State Department report, with which we are all too 
familiar with now, explains how the United States Government 
agencies have been engaged in a full court press with South 
African officials from the Departments of Trade and Industry to 
pressure South Africa to change provisions of the Medicines Act 
that give the government the authority to pursue compulsory 
licensing and parallel import policies.
    Why is South Africa so important? It is the largest sub-
Saharan economy. Most other nations will take their cues based 
upon how our government relates to sub-Saharan Africa.
    The United States has also threatened to withhold trade 
benefits under the GSP program from South Africa and threatened 
trade sanctions. Even in the report, for example, in July 1998, 
Assistant United States Trade Representative for African 
Affairs Rosa Whittaker met with the South African Charge 
d'Affaires in Washington to stress once again the United States 
Government's concern about pharmaceutical patent protection and 
parallel importation in South Africa.
    She also repeated the United States Government's position 
that South Africa's request for preferential treatments would 
be held in abeyance pending adequate research on intellectual 
property rights protection. Unless we change this statutorily, 
this will be our Trade Representative's policy. And we cannot 
on the one hand be supportive of humanitarian concerns, which 
are purely discretionary, and abdicate our responsibilities as 
representatives to make it the U.S. Government's policy to 
address this crisis and keep it from spreading.
    I thank the gentlewoman.
    Mrs. Mink. A followup question. The point that you made, 
that Ms. Nkhoma also made reference to, the fact that Africa is 
basically the target location in this world for the testing of 
these drugs, is it possible in our legislation, or maybe not in 
this legislation but in other legislative efforts, that we 
could require that in situations where a disease such as this 
reaches a pandemic proportion, that the pharmaceutical 
companies that are testing drugs and exploring the efficacies 
or lack thereof of the drug treatments, in large part protected 
and funded by the United States, not be permitted unless they 
make suitable arrangements for the distribution of the drugs 
they have tested, and which have been proven efficacious; could 
we not establish such a policy or requirement in our support 
and sanctions of these trials in these countries with reference 
to this type of epidemic?
    Mr. Jackson. I believe, Representative Mink, that it is 
possible to accomplish this legislatively. But I would go one 
step further to suggest that the World Trade Organization 
already allows for the creation or the availability of these 
drugs when the crisis reaches epidemic proportions.
    Why the United States Government is pursuing sub-Saharan 
countries in many instances inconsistent with internationally 
established understandings with respect to availability in the 
event of epidemics is quite troubling.
    But you touched upon something else that I think is 
critically important. Several of our colleagues today mentioned 
this idea of triple therapy against HIV viruses. Even Ms. 
Nkhoma indicated that to question Africans' intelligence about 
their ability to follow regular regimens, though complicated, 
was somewhat--this triple therapy, these drugs are expensive 
and very hard to take, but there are drugs to treat illnesses 
that kill people with AIDS that are cheaper and easier to take. 
A year's supply of these drugs is about $70 per year. Most are 
one pill of four drugs, once a day.
    The point is, the kinds of combinations of therapies that 
some men and women have access to are very difficult to 
administer and supervise in the developing world's conditions, 
but these treatments, in many activists' views, are not the 
most important ones we should be looking at.
    The first priority for extending the lives of people living 
with HIV/AIDS in the developing world should be providing 
access to very inexpensive drugs that treat and prevent the 
development of opportunistic infections that kill most people 
with AIDS. In this regard, I am specifically talking about 
pneumonia, fungal tuberculosis infections, dehydration due to 
diarrhea; these are diseases that people subsequently die from 
who are infected in this area. So it is not just the AIDS drugs 
which are being produced, which are not making it in South 
Africa, but many sub-Saharan Africans are dying from many other 
diseases that are complications of having HIV/AIDS.
    Mr. Mica. Ms. Schakowsky.
    Ms. Schakowsky. Thank you, Mr. Chairman.
    I want to say a particular thank you to Ms. Nkhoma. We are 
all overwhelmed by the numbers and the breadth and extent of 
this crisis. But hearing the name of your brother, I can barely 
say it myself, somehow puts a different perspective on it, and 
your cousins, your sisters, and you.
    I think it is so important for us to understand that these 
are not faceless people, and in a real sense, as you made clear 
in your testimony, but these are our brothers and sisters for 
whom we do have an obligation.
    So in that regard, I was interested to know, when you go 
home, which I know it is your hope to go home, should nothing 
else happen, that is, no circumstances change, what happens to 
you? What are the circumstances in your country? What will you 
be facing?
    Ms. Nkhoma. Thank you very much. I am normally asked that 
question all the time, and I normally tell people what I want 
on my tombstone. If I go home, I die. There is no any other way 
out of it. If I go home and I don't take the drugs, unless 
probably by taking them for the past 5 months I have developed 
like an immunity within myself, but I would die.
    Ms. Schakowsky. So they are not accessible, they are too 
expensive? What exactly are you facing?
    Ms. Nkhoma. Just recently, I think as early as the end of 
last year, the Glaxco-Welcome representative came and saw some 
people. This I heard after I came here and went back home in 
November. That is when I was talking about the drugs here, and 
some people said, yes, we had representatives from these 
companies who are encouraging people to take double therapy, 
like two drugs.
    From my being here, I have discovered that it is actually 
more dangerous to even take only the two drugs. One, you are 
wasting your money; and two, it is not really going to help 
that much.
    But the drugs now, to answer your question, I do not say 
they are available, because nobody can get to them, but they 
are there, we hear, in the pharmacies, but nobody can afford 
them. So we just look at them and die.
    I just wanted to make the point, which is an irony stemming 
out of this that the few people that attempt to buy these 
drugs, spend everything that they have, maybe sell a house, 
maybe sell a car, and then say it is a father, is still going 
to die after he finishes his source of money. That means he is 
going to leave his wife and children with absolutely nothing. 
It has domino effects.
    Ms. Schakowsky. You referred to Africans being used as 
guinea pigs. I presume during a certain period of time that 
those individuals who are being used to test the drugs are 
being given those drugs, and then what happens? When the test 
is over, do they just say, good-bye, thanks a lot, and you are 
gone?
    Ms. Nkhoma. In all the tests, currently, until somebody 
blows the whistle to the international community on what is 
happening, nobody will ever get to know about it. I have talked 
to the Minister of Health a little bit, and I know what has 
happened, and what has been happening.
    In Zimbabwe, currently AZT was being tested on mother-to-
child transmission. Some mothers were given placebos, and the 
others were given AZT. After the trial, the researchers packed 
their bags and came here. Neither did they attempt to continue 
treating the mother, nor continue with maybe the other people 
who were given placebos. I know of nobody who has actually been 
given this treatment who continued. I think I would have heard 
about it.
    Ms. Schakowsky. What is remarkable to me about that 
testimony is that I well remember when it was announced in the 
U.S. press that it was discovered how effective the use of AZT 
was in preventing the birth of HIV-infected infants. So we all 
celebrated the results of that experimentation. But as you 
point out, it appears that no one in Africa has subsequently 
benefited from it.
    I have a number of other questions, but my time is up. 
Thank you.
    Mr. Mica. I thank the gentlewoman.
    I now recognize the gentleman from Maryland, Mr. Cummings.
    Mr. Cummings. Thank you Mr. Chairman.
    I want to thank you, Mr. Jackson, for what you are doing, 
and I certainly will join you in doing everything I can to 
address this major, major problem.
    And to Ms. Nkhoma, thank you also. I think it is quite 
accurate, I think so often what happens here on the Hill is 
that sometimes we divide policy from real people, and I think 
when we are able to put the faces on the policy, it does make a 
difference.
    I want to go to you, Mr. Jackson, and just ask you a few 
questions.
    One of the things that we hear over and over again in this 
country is how do drug companies get their investments back? We 
constantly hear them talking about the research that they have 
done. As a matter of fact, I have heard some folks at certain 
pharmaceutical companies say that even if they came up with a 
cure for AIDS today, we might see a substantial delay in it 
actually hitting the street.
    One of the things they complain about is that they want 
their money back for research. I am sure the same kinds of 
arguments are made with regard to Africa and developing 
countries. What is your answer to that?
    Mr. Jackson. Congressman Cummings, the present United 
States policy, that which we are articulating before the 
subcommittee today, is to threaten sub-Saharan nations who 
support compulsory licensing and parallel imports, that is, on 
the open market, assuming free trading relationships, that they 
might be able to shop around, produce, or find cheaper drugs to 
get them directly to their people.
    Any self-respecting government, including our own, under 
these circumstances would find such a policy to be fair.
    I personally believe medicine is a human right. I think if 
someone finds a cure to cancer, it is not something they can 
keep in their basement and just hide. At some point in time we 
have to make a decision as a government that we have enough 
people with cancer that we need to make that cure available, to 
get them some resources, to protect some of their legal patent 
rights, to compensate them accordingly; it is not a secret that 
you get to hide.
    Medicine and its production is not purely for the 
availability of profit. When we look at an epidemic of the 
magnitude of the AIDS crisis, for which all of our charts are 
clearly available, we have some obligation as a superpower, as 
one who has been economically endowed by God to make certain 
judgments about our Nation's commitment to the human family, 
that we are not going to allow millions of people to be 
decimated, not because they do not need drugs, but because we 
simply recognize that they cannot afford those drugs.
    We have an obligation, on the question of their investment, 
to find creative ways to protect their patents, to protect 
their intellectual property rights, but at the same time not 
threaten with trading embargoes or various provisions in our 
trading law, manipulated in various ways, to keep sub-Saharan 
Africans from finding on the open market or producing more 
generic drugs at cheaper costs, so they might create stability 
in their own countries.
    If the infection rate in many of these countries continues, 
and their governments are in a position where they cannot even 
fight to get lifesaving drugs for their people, inevitably it 
is going to create a level of government instability in those 
countries which is going to affect our normalized trading 
relationships. Those governments will not be stable going into 
the future economically if, in fact, there are various 
revolutions based on who gets access to medicine simply because 
they can afford it and those who cannot. We have some 
obligations, Mr. Cummings.
    Mr. Cummings. One of the things that I could not help but 
think about as you were talking was when the Kosovo issue came 
up, this country responded quite rapidly and with quite a bit 
of money and dealt with that issue. When I look at what is 
happening here, when we have millions of people dying, it is 
interesting to look at those two situations and how we are 
dealing with them.
    Finally, let me say this. When we talk about putting a face 
on this problem, Mr. Chairman, when I visited Zambia, I was on 
my way, and I was about to leave the last day, and I had met a 
young girl named Sakia, and I think you will appreciate this, 
Mr. Jackson; a little 10-year-old who was an orphan. As I was 
about to leave, I had done several speeches about AIDS, this 
little girl, Sakia, who I had met earlier that week, came up 
and said--pulled me on the coat, and says, are you leaving? I 
said, yes, I am leaving. She said, are you going to come back? 
Are you going to help our people? Because, you know, my mommy 
and my daddy are dead, and all my relatives are dead. And I 
said, yes, I am going to come back. I am going to figure out a 
way to help you. We have to help you, and we have got to help 
your people. And she says, well, when are you going to come 
back? I said, I am going to come back soon. She said, when you 
come back, she said, will you look for me? And I said, sure. 
And I said, I will write you. She said, but if you can't find 
me, will you look for me in heaven?
    And I will never forget that, never ever forget that, 
because she saw her life sort of just disappearing, as she had 
seen so many other people's lives disappearing.
    Mr. Mica. Thank you.
    Mr. Lantos.
    Mr. Lantos. No, thank you.
    Mr. Mica. You have both been most patient. We thank you. 
Your coming forward today has helped provide us with reasons 
that we should go forward, from your own personal experience. 
Hopefully it will help make a difference as Congress decides 
its policy here, so we particularly thank you for participating 
today, and also my colleague Mr. Jackson and my colleague Mr. 
Berry.
    We will excuse this panel and thank you both again.
    I would like to introduce and welcome our second panel.
    The first participant witness is Ms. Sandra Thurman, 
Director of the Office of National AIDS Policy of the White 
House; then Mr. Joseph Papovich, Assistant U.S. Trade 
Representative under Services, Investment and Intellectual 
Property of the United States Trade Representative's Office. 
Then we have Dr. John Killen, the Director of the Division of 
AIDS in the National Institute of Allergy and Infectious 
Diseases in the National Institutes of Health. Then we have Dr. 
Timothy Dondero, the Chief of International Activities Branch, 
the Division of HIV/AIDS Prevention, with the Centers for 
Disease Control and Prevention.
    I would like to welcome all of our panelists. Again, this 
is an investigations and oversight subcommittee of Congress. If 
you would not mind, I would like to swear you in, if you would 
please stand.
    [Witnesses sworn.]
    Mr. Mica. The witnesses answered in the affirmative.
    Again, welcome to our subcommittee. We appreciate your 
providing testimony.
    As I said previously, if you have lengthy statements, we 
are going to run the clock because we have another full panel 
after you. If you have lengthy statements, we will make them 
part of the record, or additional documentation, by unanimous 
consent.
    First, I would like to recognize Ms. Sandra Thurman, the 
Director of the Office of National AIDS Policy for the White 
House. Welcome, and you are recognized.

STATEMENTS OF SANDRA THURMAN, DIRECTOR, OFFICE OF NATIONAL AIDS 
POLICY, THE WHITE HOUSE; JOSEPH PAPOVICH, ASSISTANT U.S. TRADE 
 REPRESENTATIVE, SERVICES, INVESTMENT & INTELLECTUAL PROPERTY, 
 U.S. TRADE REPRESENTATIVE; JOHN KILLEN, DIRECTOR, DIVISION OF 
 AIDS, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES, 
 NATIONAL INSTITUTES OF HEALTH; AND TIMOTHY DONDERO, CHIEF OF 
   THE INTERNATIONAL ACTIVITIES BRANCH, DIVISION OF HIV/AIDS 
     PREVENTION, CENTERS FOR DISEASE CONTROL AND PREVENTION

    Ms. Thurman. Thank you, Mr. Chairman. I knew I should not 
have released my report before I came to this committee, 
because most of you have already heard some of the statistics 
out of it.
    I just want you to know how pleased I am to be with you 
here today. Your interest in addressing this crisis is very 
much appreciated, and your help is very much needed.
    My colleagues from the NIH and the CDC will again lay out 
for you a very vivid picture of the depth of this tragedy and 
describe for you some of the work that their agencies are doing 
to address the many challenges before us. You have heard the 
statistics, but you have also heard that these are not just 
numbers, but very real people and real lives.
    I would like to take this time to talk with you a little 
bit about the human dimension of AIDS. AIDS truly is a plague 
of Biblical proportions. While many of us have witnessed 
firsthand the devastation, it is almost impossible to describe 
the grip that AIDS has on villages across Africa and on 
communities around the world. Twelve million men, women, and 
children in Africa have already died of AIDS, and yet the AIDS 
pandemic rages on.
    In a host of different ways and from a variety of different 
vantage points, it is children who are caught in the cross-fire 
of this relentless epidemic. In Africa, an entire generation is 
in jeopardy.
    In many sub-Saharan countries, between one-fifth and one-
third of all children have already been orphaned by AIDS, and 
the worst is yet to come. Within the next decade, more than 40 
million children will have lost their parents to AIDS, 40 
million. That is the equivalent of every child in the United 
States living east of the Mississippi.
    AIDS is wiping out decades of hard work and steady progress 
in improving the lives and health of families throughout the 
developing world. For millions and millions of those families, 
and in some cases entire nations, AIDS is the engine of 
destruction that is pushing us toward the brink of disaster. 
Not only do precious lives hang in the balance, but so, too, do 
the economic viability and the political stability of their 
homelands. As the chairman has said, AIDS is a trade and 
investment issue, not just a health issue. Both in terms of 
exports and natural resources, Africa is a critical partner to 
the United States. A successful fight against AIDS is 
fundamentally important to our ability to sustain and improve 
our economic ties to Africa.
    Skilled workers are taken in the prime of their lives, and 
in many instances companies are having to hire two people for 
every single skilled job they have, assuming one will die of 
AIDS.
    AIDS is also a security and stability issue. The prevalence 
of HIV in the armed forces of many African countries is 
staggeringly high. The Economist has estimated that the HIV 
prevalence in the seven armies engaged in the Congo is 
somewhere between 50 and 80 percent of all military personnel.
    Other recent reports have projected that the South African 
military and police are also heavily impacted by HIV. More 
over, as these troops participate in an increasing number of 
regional interventions and peacekeeping operations, the 
epidemic is very likely to spread.
    Yet my message here today to you is not one of hopelessness 
and desolation. On the contrary, I hope to share with you a 
sense of optimism. For amidst all of this tragedy, there is 
great hope. Amidst this terrible crisis, there is great 
opportunity. The opportunity is for us, working together, to 
empower women to protect children, and to support families and 
communities throughout Africa and throughout the world in our 
shared struggle against AIDS.
    The United States has been a leader in the struggle. The 
administration has taken an active role in sounding the alarm 
on the AIDS crisis in Africa, and in marshalling support for 
African efforts to combat this deadly disease. Since 1986, this 
Nation has contributed over $1 billion to the global fight 
against AIDS. More than 50 percent of those funds have been 
used to address the epidemic in sub-Saharan Africa. Overall, 
nearly half of all the development assistance devoted to HIV 
care and prevention in the developing world has come from the 
United States.
    The United States has also been the leading supporter of 
the United Nations Joint Program on AIDS, or UNAIDS, 
contributing more than 25 percent of their budget. It is a 
strong record of engagement of which we can be proud, but 
unfortunately, it has not kept pace with this terrible 
epidemic. We have done much, but much more remains to be done 
by the United States and by the world's other developed 
nations.
    In that spirit, on World AIDS Day in 1998, the President 
directed me to lead a fact-finding mission to sub-Saharan 
Africa and to make recommendations for an enhanced United 
States battle in our global fight against AIDS. I was pleased 
to lead that mission during the Easter recess, accompanied by 
Members and staff from both parties and both Chambers to 
witness firsthand the tragedies and triumphs of AIDS in Africa.
    In response to that trip, as we all have heard, the 
President and the Vice President agreed we need to do more. 
This week the administration announced a broad initiative to 
invest $100 million in the fiscal year 2000 budget toward this 
effort. This initiative provides a series of steps to increase 
U.S. leadership through support for effective community-based 
solutions and technical assistance to developing nations.
    This effort more than doubles our funding for programs of 
prevention and care in Africa, and challenges our G-8 partners 
and other partners to increase their efforts as well. This 
initiative is the largest increase in the U.S. Government's 
investment in the global battle against AIDS, and it begins to 
reflect the magnitude of this rapidly escalating epidemic.
    Our commitment to seek an additional $100 million in fiscal 
year 2000 will help to support four key efforts: $48 million 
will be used for prevention, $23 million will be used to 
support community and home-based care, $10 million will go to 
take care of children who have been orphaned as a result of 
AIDS, and $19 million will be used to strengthen the 
infrastructure and to build the capacity that we need to 
provide care to people who are infected throughout the African 
world.
    We hope this initiative will receive the broad-based 
bipartisan support that it deserves. I greatly appreciate the 
favorable comments of the members of this committee about this 
initiative. AIDS is not a Democratic or Republican issue, it is 
a devastating human tragedy that cries out for all of us to 
help. I look forward to working with all of you.
    On Monday, Bishop Tutu mentioned an African proverb which 
says, ``When one steps on a thorn and it goes into the toe, the 
whole body bends down to pull it out.'' We ask for your help in 
doing that, in addressing this crisis of AIDS.
    Thank you very much.
    Mr. Mica. Thank you.
    [The prepared statement of Ms. Thurman follows:]

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    Mr. Mica. We would like to recognize now Mr. Joseph 
Papovich, the Assistant U.S. Trade Representative with the 
USTR's Office.
    Thank you. Welcome, you are recognized.
    Mr. Papovich. Thank you, Mr. Chairman. Thank you very much 
for inviting us to testify at today's hearing. This hearing 
focuses on a topic that is of crucial importance to the health 
and future of millions of people in Africa and elsewhere, the 
role of our policy in ensuring access to effective medicines 
for AIDS and other illnesses.
    The administration, together with our partners in Africa 
and around the globe, has developed a policy intended to ensure 
access to current medicines to treat AIDS while preventing the 
incentives that will speed the development of effective 
medicines that in the future have the potential to occur and 
prevent disease.
    In the so-called Uruguay Round negotiations that 
established the World Trade Organization, a top priority for 
the United States, as a leading exporter of creative and 
innovative products, was to secure adequate and effective 
protections for all forms of intellectual property, including 
patent protection for American pharmaceuticals.
    In this we have succeeded. All WTO members, over varying 
transition periods, committed to this, through the Agreement on 
Trade-Related Aspects of Intellectual Property Rights.
    Another important component of the trade policy is the so-
called Special 301. Under those provisions of the Trade Act of 
1974, Congress directed USTR annually to identify foreign 
countries that deny adequate and effective protection of 
intellectual property rights and to issue a public report to 
this effect at the end of each April. In the report, countries 
are placed on lists, ranging from most egregious, where trade 
sanctions may ultimately be involved if significant problems 
are not resolved, to a priority watch list or to a watch list, 
where we monitor the situation and urge improvements in 
protection.
    Congress amended Special 301 in the Uruguay Round 
Agreements Act to clarify that a country can be found to deny 
adequate and effective intellectual property protection, and 
thus placed on one of these lists, even if the country is 
otherwise in compliance with its obligations under the TRIPS 
agreement.
    Each year USTR, in consultation with other agencies, 
examines the level of intellectual property protection afforded 
by our trading partners. We analyze legislation, enforcement 
activity, and market trends to arrive at our determination. We 
draw on the reporting from our embassies and consulates 
overseas, but we also receive input from industry associations, 
individuals, and even foreign governments.
    In some instances we agree with the recommendations of 
those outside of the government; in others we do not. For 
example, during this year's Special 301 review, there were 
recommendations to designate South Africa as a Priority Foreign 
Country, which could have resulted in trade sanctions. We chose 
not to do so, however, because we did not agree with their 
assessment of the magnitude of the problem and because we had 
already developed a framework to resolve our differences, which 
we are confident will work.
    The objective of intellectual property protection is 
focused on ensuring incentives for research and development, so 
that new drugs can be developed and commercialized. 
Nevertheless, the application of our intellectual property 
policy is sufficiently flexible to respond to legitimate health 
care crises.
    The administration's approach to patent protection is to 
ensure that the necessary incentives are provided to promote 
rapid innovation of new drug therapies, and to ensure the 
protection of medicines which now exist. Patent protection is 
essential to encourage rapid development of new and more 
efficient drugs to treat AIDS and other illnesses, and for the 
commercialization of these drugs. To effectively remove patent 
protection for such treatments could ultimately lead to a delay 
in the discovery, production, and distribution of medicines 
which could go beyond treatment, prevention, and cure.
    Our goals in the area of patent policy for pharmaceuticals 
are complemented by the administration's efforts to address the 
HIV/AIDS crisis around the world, including Africa, which my 
colleagues are describing. We are also seeking to help 
developing countries create the public health infrastructure 
that will allow AIDS treatments to be utilized effectively.
    Finally, let me say a few words about the case of South 
Africa, in which the committee has expressed some particular 
interest. We acknowledge the serious health care crisis in 
South Africa. Moreover, we appreciate that the Government of 
South Africa has taken measures to improve access to quality 
health care for all its people. This is a goal we and the 
entire administration fully endorse and support.
    We believe this goal can be achieved while promoting 
adequate and effective patent protection for pharmaceutical 
products. Our goal is to chart a course that assists in 
improving access to affordable medicines, while not freezing 
the financial incentives that fuel continued research and 
production of new products. With the shared commitment to 
improve health care and provide intellectual property 
protection, we are continuing our efforts with South Africans 
to find common ground.
    That said, we have been working with South Africa to try to 
ensure that its new Medicines Act can achieve its intended goal 
while being applied in a TRIPS-consistent manner. We believe 
both of these goals are achievable, and we are working with 
South Africa to ensure that the Medicines Act will be TRIPS-
consistent. Indeed, we have been fully engaged in trying to 
clarify these matters with South Africa, with the goal of 
ensuring that the South African Government has the full ability 
to address AIDS and other health issues in a manner consistent 
with its WTO obligations.
    In August of last year, the administration proposed a 
framework for resolution of our differences concerning South 
Africa's Medicines Act. The intent of the proposal was to bring 
together a group of experts, including all relevant 
decisionmakers, to reach our mutual goal of bringing better 
health care to the people of South Africa while assuring 
effective and adequate protection of intellectual property.
    Although neither government-to-government nor industry-to-
government discussions have resulted in a resolution of the 
differences that exist, we are encouraging continued dialog to 
find a solution that ensures that the health concerns of South 
Africa can be addressed in a TRIPS-consistent manner.
    The TRIPS agreement has specific rules that govern 
compulsory licensing expressed in Article 31, which allow for 
their use under certain conditions. We realize that AIDS is a 
special case which may require special measures. Thus, while we 
do not believe that compromising intellectual property rights 
is the solution to the greater problem, contrary to our general 
approach, we raised no objection to compulsory licensing or 
parallel importing of pharmaceuticals on the part of South 
Africa, as long as it is done in a way that complies with 
TRIPS.
    Of course, we are committed to working with South Africa to 
ensure the safety and efficacy of pharmaceutical imports; this 
is the policy of the administration.
    [The prepared statement of Mr. Papovich follows:]

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    Mr. Mica. We now recognize Dr. John Killen, who is the 
Director of the Division of AIDS for the National Institutes of 
Health's National Institute of Allergy and Infectious Diseases.
    Dr. Killen. Thank you, Mr. Chairman. I am pleased to have 
the opportunity to discuss with you recent developments related 
to the human immunodeficiency epidemic. As we have heard 
already today, HIV is a looming tragedy, a global catastrophe 
to public health and a threat to political stability. 
Overcoming it will require a sustained commitment by public and 
private sector partners working together in research and 
prevention.
    Our remarks today will focus on progress in and challenges 
to biomedical research relevant to the control of the epidemic.
    AIDS diagnoses and deaths have dropped significantly in the 
United States in the past 2 years. The same is true in other 
developed countries. Several factors are responsible, as we 
have heard, especially through the increased use of potent, 
albeit expensive combinations of anti-HIV drugs. Unfortunately, 
many HIV-infected individuals have not responded adequately to 
the medications, cannot tolerate their side effects, or develop 
viral resistance to the current drugs, even in this country 
where we have virtually everything going for us.
    In this context, the development of new and better 
therapies remains a priority. Research is focusing on new 
strategies, including drugs that prevent the virus from 
entering a cell, and approaches to boosting an infected 
person's immune response. A number of new agents are in various 
stages of preclinical and clinical testing. We have also heard 
at length today how use of antiretroviral drugs is simply not 
currently feasible in developing countries, where per capita 
health care spending may be only a few dollars per year. 
Therefore, the identification of effective, low-cost tools for 
preventing infection and disease caused by HIV is absolutely 
crucial to slowing the epidemic.
    I will highlight two examples of relevant NIH-supported 
research in this important endeavor.
    In early 1994, an NIH-funded clinical trial showed that 
passage of HIV from an infected mother to her infant could be 
reduced by as much as two-thirds when an intensive regimen of 
AZT is given to a mother and her newborn baby. Unfortunately, 
costs and formidable logistical barriers prohibit the 
widespread application of this proven regimen in most of the 
developing world. To surmount these obstructions, a globally 
coordinated effort was launched to identify simpler, less 
costly alternatives.
    Several recently reported studies have shown that shorter 
regimens of AZT can also be beneficial, reducing transmission 
by as much as 50 percent, but the same logistical and cost 
factors have precluded widespread implementation of these drug 
regimens.
    Last week, scientists from Uganda, Johns Hopkins 
University, and the NIAID reported exciting results of an NIH-
supported study carried out in Uganda which demonstrated that 
just two doses of the antiretroviral drug nevirapine, when 
administered to the mother at the onset of labor and one to the 
baby shortly after birth, reduced the instance of maternal-to-
infant transmission of AIDS--reduced by nearly 50 percent when 
compared to a similar brief course of AZT.
    This study could have profound implications for the 
epidemic of HIV in children worldwide because nevirapine is 
extremely inexpensive and easy to administer. In fact, the 
regimen costs approximately $4, and is 70 times cheaper than 
the previously studied regimens of the shorter course of AZT.
    The development of a safe and effective vaccine for HIV 
remains the Holy Grail of AIDS prevention research. To hasten 
HIV vaccine discovery, many public and private agencies, 
including the NIH, have dramatically increased the resources 
devoted to HIV vaccine research.
    At the NIH we've created new programs to foster innovative 
research on HIV vaccines and to expedite their development in 
clinical testing. In addition, the Dale and Betty Bumpers 
Vaccine Research Center has been established on the NIH campus 
in Bethesda. Since 1998, we have enrolled more than 3,000 
healthy volunteers into 52 clinical trials involving 27 
possible HIV vaccines.
    The results with the combination vaccine approach have been 
especially encouraging. The vaccine appears safe and has 
invoked several types of immune responses that may have an 
important role to play in protection from HIV-associated 
disease. Additional phase 2 trials will open later this year in 
Brazil, Haiti, Trinidad, and Tobago.
    A very important milestone in AIDS vaccine research was the 
initiation this spring of the first AIDS vaccine study in 
Africa. This NIH-supported clinical trial, which is being 
conducted in Uganda, is designed to help determine whether it 
will be possible to design universal vaccines that work against 
more than one strain of HIV.
    Training and infrastructure are essential underpinnings of 
a robust biomedical enterprise, and part of NIH's commitment to 
international AIDS research involves the Fogarty International 
Center's initiative to build HIV training and research capacity 
in developing countries. This vitally important effort has 
expanded research capabilities in a number of countries and 
facilitated many NIH international AIDS research initiatives.
    Two years ago, President Clinton set a national goal of 
developing a useful HIV vaccine within 10 years. We are well 
positioned in our attempt to meet this goal with an 
extraordinarily strong program of basic and applied research 
that is now under way. As we work to contain the global HIV/
AIDS epidemic, it is essential that public and private sector 
partners strengthen their commitment to working together to 
speed HIV vaccine development, refine prevention efforts, and 
develop new treatments for those infected with the virus.
    Thank you for the opportunity to address the subcommittee.
    Mr. Mica. Thank you.
    [The prepared statement of Dr. Killen follows:]

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    Mr. Mica. I would like to now recognize Dr. Timothy 
Dondero, who is the Chief of International Activities Branch, 
Centers for Disease Control and Prevention.
    You are recognized, sir. Welcome.
    Dr. Dondero. Thank you, Mr. Chairman, and members of the 
subcommittee.
    The HIV epidemic continues to be a major challenge with 
over 33.4 million people estimated to be infected worldwide. 
Many horrifying statistics have already been cited in this 
hearing. For the sake of time, I will not repeat those, but 
refer you to my written testimony.
    Unlike in the United States, most infections in the 
developing world are transmitted through heterosexual 
intercourse. The second most common route of transmission is 
from infected mothers to their children. I would like to draw 
your attention to the graph over on the right. It shows the 
extremes to which the HIV epidemic has reached the populations 
of the developing world.
    These data are the percent of child-bearing women infected 
within countries. The lower group, the large, long bars, are in 
Africa, predominantly east and southern Africa. What you see is 
the massive penetration of HIV into the general population, 
especially in countries in eastern and southern Africa. Reports 
from four southern African countries, Botswana, Namibia, 
Botswana, and Zimbabwe indicate from a fifth to a quarter of 
their entire adult population age 15 to 49 are now infected 
with HIV, and in Botswana over 40 percent of the child-bearing 
women in cities are now infected.
    Countries in other parts of the world, including Thailand, 
Cambodia, and India, have also been heavily impacted, although 
not on a proportional basis yet anywhere near the impact in 
southern and eastern Africa.
    Global trends in HIV/AIDS indicate that women are at 
greater risk than men from heterosexual transmission. Women 
then can pass the infection to their babies. Without 
interventions, roughly one-quarter of the babies will become 
infected by the time of birth, and an additional 5 to 15 
percent will get infection through breast-feeding.
    It is also important to note the interaction between HIV 
and other diseases, specifically tuberculosis and sexually 
transmitted diseases. Worldwide, 8 million cases of TB and 3 
million deaths occur each year. Ninety-five percent of these 
occur in countries with low per capita income. Tuberculosis 
kills more adolescents and adults in the world than any other 
single infectious disease, although part of this is, in fact, 
due to AIDS. The HIV epidemic has significantly increased the 
TB epidemic.
    People who have latent or inactive TB from exposure earlier 
in their lives run a high risk of developing active TB if they 
become infected with HIV, a risk 100 times greater than for 
someone without HIV infection. Increased TB in AIDS patients 
enhances the potential for the spread of drug-resistant TB 
organisms, both locally and globally.
    Also linked to the HIV are sexually transmitted diseases. 
STDs cause a two to fivefold increased risk for HIV 
transmission. STDs facilitate HIV transmission by increasing 
shedding of the virus, and also they enhance the susceptibility 
to HIV through increased likelihood of penetration of the virus 
into the body. STD treatment is part of prevention of HIV.
    But there are actually some glimmers of hope. Several 
countries have shown improvements, including Uganda, Tanzania, 
Cote d'Ivoire, Senegal, and Thailand.
    As a quick example, in the country of Uganda, over the past 
4 to 5 years there has been significant and encouraging 
reductions in HIV infection in its population. Young women 
attending antenatal clinics have had a one-third reduction in 
HIV prevalence between the early 1990's and 1997. Behavioral 
studies have shown a 2-or-more-year increase in the age of 
first sexual intercourse for youths, a 9 percent reduction in 
casual sex, and a 30 to 40 percent increase in condom use.
    An important element of Uganda's AIDS control is a very 
intensive HIV counseling and testing program fiscally supported 
by USAID with CDC technical expertise. This has provided HIV 
testing and counseling to upwards of one-half million people 
since 1990 through the AIDS Information Center, a nongovernment 
organization.
    Very important has been the strong political leadership in 
the country as well, with the President and First Lady of 
Uganda themselves frequently addressing HIV-related issues, 
making these acceptable for public discussion.
    Because the epidemic in much of the world is expanding, the 
most critical public health approach is prevention, for a 
number of the reasons which have been discussed here. For the 
sake of time, I will not present again the arguments of concern 
about treatment as opposed to prevention.
    The CDC's role, in brief, has been focused in international 
efforts offering assistance to countries with great public 
health needs who seek assistance conducting collaborative 
research and training on prevention interventions and serving 
as partners in global initiatives.
    Although our geographic focus is limited, we assist in the 
application of U.S. scientific advances within other countries, 
such as rapid HIV testing, prevention of mother-to-child 
transmission, refinement and installation of HIV diagnostics 
and research techniques, and a variety of other things 
described in my testimony.
    The CDC has a strong existing international field station 
structure in Cote d'Ivoire, Uganda, Kenya, Thailand, and Asia, 
as well as a long history of providing technical assistance. We 
also have resident advisors knowledgable in HIV in a number of 
countries.
    I appear not to have time to go through some of the key 
elements of prevention. I would note that in the President's 
recently submitted budget amendment, under this initiative, the 
CDC would expand its role internationally by assisting with the 
establishment of surveillance systems to understand the health 
impact of the disease, and by providing additional technical 
assistance and training to both improve and expand prevention 
and treatment programs.
    I will not describe the other elements key in my verbal 
testimony for prevention. I would just note in conclusion that 
while there are a few countries we can point to demonstrating 
improvement in the HIV/AIDS epidemic, continued leadership 
within the countries and international expertise and resources 
are necessary to implement effective prevention and treatment 
programs. Without these, the outlook for the global AIDS 
epidemic remains grim.
    Thank you for allowing me this opportunity.
    Mr. Mica. Thank you, Dr. Dondero. Would you like us to make 
that entire statement part of the record, so it is complete?
    Dr. Dondero. Yes, sir.
    Mr. Mica. Without objection, so ordered.
    [The prepared statement of Dr. Dondero follows:]

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    Mr. Mica. Unfortunately, we have a series of votes coming 
up. I am going to ask just a couple of quick questions.
    I see the chart here, Ms. Thurman, about how the money is 
being expended. The bulk of it is for prevention, which is 
recommended by Congressman Berry and others, and we heard Ms. 
Nkhoma talk about people who are infected now. I do not see any 
money for treatment now. There is no money for treatment?
    Ms. Thurman. No, sir, there is money for treatment in the 
home-based and community care piece. There will be some money 
provided for medicines for opportunistic infections.
    Mr. Mica. This says $23 million to deliver counseling, 
support, and basic medical care.
    Ms. Thurman. Those medicines are included in the basic 
medical care.
    Mr. Mica. That, again, is a concern.
    Also my second part of this quick question to Mr. Papovich 
is that getting low-cost drugs available is a problem. It 
appears that it has not been our trade policy to encourage that 
actually. We have worked against that, as far as our policy in 
South Africa, which Mr. Jackson said should be the focus of our 
attention, because it sort of sets the pattern.
    I will tell you what, I am not going to ask you to respond 
now. That is my quick question. I am going to submit to each of 
you questions in writing.
    I yield to the gentlewoman from Hawaii.
    Mrs. Mink. Thank you. I have a whole host of questions, 
too.
    While I appreciate the importance of prevention and 
education, I think the course of these hearings is really to 
investigate the issue of treatment and to what extent the U.S. 
policies have related to this issue.
    Ms. Thurman, could we have a 10-year listing of the efforts 
on treatment by the U.S. Government to African countries, and 
exactly, over the total budget, what percentage went to the 
treatment component?
    Ms. Thurman. Yes.
    Mrs. Mink. And then to Mr. Papovich, on the intellectual 
property question, you said that it was important to create 
public health infrastructure in order to provide the AIDS 
treatment. My question is if we are going to spend efforts in 
improving the infrastructure, how does that go along with 
access to the drugs themselves? Is that part of the policy 
inference when you talk about infrastructure?
    Also, the question of the WHO, if you recognize AIDS in 
Africa as a national emergency, is this going to allow you to 
distribute the drugs without the patent owner's consent? 
Because that is the basic question that we are investigating.
    And to Dr. Killen, when you talked about these new 
discoveries that have been made by NIAID and the Health 
Ministry with respect to less expensive drugs, are we talking 
about less expensive drugs that can be distributed without 
patent applications and barriers? I think that really is the 
question. Those are the questions I have.
    Mr. Mica. We will get those in detail.
    I yield briefly to my colleague.
    Ms. Schakowsky. I have one sentence because we have to go 
vote.
    I wanted to ask Mr. Papovich if you would provide us with 
the language that would be TRIPS-compliant and not subject any 
country to any Special 301 designation and still allow for 
compulsory licensing and parallel importing. It seems as if in 
these negotiations we clearly have something in mind, and I, 
for one, would certainly like to know what that language is and 
would appreciate getting that.
    Mr. Mica. Thank you. We will have additional questions. I 
apologize, but we are going to have three votes, and it is 
going to be 45 minutes to an hour. We will recess this hearing 
until quarter of the next hour. We will excuse you, and we will 
have the next panel at that time. We will have a break for 
lunch. But you will have additional questions submitted.
    [Recess.]
    Mr. Mica. I would like to call this subcommittee meeting 
back to order.
    And our next order of business is to hear from our third 
panel of witnesses. Our third panel of witnesses I will 
introduce. Dr. Allen Herman, dean of public health of the 
Medical University of Southern Africa. We have Mr. James Love, 
director of Consumer Project on Technology; Dr. Peter Lurie, 
medical director of the Public Citizen's Health Research Group; 
Mr. Eric Sawyer, executive director of the HIV Human Rights 
Project, also associated, I guess, with ACT UP in New York; and 
Dr. John Siegfried, senior medical officer of the 
Pharmaceutical Research and Manufacturers of America.
    I would like to welcome all of our panelists. As I've said 
in the past, this is an investigations and oversight 
subcommittee. If you would stand, please, and be sworn in.
    [Witnesses sworn.]
    Mr. Mica. The witnesses all indicated--answered in the 
affirmative.
    I would like to welcome each of you. We're going to run our 
little timer here. If you have a lengthy statement, we would 
like you to summarize it, and we will put the entire statement 
in. If you have additional information and/or data, we will 
also include that as part of the record. And we will run the 
timer on that; then we will have an opportunity for questions.
    First, I will recognize Dr. Allen Herman, with the Medical 
University of Southern Africa.

  STATEMENTS OF ALLEN HERMAN, DEAN OF PUBLIC HEALTH, MEDICAL 
 UNIVERSITY OF SOUTHERN AFRICA; JAMES LOVE, DIRECTOR, CONSUMER 
 PROJECT ON TECHNOLOGY; PETER LURIE, MEDICAL DIRECTOR, PUBLIC 
    CITIZEN'S HEALTH RESEARCH GROUP; ERIC SAWYER, EXECUTIVE 
  DIRECTOR OF HIV HUMAN RIGHTS PROJECT, ACT UP, NEW YORK; AND 
JOHN SIEGFRIED, SENIOR MEDICAL OFFICER, PHARMACEUTICAL RESEARCH 
                  AND MANUFACTURERS OF AMERICA

    Dr. Herman. Good afternoon, Chairman Mica and distinguished 
members of the committee. It's a privilege for me to testify 
before you on the subject of such fundamental importance to the 
people of Africa. The pandemic of HIV/AIDS has been adequately 
described to all of us this morning. And there is a tendency 
sometimes in this description that one is left slightly stunned 
by the magnitude of the problem.
    So what I would like to talk to you about today are some 
specific incidences where this epidemic has particular 
influence on the society in South Africa, and then to talk a 
little bit about what we are doing at the National School of 
Public Health, which is associated with the Medical University 
of Southern Africa.
    By way of introduction, I am the dean of South Africa's 
National School of Public Health. This is a school that was one 
of the new schools that was formed by President Mandela's 
Cabinet in 1997, and I was asked by my old classmate, then 
Minister of Health, Nkosazana Dlamini Zuma, to be the first 
dean.
    The School of Public Health has a particular interest in 
the issue of AIDS, and for us, we have become convinced that we 
have to spend most of our time dealing with this epidemic in a 
very practical fashion. Unfortunately, HIV/AIDS has a grave 
effect on the middle class and on the leadership of countries 
in Africa. In fact, in Africa, AIDS has truly been a disease 
with no class distinction. This reality could and will lead to 
the destruction of invaluable human resources needed to 
continue the development in African countries.
    Let me give you an example, a stark one. If I chair a 
faculty meeting, it is probably highly likely that a member of 
my faculty will be dead in a few years from HIV/AIDS. To 
replace a faculty member is an expensive proposition. You have 
to train a person up to a doctor level so that they can teach 
and do research in the country. If I go to my students, and my 
students are the largest number of public health students in 
South Africa at the moment, at least a quarter of them will die 
from AIDS in the next few years.
    So for us it's a fairly real problem that both the people 
who are attempting to do something about the epidemic and the 
communities in which we work are very stretched by this 
epidemic.
    President Mandela said in his February 1997 address to the 
World Economic Forum that the pandemic is a threat that puts in 
the balance the future of nations. AIDS kills those of whom 
society relies to grow the crops, work in the mines and the 
factories, run the schools and the hospitals and govern 
countries. It creates new pockets of poverty where parents and 
breadwinners die, and children leave school earlier to support 
the remaining children.
    The problem of access to adequate health care for 
individuals infected and affected by HIV/AIDS is a very complex 
one. There are a number of barriers to adequate health care for 
individuals like this. These include the costs of providing 
supportive health and social services essential for safe use 
and compliance, the setting up and/or strengthening of 
treatment units, laboratory facilities, drug delivery systems 
and the training of health care professionals, and the cost of 
drugs.
    An interesting example; I had a conversation last week on 
my way back to the United States with the Minister of Health, 
the Secretary of Health for the province of Gauteng. Gauteng 
means a place of gold, and it's the province where Johannesburg 
is, and the Minister of Health for that province, Dr. Gwen 
Ramakgopa, is a 2nd-year student in the School of Public 
Health; she called me up to talk about the problem that she 
had, a budgetary problem.
    The health budget for that province is 5.6 million rand, 
which is around a billion--around $1 billion, and she has a 
300-million rand shortfall. And as we're talking about this, 
she indicated that HIV/AIDS was the biggest problem in two of 
her largest hospitals. One is the Chris Hani Baragwanath 
Hospital, south of Johannesburg in the township of Soweto, and 
the other is the Johannesburg General Hospital. And both of 
these hospitals had accumulated a 300-million rand deficit, 
about a $60 million deficit.
    As I was speaking to Dr. Ramakgopa, she said to me that it 
was not a problem of access to drugs that she was dealing with, 
but it was a problem of a broken-down health care system that 
needed fixing. So part of our work in the next few months with 
the Department of Health for the province of Gauteng, we will 
be bringing consultants from the National School of Public 
Health to the Ministry of Health to help them sort through the 
management problems that they have.
    At a smaller level, one of my other students who runs a 
small hospital in the eastern province that both President 
Mandela and President Mbeki come from, have a budget of about 5 
million rand a month, and that's just about under $1 million a 
month, and about 10 percent of the patients who come into the 
hospital die. They leave the hospital through the way--by way 
of the morgue. Most of these patients are dying from HIV/AIDS.
    The problem that we face is that most of these patients are 
young, and the students asked the question as to how he could 
best use his resources which he thought were relatively ample 
to deal with the problem of managing the health care of a 
specific district in the eastern province. Those are the kinds 
of problems that students bring to us in our university.
    I would like to talk a little bit about what we think are 
adequate or appropriate approaches to the pandemic. I see my 
time is up. So I will go through this fairly quickly. First, 
there's a need to train health professionals in public health 
skills of screening and surveillance; that is what we are doing 
at the moment. We're training about 150 people every year to 
the level of a master's degree in public health.
    There's a need to train health professionals to treat 
patients with HIV/AIDS. There's a need to develop 
infrastructure, which is laboratory support for this epidemic. 
And there's a need to deal with the cost of resources.
    I will conclude by just making a very short story about 
this issue. My older brother, who works in one of the most 
devastated communities, works in a hospice that cares for 
babies dying of AIDS, and he tells me that it takes about 5 
hospital visits before the baby dies of AIDS. He lives in a 
very poor community, and this is what he spends most of his 
free time doing as a volunteer in a hospice that cares for 
babies dying of AIDS.
    And he tells me that part of his free time he spends 
working in a hospice caring for adolescents dying of AIDS. His 
request to me as the dean of the National School of Public 
Health, is not to deal with the cost of drug issues, but his 
request to me has always been quite specific: How do you 
prevent young people in South Africa from getting the disease 
in the first place? He sees this as the real devastation in the 
country, and not the issue of costs. He does not underplay the 
issue of costs, but he sees this as the more critical problem.
    Thank you very much.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Dr. Herman follows:]

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    Mr. Mica. I would like to now recognize James Love, the 
director of the Consumer Project on Technology.
    Mr. Love. Thank you. My name is Jamie Love. I work in 
Washington, DC, for a consumer group. I've been working on 
disputes involving intellectual property and health care since 
1991, when I was asked by a subcommittee of the Government 
Reform Committee to take a look at a contract between Bristol-
Myers Squibb and the National Institutes of Health on the 
development of tax law, the government-funded invention.
    I have subsequently not only done a lot of work in the 
United States on issues relating to the research and 
development and patent issues, but I've done a lot of work 
internationally with governments, with public health groups, 
and with international organizations in different parts of the 
world. I will be attending meetings in Pakistan next week about 
trade policy and patent policy and health care. And I've been 
working a lot in the last couple of years about issues relating 
to access to AIDS drugs.
    My testimony has been submitted really in two different 
parts. One is a prepared statement, and the other one is marked 
additional materials. The additional materials have five 
appendixes that contain certain documents or information I may 
refer to. I'm not going to read my statement, but I would like 
to highlight a few points.
    First of all, the issue about whether or not you can do 
things like compulsory licensing or parallel imports is 
something that people involved in U.S. trade policy have held 
out as some complicated area or some controversial areas as 
though there's some mystery about whether or not these 
countries, like Thailand or South Africa, or places like that, 
have to find some magic formula to be able to accomplish things 
like this.
    In fact, the legal issues, at least from a point of view of 
international law, are really not complicated. In the case of 
parallel imports, for the benefit of the committee, which is if 
you, for example, go to Canada and buy Claritin for $61 instead 
of $218 in the United States, and import it back here; that 
would be called a parallel import.
    That's clearly permitted under the international 
agreements, under the WTO agreements. There's an Article 6 that 
says whatever a country does--whatever it does in that area is 
up to the country; that there's nothing in the WTO agreement 
that would ever stop a country from doing it. And, in fact, 
England does it; the Netherlands, the Danes do it. This happens 
in areas outside of pharmaceuticals as well.
    We don't have trade sanctions against England about it. We 
don't have trade sanctions against Germany about it. We don't 
have trade sanctions against Denmark or the Netherlands. We do 
have trade pressures against South Africa on this. We do have 
trade pressures against Thailand on this. We have a lot of 
trade pressures on poor countries on compulsory--rather on 
parallel imports; it's legal, everybody knows it's legal, and 
the basis of U.S. policy is what they call TRIPS plus, which is 
to take what's in the WTO agreement as a starting opening 
statement, and then see what you can get up on top of that.
    So when Mr. Papovich from USTR gets up before this 
committee and says USTR, after 2 years of negotiations with the 
Health Ministry and the government and the President of the 
country are trying to figure out whether or not South Africa 
has our permission to pass a law in their own Parliament to do 
parallel imports, if we're grandiose enough to permit them to 
actually do that, we're still trying to figure it out, whether 
it's legal or not. I would represent that that's not a truthful 
statement about the nature of the dispute; that everybody from 
the Vice President, to the Trade Representative, to the 
Department of State, to the Patent and the Trademark Office, 
and throughout the government understands as we do, as the LPO 
does, as the WTO does, as every expert in the field knows that 
parallel imports are not barred by trade agreements, and your 
own legislative counsel in Congress will tell you it is not 
even barred under U.S. patent laws.
    It's not a question of patent rights of the United States. 
So on the area of parallel imports, it's crystal clear that the 
governments have the right to do it, and the only thing that is 
stopping South Africa, other than the litigation by drug 
companies under their own laws, just like big corporations sue 
the United States Government under our laws, and we try to pass 
like the Telecom Act, it always has to do with the domestic 
litigation, but politically it's pressure from the United 
States. And it's not just been in South Africa, it's been in 
many, many countries.
    No. 2, compulsory licensing. Does the WTO permit compulsory 
licensing? Of course, it does. And how do we know that? Well, 
because the U.S. Government wrote most of the provisions about 
compulsory licensing, and we wrote them because we have 
compulsory licensing under the Clean Air Act. And we have 
compulsory licensing of patents for nuclear power. And we have 
compulsory licensing for public health purposes under the Bayh-
Dole Act. And we have compulsory licensing in the United States 
for government use under eminent domain statutes. If the 
government wants to use patents in the United States, it can 
deputize Lockheed or General Motors or any private corporation 
to use any patent that it wants or any copyright that it wants 
and just do it.
    And all you can do as the patent owner is seek compensation 
from the government. You can't even get an injunction against 
the U.S. Government if they want to use your patent. That is 
the law in the United States of America. And we can also do it 
on antitrust laws. There's 5 separate laws, ways that we do 
compulsory licensing in the United States of America. The 
government does it a fair amount.
    Now, the Government in South Africa through the Public 
Health Service would like to do compulsory licensing, because 
they know they can bring the prices down of many different 
drugs, in some cases 90, 95 percent. It's a difference of life 
or death in a wide range of areas.
    If we oppose it, it's not based on legal grounds, it's 
based upon policy. It's our decision, it's our public policy 
decision, not to let them do it.
    Does that mean my time is up, the red thing there?
    Mr. Mica. If you can try to wind up.
    Mr. Love. I will, I apologize.
    Now, there's another issue that I think people recently 
have been trying to call attention to, and that is the U.S. 
Government pays for a lot of research on the pharmaceutical 
drugs. The U.S. Government developed on its own ddI and ddC, a 
couple of AIDS drugs. There's a d4T, which is an important one 
that was invented at Yale. The U.S. Government has grants 
that--there are patents on 3TC, which is another important AIDS 
drug; Norvir, which is the first protease inhibitor, which was 
developed by Abbott Laboratories in a government grant.
    All of these cases, and there are many more, the U.S. 
Government has patent rights that they have alienated and they 
cannot alienate by government regulations and statutes. And the 
law in the United States says the following on these 
interventions: It says that the U.S. Government has a right to 
practice and have practiced the invention on behalf of the 
United States and on behalf of any foreign government or 
international organization pursuant to any existing or future 
treaty or agreement with the United States.
    What does that mean in practical terms? It means we could, 
by the stroke of a pen, without an appropriation, without a 
law, just by doing it, give the World Health Organization the 
permission to use patents on inventions, paid for by the 
taxpayers and use that to get medicine out to people who are 
sick and who are dying.
    Our decision not to do it is a deliberate thing, it's a 
policy. It's our policy that the World Health Organization 
cannot use our patents. Why do we do it? We do it to protect 
the domestic drug industry. We don't do it to protect patients.
    The World Health Organization wants this authority. They've 
asked for this authority. There's discussions about this. We've 
asked, and many groups have asked, the United States to do 
this. You can help if you could encourage the administration to 
enter into a memorandum with the World Health Organization to 
permit these intellectual property rights be used.
    I've exceeded my time. The rest of my statement is, I 
think, here, and I would be happy to answer questions or 
respond to written questions later. Thank you.
    Mr. Mica. Without objection, what we will do is make your 
entire statement part of the record.
    [The prepared statement of Mr. Love follows:]

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    Mr. Mica. And now we will recognize Dr. Peter Lurie, who is 
with the Public Citizen's Health Research Group.
    Dr. Lurie. Good afternoon. My name is Peter Lurie, a person 
born in South Africa who has done clinical work both in South 
Africa and elsewhere in the developing world. I've also done 
quite a bit of international AIDS research both inside South 
Africa and elsewhere in Africa, Asia and South America.
    What I want to do in my time is to address two arguments 
that Dr. Siegfried is likely to raise in opposition to the 
arguments in favor of compulsory licensing and parallel 
imports, and they are: one, the argument of drug resistance 
made rather forcefully and inaccurately on the Peter Jennings 
clip that you showed; second, the argument that somehow 
compulsory licensing or parallel imports will reduce 
pharmaceutical profits to the point that they indeed will dry 
up.
    Let me talk about viral resistance first. Tom Bombelles, 
who is with the Pharmaceutical Research and Manufacturers 
Association, said--actually it might have been on that 
program--``Just giving people drugs without the proper 
treatment can create drug-resistant strains of HIV. It can make 
people sicker, not better. And that threatens AIDS patients 
everywhere around the world.''
    Now, we agree that resistance is an important issue and 
something to be avoided if at all possible. Before I even 
address that, though, I want to make two points about 
compulsory licensing and parallel imports. The first is that 
compulsory licensing and parallel imports do not require any 
country to do them. It is simply an opportunity that countries 
can choose to exercise or not. But if you prevent compulsory 
licensing and parallel imports in blanket fashion, what you do 
is you rob the countries of their ability to choose for 
themselves. We should not be making these arguments in 
paternalistic fashion and preventing governments in choosing 
for themselves how they wish to spend their money.
    Second, the viral resistance argument is actually being 
made against the totality of compulsory licensing and parallel 
imports, but many of the drugs that would be affected by this 
are not only not AIDS drugs, but they're not even for 
infectious diseases. Now we have this resistant-strain argument 
being used in ways that might prevent access to drugs for 
cancer or for heart disease.
    Now let's talk about HIV resistance directly. What the 
pharmaceutical industry seems to be arguing is the following: 
For a patient to be worse off due to the development of viral 
resistance, one would have to believe that a patient who is 
partially adherent or compliant to anti-HIV therapy and, 
therefore, develops a resistant HIV strain is worse off than if 
that same person had not been treated at all.
    There's no scientific evidence for this assertion at all. 
First, many patients who take anti-HIV drugs do not develop 
resistance even if they're noncompliant. Of course, the more 
compliant they are, the better. Second, even for those who 
might develop resistance, the change in the viral genetic 
material that results in resistance is different than the part 
of the genome which is important for aggressiveness. And most 
of the time, mutant microorganisms reproduce less efficiently 
than nonmutants.
    A Review in the Journal of the American Medical 
Association--we made this point in another article cited in my 
testimony--made the point that HIV strains that are resistant 
to drugs are probably more difficult to transmit to other 
people. So, if anything, the scientific evidence, which is not 
strong, suggests that the resistant strains are less aggressive 
and more difficult to transmit than those that are not 
resistant. So the argument is not based on any science 
whatsoever.
    Really, the decision of whether or not to treat a patient 
should be something that is between a patient and their doctor. 
But to oppose compulsory licensing and parallel imports is a 
blunt instrument. Physicians and patients can no longer make 
that case-by-case assessment, and instead people will be denied 
drugs simply on the basis of where they happen to live.
    Assuming that all residents in developing countries are 
incapable of adherence is both insulting and historically 
inaccurate. Developing countries are also not monolithic when 
it comes to public health capacity, and it's condescending to 
lump them together in order to justify withholding effective 
treatments from them. There are enormous differences both 
between developing countries and within them, and that needs to 
be taken into account.
    Again, the countries should be allowed to choose for 
themselves. The solution to the problem of lack of drug 
adherence to often complex AIDS regimes is not to withhold 
drugs from people. The solution is, as Dr. Herman said, to 
improve the infrastructure, and all this needs to be done 
together.
    Could anyone imagine turning to a developing country and 
saying to them, ``You might develop resistant strains of 
malaria and tuberculosis, and consequently you shouldn't treat 
those patients and just let those diseases remain untreated?'' 
That's the argument that is being made here.
    Lack of adherence to HIV drugs is a problem in the United 
States as well. Will we, therefore, apply the same logic to 
populations in this country? Are we going to identify specific 
risk groups or socio-economic sectors of this country and say, 
``Sorry, you are not likely to be adherent, you cannot have 
these drugs?'' The lack of health care infrastructure is 
critical. It needs to be built up; to use the lack of 
infrastructure as an excuse to not address the pricing 
mechanism seems to be completely inappropriate.
    One of the reasons that the infrastructure in HIV is as bad 
as it is is because there's no particular reason to test people 
when you're not going to be able to provide them treatment at 
the end. So to have treatment available will provide the 
incentive for people to improve the infrastructure.
    In sum, on both policy and virological grounds, the 
possible emergence of drug-resistant strains provides no 
support for arguments against compulsory licensing and parallel 
imports.
    I'm just going to briefly address what we call the R&D 
scare card, the argument made by the pharmaceutical industry 
that research will dry up in the event that compulsory 
licensing and parallel imports--legal mechanisms, as Mr. Love 
pointed out--are implemented. This seems to argue that patients 
in developing countries would be better off right now without 
drugs while we wait patiently until later drugs are developed, 
which may or may not be available after all.
    And similarly, the history of international drug 
development teaches us that waiting for the new, equally 
effective, but less expensive regimens is not something that 
really has shown a lot of benefit over the years. Furthermore, 
pharmaceutical R&D expenditures have actually doubled between 
1990 when Congress imposed some price restraints on Medicaid 
drugs, and 1995; we heard the R&D scare card brought out in 
full force in 1990.
    The pharmaceutical industry is uniquely profitable; the 
most profitable industry in this country, whether measured by 
sales, by assets or by equity, and since 1989, pharmaceutical 
companies' return on equity has been at least 1.7 times the 
median of all other U.S. industries.
    Given these extraordinary profits and the failure of the 
drug industry to make critical medications available for 
developing country patients, we urge you to call the R&D scare 
card bluff.
    In conclusion, neither the viral resistance nor the R&D 
scare card arguments provide support for closing these legal 
trade measures. As it happens, the sub-Saharan Africa market 
represents a scant 1.4 percent of the global pharmaceutical 
market. An explanation for the pharmaceutical companies' 
opposition to compulsory licensing and parallel import is to be 
found elsewhere: in their desire to not have their irrational 
pricing practices exposed--we have drugs available in Europe at 
often 50 percent lower than they are here--and to maintain 
their high profit margins.
    We suggest that providing potentially lifesaving drugs to 
residents of developing countries should have a higher 
priority. Thank you.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Dr. Lurie follows:]

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    Mr. Mica. And now I would like to recognize Mr. Eric 
Sawyer, executive director of the Human Rights Project. 
Welcome, and you're recognized, sir.
    Mr. Sawyer. Thank you, Mr. Chairman, members of the 
committee and ladies and gentlemen. My name is Eric Sawyer. I'm 
the director of the HIV/AIDS Human Rights Project. I'm also one 
of the founders of ACT UP NY, an activist group that was formed 
in 1987 to focus attention on the lack of governmental action 
with respect to AIDS and to advocate for access to medical 
treatment for AIDS and related opportunistic infections.
    I also cofounded a housing group that houses more than 
2,000 people with AIDS and have organized AIDS conferences in 
more than eight countries, three of them in the developing 
world. I'm also a person that has been living with AIDS for 
nearly 20 years, thanks to my privileged access to a 
sophisticated and expensive regime known as salvage therapy. 
This regime includes daily doses of five antiretroviral drugs. 
They include two protease inhibitors. These drugs cost me 
$30,000 a year. But at present, my viral load is undetectable. 
My T-cell count has risen to the highest level it has been in a 
decade.
    I'm more well today than I've been in 10 years, and I'm 
happy to be alive and to be here today, but I'm also extremely 
sad because I represent less than 2 percent of those with AIDS 
for whom HIV has almost become a manageable disease. There are 
nearly 40 million men, women and children with HIV in the world 
today, and 98 percent of them have no access to these drugs.
    For 98 percent of those 40 million people, this disease 
remains, and there's no other term for it, a death sentence. It 
certainly was a death sentence for one of my heros, Auxcillia 
Chimusoro. Auxcillia was a brilliant woman from Zimbabwe, full 
of life and energy. She had just found out she had HIV when I 
met her in 1992, after her husband and infant child died of 
AIDS.
    She quickly started the first support group in her country 
for women living with HIV by coming out as HIV-positive and by 
opening her home to others. Her bravery was rewarded with a 
fire-bombing and with her children being beaten in school. 
Auxcillia responded by starting a sewing project to give AIDS 
widows in her village an alternative to exchanges for sex, 
income, and food. Then she went on to start a project to care 
for AIDS orphans.
    To have access to health care, Auxcillia traveled overnight 
on three different buses to reach a doctor who could treat her. 
Even though Auxcillia developed her HIV infection 10 years 
after I became symptomatic, she's dead today, and I'm alive. 
And that's wrong.
    Auxcillia deserves to be alive and here with us today. The 
world is a poorer place because of her loss and the loss of 
millions of others like her. And even if we were all--
governments, NGO's, researchers, activists, pharmaceutical 
companies--to come together on this very day in pursuit of a 
common goal, there would be millions more like Auxcillia who 
will die before their time. Make no mistake about it, we're 
witnessing a global crisis of unprecedented proportions. It 
will leave a fossile-like imprint on human civilization for 
decades to come.
    This very committee hearing, in my opinion, is of historic 
importance, and I urge you to listen to the testimony of 
everyone you hear today with courage and compassion, but 
especially with a sense of urgency.
    During the few minutes that I have left, I'm going to zero 
in on pricing issues for a few drugs to treat AIDS-related 
opportunistic infections. My point is this: The kinds of 
combination therapies that I have privilege to access are far 
beyond the resources of most men and women in the developing 
world. They are somewhat difficult to administer and to 
supervise in those countries, but a lot of these drugs are one 
tablespoon twice a day.
    Combination therapies, in my view, are not the most 
important drugs that we should be talking about, they're a 
second-line priority. The first-line priority for extending the 
lives of people living with HIV in the developing world should 
be access to very inexpensive drugs that exist to treat and 
prevent the development of opportunistic infections that kill 
most people with AIDS.
    I'm especially troubled that the pharmaceutical industry 
focuses all of this attention on these overpriced cash cows 
that they like to point out are difficult to use. It would be 
far more important and a far more immediate benefit to people 
with AIDS if they could have access to these inexpensive, easy-
to-use treatments that prevent the opportunistic infections 
that kill people with AIDS.
    A few brief examples. Most people with AIDS die of 
preventable illnesses like tuberculosis, pneumonia, fungal 
infection, or dehydration due to diarrhea. Prior to the advent 
of these triple therapies, significant reductions in deaths for 
people with AIDS were achieved here in this country by 
providing access, first, to these inexpensive easy-to-manage 
drugs for opportunistic infections.
    What are the actual costs of these drugs I'm talking about? 
TB prophylaxis, to prevent the development of TB, in a World 
Health Organization program costs less than $15 a year per 
person. PCB prophylaxis in HHS programs here in the United 
States, the most expensive drug market, costs $24 a year. NTZ, 
a wide-spectrum antiparasitic drug to treat diarrhea, and some 
of the older antifungal drugs cost far less than that $15 for 
those Uganda TB treatments.
    For under $70 a year in U.S.-based costs, most of the 
related opportunistic infections that kill people with AIDS can 
be prevented, delaying the deaths of those people for several 
years, perhaps long enough for them to raise their children. 
Generic production of these drugs and bulk buying by 
organizations like the World Health Organization could further 
reduce those prices.
    Planned Parenthood-type programs in the developing world 
have brought the cost of birth control pills down to 50 cents 
per month in some developing worlds. These drugs are 
affordable. In other words, a partial remedy to the global AIDS 
crisis in the form of prolonging the lives of millions of 
people while we search for a vaccine, while we search for a 
cure, goes unused, and the importance of implementing trade 
policies such as compulsory licensing and parallel importing is 
that these policies can actually drive prices down on these 
expensive drugs by introducing generic equivalents.
    At the same time that we gear up our efforts to 
dramatically expand access to the drugs to treat opportunistic 
infections, we must start to investigate policies like parallel 
importing and compulsory licensing or get the drug companies to 
introduce two-tier pricing systems to reduce the price of these 
expensive combination therapies so that they're affordable. 
Such efforts are already underway in India, proof that it can 
and it must happen. In India, generic AZT costs $34 for a 
month's supply. The same drug, the same quantities, are sold at 
$250 a month by Glaxco-Welcome in India.
    For too long, in my view, the U.S. Government has allowed 
the commercial interests of the pharmaceutical industry to 
drive trade policy and, frankly, to avoid meaningful debate on 
what our public policy should be with respect to global health 
issues like AIDS. What is our responsibility as Americans? Now 
that we live in a global village, do we really understand what 
it means to live or far too often to die in a global village? 
What should our response be? Should it be $100 million like 
Vice President Gore recently announced?
    This is a welcome initiative, but it's a drop in the vast 
ocean of suffering created by AIDS and other infectious 
diseases, and it amounts to only $3 for each of the world's 34 
million AIDS cases. What I believe is required is a 
comprehensive and compassionate policy that is driven by an 
informed vision of our responsibility as Americans to a global 
society.
    It's time for us to realize that the public health of South 
Africa is also the public health of the United States, and it's 
time to act accordingly. It's time to challenge greed. It's 
time to promote debate. It's time to recognize that public 
health is never about them, it's about us.
    The lesson that we can learn from AIDS, and I do believe 
that there is a lesson, is that we must respond as one.
    In conclusion, I would like this committee to consider the 
following: Please call for congressional hearings on the real 
costs of drug development, to identify who actually pays for 
the research and development of the critical medicines. I 
believe that in many cases you will find out it's the U.S. 
taxpayers. Call for hearings on drug pricing practices, and 
then really work to pass fair pricing legislation. Pass 
legislation that will make it illegal for the U.S. Government 
to use trade sanctions to bully the developing world to deny 
its people access to affordable essential medicines.
    Things like compulsory licensing are legal trade practices. 
Then ask the President to license all U.S. taxpayer-funded 
medicines to organizations like the World Health Organization. 
Jamie mentioned at least five drugs that we know that the U.S. 
Government either holds the patent on, developed or 
significantly funded the drugs, and therefore, retains 
ownership rights to. The U.S. Government can issue additional 
licenses by themselves and allow them to be sold at whatever 
price they set.
    Please also ask the world banking community to write off 
the developing countries debt and allow Africans to spend their 
money on health, not on interest payments to banks. My mentor 
and hero, Jonathan Mann, the architect of the World Health 
Organization's Global Program on AIDS, and his wife, Mary Lou, 
were tragically killed last September on a crash on the way to 
Geneva, but he left behind a global AIDS village and indeed, 
for all of us, the vision of the inextricable link between 
health and human rights.
    I would like to end my remarks with a statement that 
Jonathan made at last year's international AIDS conference in 
Geneva. Jonathan said, ``our responsibility is historic, for 
when the history of AIDS and the global response to it is 
written, our most precious contribution may well be that at a 
time of plague we did not flee, we did not hide, and we did not 
separate ourselves; in this spirit may we all not separate 
ourselves, but, instead, work together to provide every man, 
woman and child with one of their most fundamental rights, 
health.'' Thank you.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Mr. Sawyer follows:]

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    Mr. Mica. And we will now hear from Dr. John Siegfried who 
is with the Pharmaceutical Research and Manufacturers of 
America. Welcome, sir, and you're recognized.
    Dr. Siegfried. Thank you, Mr. Chairman. And members of the 
subcommittee for inviting PhRMA to testify today on the issue 
of whether the pharmaceutical industry is critical to the 
effort in combating the HIV/AIDS epidemic. By way of 
introduction, I am Dr. John Siegfried. I serve in a consultant 
capacity as senior medical officer for the Pharmaceutical 
Research and Manufacturers of America.
    As a PhRMA employee from 1992 to 1998, I lived in the 
District of Columbia and was a volunteer physician caring for 
AIDS patients on a regular basis at the Elizabeth Taylor 
Medical Center of the Whitman-Walker Clinic, a leading AIDS 
facility in the District.
    PhRMA is the trade association representing the American-
research-based pharmaceutical industry. Defined by their 
commitment to innovative research and development, PhRMA member 
companies led the way in the research for new medicines and 
vaccines that save lives, improve the quality of life, and 
often provide the most effective and cost-effective health care 
for patients.
    In the area of therapies for HIV/AIDS, the contribution 
made by the U.S. pharmaceutical industry is nothing short of 
remarkable. First reports of a mysterious illness later 
identified as HIV/AIDS appeared in the medical literature in 
1981, and the HIV virus was identified in 1983. The first HIV/
AIDS treatment was approved only in 1987.
    Since then 54 medicines have been approved for HIV/AIDS and 
associated conditions, and an additional 113 are in 
development, most of which are being developed by the research-
intensive pharmaceutical companies. Government and academic 
scientists generally lead the way in advancing basic knowledge 
about HIV/AIDS, although pharmaceutical companies have 
contributed. And the industry has led the way in translating 
those advances and knowledge into HIV/AIDS medicines to help 
patients.
    Drug discovery and development in the United States usually 
takes 12 to 15 years from the test tube to the pharmacy. The 
development of 15 medicines within only a decade and a half is 
thus an unprecedented accomplishment. The National Institutes 
of Health, particularly the National Institute of Allergy and 
Infectious Disease, and Dr. Killen who was with us this 
morning, led in advancing our basic knowledge. Pharmaceutical 
companies led the discovery and development of medicines to 
help HIV/AIDS patients. And the Food and Drug Administration 
expedited review and approval of these lifesaving medicines.
    Equally unprecedented are the results of this effort in the 
United States and in many other developed countries. The death 
rate from AIDS in the United States dropped by nearly one-half 
from 1997 to 1998, the largest single-year decline in any major 
cause of death ever. The health of many HIV patients improved. 
Many have returned and are returning to work and leading more 
productive lives.
    Often the demand for more expensive secondary and tertiary 
health care services has declined as a result of newer 
therapies providing the most effective and cost-effective 
health care for AIDS patients. The new products not only help 
many patients, but can also reduce the needs for other 
medicines to treat diseases associated with AIDS and the need 
for treatment in hospitals and hospices.
    The foundation on which this progress rests is investment 
in innovative research and development, and it is in the area 
of applied research and development that the pharmaceutical 
industry excels. It is the industry's role in this crisis to 
lead the way in the discovery and development of pharmaceutical 
and biotechnology products that can play a critical role in 
HIV/AIDS treatment and prevention.
    But not all patients and not all countries can afford them. 
Effective response to the HIV/AIDS challenge in developing 
nations must take into consideration all of the relevant 
factors, including medical infrastructure, available resources, 
disease awareness and prevention initiatives, and most 
importantly, national commitment and leadership to make HIV/
AIDS a public priority.
    The principal role of the research-based U.S. 
pharmaceutical industry in confronting HIV/AIDS worldwide is to 
continue what it does best, to marshal the expertise and 
capacity and applied biomedical research and drug development 
to discover new and more effective treatments. In cooperation 
and collaboration with scientists and the government and 
academia, some pharmaceutical companies are also seeking to 
discover and develop an effective HIV vaccine which ultimately 
would be the most effective way to prevent HIV/AIDS.
    Investors and pharmaceutical companies seek a return on 
their investment commensurate with the large risk they assume. 
The current cost of bringing a pharmaceutical product to market 
averages $500 million, and only 1 in 5- to 10,000 compounds 
tested ever reaches the marketplace. Additionally, of marketed 
products, on average only one in three generates revenue that 
meets or exceeds the average R&D cost.
    The U.S. pharmaceutical industry is spending $24 billion on 
research and development this year, including approximately $2 
billion on research and development of HIV/AIDS-related drugs. 
Over 20 percent of all domestic sales revenues go back into 
research and development, the highest proportion of any 
industry with which we are familiar.
    Intellectual property protection and market pricing are 
keystones of and essential to this research effort. The 
research-based U.S. pharmaceutical industry has contacts with 
governments and health agencies around the world, and 
therefore, is well positioned to provide input in the area of 
intelligent health education and policy. This expertise 
complements and supplements the responsibilities and expertise 
of other members of the world health care community, both 
public and private.
    Let me give just several brief examples. Bristol-Myers 
Squibb is spending $100 million over 5 years in five southern 
African countries to fund extensive AIDS research trials, 
improve training for more than 200 physicians, and help 
nongovernmental organizations bolster community AIDS prevention 
and treatment programs. The company has also developed a 
pediatric AIDS program in Mexico, and is donating drugs to 
cover all untreated cases of pediatric AIDS in the country, and 
providing physician training and community outreach.
    The Merck Co. Foundation is underwriting the Enhancing Care 
Initiative, an initiative coordinated by the Harvard AIDS 
Institute. The Enhancing Care Initiative will address the issue 
of HIV-AIDS in the developing world by bringing together the 
most important expertise within specific developing countries 
including representatives of the HIV community. Glaxco-Welcome 
is providing deeply discounted prices for AZT, in cooperation 
with UNAIDS, and in addition, the company is sponsoring a 
program called Positive Action, whose activities are devoted to 
initiatives and organizations in developing countries.
    These activities in the private sector complement the 
initiatives of others, including the HIV community, 
governments, and international organizations.
    In conclusion, Mr. Chairman, broadening access to modern 
health care in developing countries, including pharmaceuticals, 
is a complex challenge. While the HIV/AIDS pandemic creates 
special challenges, the needs of patients worldwide with 
tuberculosis, cancer, parasitic and fungal infections does not 
lag far behind.
    Many countries lack the broad public health infrastructure 
necessary to support the use of complex regimens of anti-HIV 
treatments. Many AIDS experts, such as Dr. Thomas Coats, 
executive director of the University of California at San 
Francisco's AIDS Research Institute, have been quoted as saying 
that delivery of complex, demanding AIDS drugs without the 
necessary infrastructure and supervision is ``a recipe for 
disaster.''
    Dr. Herman's comments earlier this afternoon echo this 
sentiment. It is neither feasible nor desirable to simply 
import treatment regimens from other countries into South 
Africa. This is true for the disease HIV/AIDS and for many 
other health conditions. These are complex issues that can only 
be addressed through collaborations involving industry, 
government, international organizations, patient and medical 
groups. All are vital to finding workable solutions that will 
help patients with HIV/AIDS lead better lives and prevent 
others from contracting the disease.
    Thank you, sir.
    Mr. Mica. Thank you for your testimony.
    [The prepared statement of Dr. Siegfried follows:]

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    Mr. Mica. I thank all of the witnesses for their testimony.
    I have a couple of questions. I will start out with Dr. 
Herman.
    Dr. Herman, you cited one of the Ministers of Health, Dr. 
Ramakgopa.
    Dr. Herman. That is close enough.
    Mr. Mica. I am not very good at the pronunciation. But your 
testimony said that the doctor indicated that her fundamental 
concern was not the cost of drugs, but the lack of a coherent 
and well-managed program. Is that really the problem there?
    Dr. Herman. South Africa is just 5 years post-apartheid. 
Most of the health care system is still in a state that can 
best be described as confused.
    Mr. Mica. Is it a public or socialized health care delivery 
system?
    Dr. Herman. This is only the publicly funded health care 
system.
    Mr. Mica. Do they have a private system, also?
    Dr. Herman. There is a larger private health care system in 
South Africa.
    Mr. Mica. Has this been converted, and you are saying that 
is part of the problem, not the cost of drugs?
    Dr. Herman. We have a very complicated health care system 
where both sides are in crisis. In the private side we have a 
health inflation rate that is twice that of the national 
inflation rate, so the private sector has problems in costing 
for drugs, et cetera.
    Mr. Mica. What percentage of the population has access to--
--
    Dr. Herman. Private insurance?
    Mr. Mica. We will just say to AIDS treatment.
    Dr. Herman. Twenty percent of the population actually have 
some kind of insurance. The insurance companies now, which 
number 170 such companies in a country of 14 million people 
with 40 different fund managers that keep on changing things, 
those people are starting to get access to drugs, but the 
remaining people do not.
    Mr. Mica. So there is a large percentage of the population 
in South Africa that does not have access to drugs for 
treatment; is that correct?
    Dr. Herman. They do not have access to antiretrovirals, but 
they do have access to drugs for opportunistic infections.
    Mr. Mica. And you are saying that cost is not a factor 
there?
    Dr. Herman. Not at the moment. The problem is the system is 
not working very well for many different diseases.
    Mr. Mica. Mr. Love, you were critical of our trade 
policies, and seemed to single out South Africa for specific 
treatment, unfair treatment.
    Can you elaborate on what you were saying? You said that 
other countries, and I think you named some of them, that, in 
fact, we turn our backs or have a different policy than we do 
for South Africa on this particular issue.
    Mr. Love. The U.S. Government has had, for the last decade 
or so, a policy of advancing positions that are favorable. The 
drug companies are like an exporter. They look at it like a 
domestic business. They want to help them out, so they want to 
back them up.
    So, on the particular issue of parallel imports, which is 
an important part of the dispute with South Africa, it is a 
fact that many European countries do parallel imports as a 
matter of course. In fact, the European Commission actually 
encourages parallel imports within the European community. They 
think it makes the markets more efficient.
    I was pointing out this hypocrisy between the fact that we 
do not complain about the fact that it is an established 
practice in Europe, the colonial powers of South Africa, yet we 
have spent a couple of years of government officials' time 
trying to pick apart the efforts of the South African 
Government to do something that is modeled after European 
practices.
    That said, if the United States had its way, they probably 
would try and persuade the European countries not to do it. It 
is just that they do not think they would succeed in Europe, so 
the United States is most active where it thinks it has the 
most leverage, which has to be with small, non-European, and 
poor countries.
    I have an example in my testimony about pressures on 
Israel, Thailand, and New Zealand, to give you an example of 
different countries we apply pressure to. South Africa is not 
the only country where there is pressure.
    The South Africa dispute has become quite important because 
the South Africans have been uniquely defiant of the Americans. 
They have not really backed down. That is why they have become 
such a big test case. The sense is that if the South Africans 
succeed in doing what they want, then other countries will 
follow suit. So it has become of interest to people throughout 
the world.
    Mr. Mica. Thank you.
    Mr. Sawyer, your participation in Act Up is rather 
historic. Has Act Up testified before Congress before? I know 
you have participated in hearings.
    Mr. Sawyer. I don't think we have ever been invited.
    Mr. Mica. We are pleased that you accepted our invitation.
    Mr. Sawyer. I am pleased to be here.
    Mr. Mica. I must say that you have made a big difference, 
because people did not want to broach this subject. I was 
shocked today at the difficulty in trying to get the hearing 
together, and that is some 12 years later than you started. But 
we do appreciate what you have contributed. Sometimes in our 
societal system, the only way you can bring attention is by 
acting up; watch me sometime.
    I find you have to get people's attention, and you have 
done that very well and probably have saved a lot of lives, so 
we appreciate what you have done, and also your willingness to 
come forth and provide constructive testimony.
    One of the dilemmas that we have is we do not want to--and 
you are sitting next to the pharmaceutical manufacturer's 
representative--is we do not want to stop those folks from 
doing what they do so well. Every time government gets involved 
in something, they have a tendency to mess it up. One of the 
great things about our system is the private sector has worked 
so well, and often with a profit incentive, and we don't want 
to discourage that. There is nothing like a profit that seems 
to motivate folks. But there is also the public good, so we 
have to balance that.
    I am not sure if it was you or Dr. Lurie that mentioned 
that there are instances of buying these licenses or providing 
additional licenses, and I think that might have been one of 
your constructive suggestions. Could you elaborate? I am not 
that familiar. There are drugs----
    Mr. Sawyer. Sure.
    Mr. Mica. Then you said--the other part was turning over 
some of these licenses to international organizations. Can you 
elaborate as to how that would work and how we would cover the 
cost, and is there some schedule or some precedent for 
proceeding?
    Mr. Sawyer. Yes, and, Jamie, please feel free to chime in. 
He sometimes knows the technical trade legalities a little 
better than I.
    But let us take one drug, for example, ddI; developed by 
the National Institutes of Health. The patent is in the name of 
Sam Broder and a few other scientists who still work in 
Bethesda for the National Institutes of Health. So HHS has that 
patent. HHS auctioned that drug off. Bristol-Myers Squibb has a 
licensing agreement with HHS to, for 10 years, exclusively 
market that drug in some countries.
    My understanding is that the license is primarily for the 
United States, Europe, Japan, Australia, the places where they 
can charge the highest prices for those drugs.
    Because the U.S. Government holds the patent, did not give 
them exclusive worldwide right to that drug, and retained the 
patent, the U.S. Government can issue additional licenses, 
especially in countries where Bristol-Myers Squibb was not 
given exclusive rights.
    The World Health Organization, for example, as well as 
South Africa and Thailand, have expressed interest in being 
able to produce generic versions of those drugs. If the U.S. 
Government gave a license and did transfer of technology, they 
basically could be producing not just generic equivalents, but 
the exact same drug that Bristol-Myers Squibb produces. The 
price of that could be negotiated at whatever level was deemed 
appropriate by the manufacturers and by the U.S. Government.
    Bristol-Myers Squibb, for the first 10 years of its 
license, I believe, pays the U.S. Government 5 percent royalty, 
5 percent of sales. My understanding is that the next 10 years 
they have a right to renew that agreement, and that there also 
was a fair pricing clause inserted in that contract that stated 
that Bristol-Myers Squibb needed to price that drug in a way 
that it was affordable to people who needed access to the drug.
    We have asked Donna Shalala's staff, we have asked Sandy 
Thurman, we have asked people in the Vice President's office, 
including Tom Roshert, who was here earlier today, to please 
have the government, and we believe this would be an executive 
branch function, do a review of that drug to see if indeed 
Bristol-Myers Squibb is being compliant to that fair pricing 
clause. I do not believe it is, given that the majority of 
people cannot gain access to it. I would think that would be 
reason alone for the U.S. Government to issue additional 
licenses.
    Now, that 10-year exclusivity period is up for review, I 
believe, at the end of this year. We have also encouraged the 
U.S. Government not to renew that.
    Mr. Love. Actually I have a copy of the license here. We 
can clarify it.
    Mr. Mica. That could be an interesting question that we 
could probably submit to Ms. Thurman. Thank you for your 
response, maybe we will include that.
    I don't want to take up all the time. We have other Members 
waiting.
    The other big point that you made is important, that this 
is not just an international issue, but also domestic. You are 
a survivor because you have somehow managed to pony up the 
$30,000 a year. I could probably name two dozen people, many 
who work for Congress and others, who I have known personally 
very well who have since died who either did not have the 
$30,000 or did not have the drug available. So we have an 
international and we have a domestic problem. So we need to 
address that, too.
    There are a whole range of questions there that we are 
unable to get into in this hearing, but we appreciate again 
your testimony.
    I yield now, if I may, to our ranking member, Mrs. Mink.
    Mrs. Mink. Thank you.
    Mr. Sawyer, the comments you made about this drug that the 
United States holds the license for, you said it was ddI?
    Mr. Sawyer. Correct.
    Mrs. Mink. What specifically is that used for?
    Mr. Sawyer. It is an antiretroviral drug that prohibits 
reproduction of the HIV virus, so it slows the progression of 
HIV to full-blown AIDS, in short it helps control the HIV 
virus.
    Mrs. Mink. Is that used solo, or is that used in 
combination with other drugs?
    Mr. Sawyer. It was first used as monotherapy, but that was 
not deemed to be effective, due to its short-term effects. It 
is one of the components of a triple therapy.
    Mrs. Mink. What about the other two components?
    Mr. Sawyer. There are actually a whole number of additional 
drugs that can be used in a triple therapy. I mentioned that I 
take five.
    For someone like myself, who has had access to each of 
these drugs in monotherapy as they have come to market, I have 
developed a partial resistance to them, so for me, it takes 
five of these drugs to control my virus. But here is another 
one, 3TC, that the U.S. Government does not have a patent on. 
There are about four patents held by some universities, a 
generic drug company in Canada, some other companies, but this 
drug was one that was significantly funded by government 
grants, and again, the patents and the licensing agreement have 
footnotes that state the U.S. Government retains some ownership 
rights.
    You could use this drug in combination also with this drug, 
Norvir, a protease inhibitor. It is one of the most expensive 
classes of drugs. Again, these three triple cocktails help 
control the HIV virus and stop or slow the progression to full-
blown AIDS.
    Norvir also was significantly funded. The initial research 
on this, funded by the U.S. Government, was what helped 
discover this whole class of drugs. Again, the footnotes in the 
licensing agreement and patents say because of taxpayer 
investments in the research of this drug, the U.S. Government 
retains certain ownership rights.
    So if you added these two drugs together with ddI, you 
would have drugs that the government maintains ownership rights 
to that could effectively be used at prices the government 
deems appropriate, in my understanding, so that they could be 
used on a more cost-effective basis.
    Mrs. Mink. This information that you have provided this 
subcommittee certainly underscores, at least in my way of 
thinking, a tremendous legal and moral responsibility on the 
part of the United States to devise a policy that would utilize 
these proprietary rights which it owns for the benefit of our 
own citizens here in the United States, as well as 
internationally.
    Mr. Sawyer. And global public health.
    Mrs. Mink. We, Mr. Chairman, I think have hit on an issue 
here that would require us to expand this investigation, call 
upon the government to explain the lack of extensive use of 
these drugs that it has in its ownership.
    I'm very compelled by an argument made by Mr. Love with 
reference to the opportunistic illnesses that come together 
with AIDS. As Mr. Sawyer testified in many cases they are the 
reasons for death. So if we want to support these individuals, 
one of the ways to do it is to provide the drugs necessary for 
tuberculosis, diarrhea, and all these other things that you 
have explained.
    My problem in coping with that rather simple, direct issue 
is why aren't we doing it? What are the barriers that confront 
us and prevent us from using the World Health Organization or 
UNAID or all of our resources, or the full $200 million to make 
it possible for the accessibility of these very simple drugs, 
which I assume are no longer in the proprietary control of the 
pharmaceutical companies?
    Mr. Sawyer. That is, many of the reasons, many are 
controlled by the generic drug companies or they are on the 
generic market, so there is not a huge profit margin in them. 
Therefore, the big multinational drug companies are not 
interested in developing new versions. They have the most 
extensive distribution networks. The generic drug companies 
don't have as huge profits and don't have as far-reaching 
distribution networks, so they have not been able to put them 
out. Things like structural adjustments prevent many developing 
countries from allocating sufficient amounts of their own 
national resources to health care. They are forced to repay 
loans to the World Bank.
    Mrs. Mink. Why couldn't the USAID policy in this area 
include substantial monetary support so that these particular 
kinds of drugs can be made more readily available?
    Mr. Sawyer. We have actually asked USAID to do that very 
thing for several years. Their mandate so far that has come 
down from the State Department, in my understanding, and Paul 
Delay, who is the head of the USAID Global Program, was here. 
Is he still here? I guess he is not. We have had these various 
discussions with him. He has stated that the State Department 
mandate limits the role of USAID to prevention only. The 
thinking was that condoms and preventing someone from getting 
infected was more cost-effective than treating people.
    Again, unfortunately, organizations like the World Health 
Organization, or I'm sorry, the UNAIDS, the primary 
coordinating body to join in the UNAIDS budget is less than $60 
million a year.
    Dr. Lurie. I think in addition to the issue of infection 
treatment is the issue of mother-to-child transmission 
prevention. That is another area where, for a relatively small 
amount of money, you can make an enormous difference, not only 
extending people's lives, but actually saving them.
    In that regard, it can be a rather small amount of money 
that is the difference between access and nonaccess. Despite 
Dr. Herman's assertion that money is not the issue in South 
Africa, I have an article that I published in the South African 
Medical Journal last week, last month, in which we addressed 
the failure of the South African Government to be willing to 
invest even approximately $50 per patient in HIV prevention, 
mother-to-infant.
    When asked, Dr. Zuma, then the head health person in South 
Africa, said, ``The drug treatment is not cost-effective 
because we don't have the money.'' So I simply do not find 
believable, even in South Africa, that money is not a problem; 
there you have the Health Minister making that precise point.
    I also would just, in a rather slightly different note, 
before I miss the opportunity of having the mic, is Dr. 
Siegfried quoted Dr. Coats on the question of antiviral 
resistance. I happen to know Dr. Coats. I have written a number 
of papers with him. Dr. Coats is a psychologist? He is a 
doctor, but he is not a psychologist. If that is the best the 
pharmaceutical companies can come up with, that is a rather sad 
state of affairs.
    Mr. Mica. Mr. Lantos.
    Mr. Lantos. Thank you, Mr. Chairman, very much. Let me 
again commend you for holding this very important hearing. And 
let me commend all of the witnesses for their very interesting 
and useful input.
    I have a somewhat different approach than what emerged from 
your dialog with Mr. Sawyer a few minutes ago. I was very much 
impressed by your testimony, Mr. Sawyer.
    We must not trivialize this issue. Tactics of advocates who 
clearly are speaking on behalf of a minority must not create a 
backlash on the part of the majority that needs to be 
persuaded. I think it is always important to realize that we 
all have roles to play. An advocate has a very clearcut role to 
play. A one-issue advocate has an even clearer role to play.
    But I think you need to know that a whole range of 
illnesses, from Alzheimer's to diabetes, are coming to us on a 
regular basis saying, this particular tragic illness is getting 
a disproportionate share of attention, interest, money, and 
involvement.
    Since I represent, along with my friend, Nancy Pelosi, San 
Francisco, I am extremely sympathetic and understanding and 
supportive of all these efforts. But I think it is extremely 
critical to understand that if we wish to go beyond just 
feeling good about powerful statements we make, coalitions have 
to be built. And statements that $100 million additional 
funding announced by the administration just a short while ago 
is really a step in the right direction, but palpably 
insufficient is not very helpful.
    We have a range of issues that we in the Congress deal 
with, ranging from tobacco to cancer to drug abuse to gun 
violence to alcoholism to hate crimes, every one of which, and 
100 others, could gain 10 times the financial support that it 
is gaining and would still not be sufficient.
    So with all due respect, I would suggest that temper 
tantrums and histrionics are not a good avenue to advance the 
cause, which is much too serious. The numbers of lives involved 
are unbelievably weighty, and good will needs to be generated 
across the board on the part of people who are supportive. 
Attacking people who are supportive is not a helpful formula.
    I would merely make the general observation, having learned 
a great deal during the course of this hearing, that I think as 
the issue gains more visibility and support, as I hope that it 
will, a greater sense of responsibility must be present on the 
part of its advocates, because the advocates will succeed in 
proportion to their sense of responsibility and sensitivity to 
other problems.
    This is not the only medical problem the Congress is called 
upon to deal with. While statements such as yours, Mr. Sawyer, 
and I truly admired your testimony, which was very moving and I 
think very impressive, that their health problems in South 
Africa are our health problems, I don't think you would get 
many votes for that statement in the House of Representatives. 
We are a much more parochial body than one which would embrace 
such a statement.
    Therefore, as one who is so strongly supportive of what you 
are attempting to achieve, my word of caution is merely a very 
friendly one. Broad coalitions need to be built to begin to 
move in the direction that all of us would like to move in. The 
people who are supportive, perhaps not to the extent that any 
one of us would like to see them being supportive, nevertheless 
need to be appreciated and recognized for their support. It is 
very easy to alienate people, while it is very difficult to 
build coalitions. I think this issue deserves the painful task 
of building coalitions. I, for one, will be very much a part of 
that coalition as we move ahead.
    Thank you, Mr. Chairman.
    Mr. Mica. Thank you.
    Let me, if I may, recognize Mr. Cummings, who is a member 
of our subcommittee, next.
    Mr. Cummings. I have no questions, Mr. Chairman.
    Mr. Mica. And in seniority, Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    Let me echo the words of my colleagues who have 
complimented you on bringing this issue forward. It has not 
received the public attention of this body that it requires, 
and I have been listening not only because of my concern and 
the concern of the Congressional Black Caucus, or the plague in 
Africa that is wiping away the continent, but because so much 
of the testimony we hear today applies to situations in the 
United States.
    After this hearing, I'm not going to forget it. Fifty 
percent of the new AIDS cases in this country are black people 
right here, where all the drugs are supposed to be available. 
Why do you think this is happening? We are 13 percent of the 
population.
    I want to make sure that there is an understanding that we 
are truly knitted together, and that we begin to deal with what 
is a real epidemic in this country as well. We have to be able 
to walk and chew gum at the same time.
    I want to begin by some questions to Dr. Siegfried.
    First, make me understand, Dr. Siegfried, why there would 
not be uniform treatment across the globe of compulsory 
licensing and parallel importing. How is it possible to justify 
differential treatment among countries with respect to these 
two legal approaches?
    Dr. Siegfried. Congresswoman Norton, I appreciate the 
question. Unfortunately, my involvement with AIDS and AIDS 
policy has been very limited to treatment issues; I am not an 
expert at all or a lawyer or involved with parallel imports or 
in a position to describe that.
    Ms. Norton. I was asking you that question as a physician. 
Would you see any reason why there should be any difference 
among the countries of the world in these approaches to 
providing drugs?
    Dr. Siegfried. As a physician, what I would love to see is 
uniform access to all the AIDS treatments throughout the world, 
just as I would like to see all hungry children fed and all ill 
people----
    Ms. Norton. So your answer is you do believe there should 
be uniform compulsory licensing and parallel importing policies 
throughout the world, as a physician? I understand you are not 
a lawyer, I understand you are not a trade expert.
    Dr. Siegfried. I am not sure that is what I said, because I 
don't know the policy terminology. I think as a physician, we 
ought to have access to the best treatment, not only for 
everyone in this country, but throughout the world, absolutely.
    Ms. Norton. Dr. Siegfried, let me ask you something that I 
am sure is right directly in your sphere of knowledge, because 
it is in your testimony.
    You testified that Bristol-Myers Squibb is spending $100 
million over 5 years in five southern African countries to fund 
extensive AIDS research trials. Now, I don't know if you heard 
Ms. Nkhoma's testimony, but her testimony included a very 
poignant point and one that is very disturbing to me. Let me 
see if I can get some sense of it from you.
    She says that when these trials are done, and I certainly 
believe it is important to do trials in developing countries, 
AZT, for example, has been given to some and placebos, as 
trials must, given to others. And then she says the companies 
pick up and leave so that the people who had the placebo have 
no access to any treatment.
    As a physician, would you comment on that practice of the 
drug companies?
    Dr. Siegfried. As a physician and also as somebody who has 
been involved with the research and development end of drugs, I 
think the thing that is important to appreciate is that every 
trial that is done in developing countries, as well as in this 
country, has individual kinds of protocols, or contracts. In 
some of those, I am sure what she referred to this morning is, 
in fact, the case. It is not a uniform practice, and there are 
trials in which treatment continues.
    Ms. Norton. What is your view of that?
    Dr. Siegfried. It becomes, for the pharmaceutical 
companies, almost a deterrent to do drug trials in developing 
countries if part of the contract is that they must then 
continue treatment, and along with treatment, the laboratory 
studies, all of the other ancillary services for long periods 
of time.
    Here in this country the way it gets handled, of course, is 
after the trial is over, there often is a compassionate use 
program to assist people until the drug comes on the market. If 
you don't have the infrastructure in countries, it is not 
possible to do that.
    Ms. Norton. If you did have the infrastructure, if you are 
using a fairly simple drug, do you think that should be done?
    Dr. Siegfried. Absolutely.
    Dr. Lurie. Let me try and help out a little here, because 
the whole matter of use of placebos and the subsequent 
availability of drugs after clinical trials is one that our 
group brought to public attention 2 years ago in the context of 
the mother-to-infant transmission studies, which I think in 
part was what was referred to.
    Actually it is not to provide--we objected to the use of 
placebos in those studies because there were known effective 
treatments at that time which the American government-funded 
researchers elected not to provide.
    Ms. Norton. Let's deal with those where there are effective 
treatments.
    Dr. Lurie. My point is that in those initial trials, there 
were placebos, despite the availability of effective treatment. 
In defense of the pharmaceutical industries, the sort of 
followup studies that were done in developing countries were 
not funded by the pharmaceutical industry. Actually, the 
situation is much worse; they were funded by the CDC and the 
NIH, and a number of other funding agencies around the world.
    Ms. Norton. I don't care who funds them. I am asking an 
underlying medical ethics question.
    Dr. Lurie. I understand.
    Ms. Norton. His testimony talked about Bristol-Myers 
Squibb's spending $100 million specifically for such trials. I 
understand this may be happening in all kinds of ways. The 
government does it even worse. I am trying to find out if you 
go to a developing country, if it is an ethical practice to 
have two groups and to leave one group with nothing afterwards, 
even though they have understood that they are in the placebo 
group. That is my simple question.
    Dr. Lurie. I am trying to not complicate it, but in the 
case of mother-to-infant transmission, it does not really 
matter what happens after the trial, in the sense that if you 
are in the placebo group, you are already more likely to have 
developed an HIV-infected infant.
    Ms. Norton. Are you suggesting there should not be such 
trials at all?
    Dr. Lurie. With regard to effective treatment that exists, 
but with regard to this, ethics are clear, but frequently 
violated. The Council of Organizations in the Medical Sciences, 
which has written one of the two major ethics documents for the 
world, states that after a trial is completed, any medication 
proved effective during the trial should be made ``reasonably 
available'' to the population from which the study subjects 
were drawn.
    It is, however, an unfortunately common practice for 
pharmaceutical companies and government-funded researchers to 
do the research and then to do exactly what Dr. Siegfried has 
sought to justify; to not provide therapy after the trial. We 
find that completely unacceptable.
    Unfortunately, the pharmaceutical industry, to a limited 
extent, but especially researchers from this country, including 
those from the NIH and the CDC, have sought to address the 
problem of the fact that they have been violating these ethical 
agreements with regard to reasonable availability after the 
trial, as well as with respect to the requirement to provide 
best-known therapy to people in developing countries during a 
trial. They have addressed that problem by trying to rewrite 
all the ethics rules.
    What we have now going on in the world is a coordinated 
effort involving principally people from the United States, 
especially U.S. Government researchers, who are trying to 
rewrite the Declaration of Helsinki, and are trying to rewrite 
the SIAMS document I just referred to, such that these kinds of 
practices would be less likely to be criticizable.
    Ms. Norton. Let me just say that I think that those 
involved in trials are a relatively small group.
    Dr. Lurie. Absolutely.
    Ms. Norton. When people volunteer to possibly be somebody 
who would not, in fact--who is not, in fact, receiving 
treatment, the least we can do for this small group is to 
provide continuing treatment.
    Dr. Lurie. One would hope that. But in the aftermath of 
what I call the second generation of studies, the one that 
included the placebo group in developing countries, what we now 
have is a new generation, a third generation of studies, 
including one in Malawi, in which the new, cheaper effective 
regimens are still being denied people, even today.
    I agree with you, though, that the situation in the 
clinical trial is very easy to complain about because it is 
conducted by the U.S. Government, for example. But the far 
greater problem is the lack of commitment of pharmaceutical 
companies and others who conduct research, human experiments, 
on the citizens of developing countries and then seek to evade 
their ethical obligation to provide treatment after the trial.
    Ms. Norton. Dr. Siegfried wanted to respond.
    Dr. Siegfried. I think it becomes very difficult to put all 
trials in developing countries in one basket, or all companies 
conducting trials, or all government agencies conducting 
trials. My guess is if these were looked at very carefully, you 
would find specific differences.
    Ms. Norton. That is why I was looking for a universal 
principle.
    Dr. Siegfried. I am really reluctant to comment on Bristol-
Myers Squibb in terms of specific trials in Malawi or wherever, 
because my understanding as part of this program in which they 
are doing a number of trials is that they will be providing 
continuing drugs. But that is an understanding, and I cannot 
state that for sure.
    Ms. Norton. That is why I looked for the principle.
    One last question; you testified that the company has 
developed, and this is really of interest to me, because even 
the very important testimony of Mr. Sawyer, if I may say so, 
Mr. Sawyer, it was just poignant for me to see you pour those 
drugs out, because I represent many people right here in the 
Nation's Capital who cannot get anywhere close to affording 
those drugs, and these drugs are going to middle-class white 
people, let us be clear.
    And that is why, when somebody tells me about drugs like 
that in Africa, I am very much more interested, and I know my 
time is going to be up, in hearing more about what Dr. Herman 
has to say about a practical approach to dealing with an 
epidemic.
    This is so American, really, and we do it all over the 
world. We get sick, and even poor people, not people in 
between; by the way, even poor people can go to the emergency 
room and go to the doctor. So we have our approach to a Dr. 
Herman, because we are used to finding medicines. So you have 
to understand that the way we think about these problems is, 
there is a cure, get yourself a drug, it will take care of it.
    I want to say to you, Dr. Herman, that what you say 
resonates with me, because AIDS cases in this country are so 
largely black today that I feel like we have a runaway problem 
among black Americans. And I am here, and that is why you see 
me far more interested in getting my government to figure out 
what to do at the front end of this disease. Because as long as 
I have to look at a young man telling me that these drugs are 
available, and some of them are even simpler than others, I 
know he is not talking about large numbers of people that I 
happen to represent. I am much more interested when I see the 
magnitude of the problem throughout Africa.
    South Africa may be even better as the only industrialized 
country in Africa. When I see the magnitude of the problem 
there, I am interested in trying to keep countries from doing 
what Uganda has to do, which is to go to triage and say, we 
have to let some people die, because the only way we can do now 
is to deal at the back end with drugs. That is hopeless for us.
    I am looking for what is practical. You used the word 
``practical.'' I'm looking for a practical way to get hold of 
this problem in a developing country. I must tell you, Doctor, 
I'm looking for a practical way to get hold of this problem in 
Anacostia, across the Anacostia River, because the American way 
is not even helping African Americans in this country. So I 
cannot imagine that the American way is going to help in your 
country, though of course I must say that I regard it as 
immoral not to allow these drugs to be transmitted to South 
Africa and other countries in perfectly legal ways which may 
underprice them relative to how they are usually priced.
    This is what I want to ask Dr. Siegfried. He testifies and 
raised my hopes that the company, and this must be Bristol-
Myers, has developed a pediatric AIDS program in Mexico, 
donating drugs to cover all untreated cases of pediatric AIDS 
in the country, and providing physician training and community 
outreach.
    Now, where I want to start--and here I am talking about 
pragmatism, if I were trying to get hold of AIDS in the 
developing world, would not be--you all come. I would try to 
find an entryway to break the back of the epidemic. Bristol-
Myers must understand that in Mexico, because it apparently has 
said every case of pediatric AIDS in Mexico.
    I am asking you whether or not there is any company that 
you would be willing to recommend, if there is one that for any 
country in Africa, wouild try to get hold of this epidemic? Do 
you believe that is a challenge that the pharmaceutical 
companies should take on, given the fact that they have set a 
precedent right in Mexico, and considering the severity of the 
epidemic in Africa, that this would be an important thing to 
repeat in some country, of their choosing, on the continent?
    Dr. Siegfried. Congresswoman Norton, I can't speak for any 
of the companies, obviously. I think it is a wonderful 
challenge. I do know that the pharmaceutical companies are 
anxious to be seen as and try very hard to be good citizens and 
to respond positively, you know, to crises in times of need.
    I take it as a challenge I can take back to the 
organization and that can be really disseminated throughout the 
industry, but I would be very hopeful, frankly, that if 
Bristol-Myers Squibb can do this for pediatric AIDS in Mexico, 
that other companies might be able to step forward for specific 
countries or populations. I think it is a wonderful challenge.
    Ms. Norton. Dr. Siegfried, I appreciate it. I would 
appreciate your responding to Chairman Mica, who I am sure 
would let me know what response you have gotten from the 
industry.
    I realize this is a small step, but I can't--these are 
children. If we start with babies, and with children, where 
there has been greater success than adults, it does seem to me 
that we could work our way up and finally get hold of this 
epidemic in at least one country.
    Thank you very much, Mr. Chairman.
    Mr. Mica. If the gentlewoman from the District will compose 
the letter on behalf of the committee, we will sign it and send 
it to all of them.
    Ms. Norton. Thank you very much, Mr. Chairman. I will.
    Mr. Mica. I would like to recognize now the very patient 
gentleman from Vermont, Mr. Sanders. You are recognized.
    Mr. Sanders. Thank you very much, Mr. Chairman. And thank 
you very much for holding this hearing. I consider this issue 
to be extremely important.
    As you may know, Mr. Chairman, yesterday I brought up an 
amendment with Ms. Schakowsky's help, among others, just to 
deal with this issue. I was extremely disappointed that we only 
got 117 votes on it.
    Mr. Chairman, as you know, and as we have heard from 
testimony already, the pharmaceutical industry is arguably the 
most profitable industry in America. Last year the top 10 
companies averaged $2.5 billion in profit each, and earned 26 
percent more last year than they did the year before. Also, I 
think what we should know, and it is important to be frank 
about this and throw this out on the table, is that the 
pharmaceutical industry spends more money in lobbying and in 
campaign contributions than does any other industry. I think 97 
out of 100 Members of the U.S. Senate have kindly received 
money from your PACs, and many Members of the House, have also. 
I think it would be very naive not to assume that that largesse 
on the part of the very profitable and wealthy industry has had 
some impact on the public policy by the U.S. Congress regarding 
pharmaceuticals.
    Mr. Chairman, I wondered if I might, before we get to 
Africa, tell you about a trip that I took 2 weeks ago. I didn't 
go to Africa, but to another foreign country called Canada. I 
was not dealing with AIDS, but with breast cancer. I took five 
women from northern Vermont who were battling breast cancer to 
Montreal, Canada. The reason I went was to help them purchase 
pharmaceutical drugs that they are using. One of the drugs that 
all five of these women were using is a drug called Tamoxifen, 
which, Dr. Siegfried, you are certainly aware of, used pretty 
commonly for those women who have breast cancer.
    Dr. Siegfried, do you happen to know the price differential 
these women experienced in the drug Tamoxifen in Canada versus 
the United States?
    Dr. Siegfried. No, I don't, sir.
    Mr. Sanders. No idea? The women purchased Tamoxifen for 
one-tenth, not 10 percent, one-tenth of the price that they 
paid 50 miles south in the good old United States of America, 
in the most extreme case. These are women battling breast 
cancer, and every other drug that they had to purchase was also 
purchased at significantly lower prices in Canada than in the 
United States.
    I have to say that there is clearly something very wrong, 
and I think probably all of the panelists have raised this 
issue, about the pricing mechanisms that exist in the 
pharmaceutical industry, because I would give you day and 
night, Dr. Siegfried, to explain to the people of the country 
why a drug used to battle breast cancer costs one-tenth of the 
price in Canada than it does in the United States.
    Now we are dealing with the issue of South Africa. It seems 
to me that what we are dealing with is an extraordinary moral 
issue, that is, is it acceptable for the U.S. Government to 
unilaterally put pressure on the South African Government and 
other governments because they are trying to develop and 
purchase prescription drugs to treat a killer disease?
    Is it acceptable for the U.S. Government to work hand in 
glove with the pharmaceutical industry, which, as you know, is 
currently suing in the courts in South Africa on this issue, 
trying to get the South African Government to rescind that law 
which gives them the right to parallel import and to develop 
generic drugs?
    To me, it is beyond comprehension how--the pharmaceutical 
industry has the right to do what they will do, and that the 
U.S. Government would work hand in glove, and I have seen the 
reports, with the pharmaceutical industries to try to force 
South Africa and other countries not to generate the cheaper 
drugs that they need in order to treat people.
    I would simply say, picking up on a point, I think, that 
Mr. Sawyer made, Mr. Chairman, and I hope that you will pursue 
this issue, because I think you have an enormous moral dilemma, 
what do you do when you have a product that can save somebody's 
life from an industry which enjoys record-breaking profits, and 
then, all over the world, people who are poor are dying because 
they cannot have access to that product?
    Now, all of us know, in fact, that the pharmaceutical 
industry has done a good job, and we are proud of the work that 
they have done not only on AIDS, but on many other diseases. 
But what we also know, whether it is Washington, Burlington, 
Vermont, or South Africa, is that all of the research and 
development that you have done does not mean a damned thing if 
somebody cannot afford that product.
    If all of the research and development means that you come 
up with a treatment that costs $15,000 a year, forget about the 
people of South Africa, forget about the people in DC, forget 
about the working families of the State of Vermont, and say 
that it is going for the wealthiest people in this country. 
That is what your treatment is for.
    Picking up on a point I think Mr. Sawyer made, and as 
somebody who has also introduced legislation on this, we know 
that the taxpayers of the country have contributed billions of 
dollars to the NIH for research they have done, and to research 
that other universities and colleges all over America have 
done. They have developed products and given them over to the 
pharmaceutical industry without any reasonable price clause 
attached to it.
    We have seen case after case where the pharmaceutical 
industry has said, thank you very much for this government-
sponsored research. Now we are going to charge the consumers of 
the country $10,000 or $15,000 for that treatment, and then you 
have profits of $2.5 billion each for the top 10 companies.
    So what we are dealing with is an extraordinarily difficult 
issue from an economic, medical, and moral point of view. I 
think it is not good enough, and I will say, Mr. Chairman, and 
I know Mr. Gore has been criticized, that yesterday I think we 
got 19 votes from the Republicans on this issue. We got a lot 
more votes--we didn't get enough votes from the Democrats, but 
we got almost half the Democrats, and a very few Republicans 
stood up on this issue, being prepared to take on the 
pharmaceutical industry.
    But I think we have to take a hard look, because this is so 
unique. This is not housing, this is not automobiles; this is 
life and death. What is the proper role of the U.S. Government 
in terms of dealing with an industry in which we have been very 
closely related to that issue, putting a lot of funds into that 
issue, giving up tax breaks to go to Puerto Rico to develop 
their products; what is the moral and proper role of the U.S. 
Government in saying to you, we want you to continue to do your 
research, but we want the results of that research to be spread 
out and to be positive for working families in this country, 
for poor people in this country, and for desperate people all 
over the world?
    That is an enormously profound moral issue, and I hope as a 
Congress we can begin to address that issue.
    I wanted to congratulate all of the panelists up there, but 
I don't know if Dr. Lurie wanted to add 2 cents to what I said.
    Dr. Lurie. It is hard to. I think another way of putting it 
is like this: There is an inevitable tension between the price 
of the drug and its accessibility. Quite how that curve looks 
might vary from drug to drug, but as a general matter when 
price goes down, access will go up.
    What we have basically done in this country and elsewhere 
is taken the position that it is more important to maintain the 
ability of the pharmaceutical industry to retain these kinds of 
irrational drug price practices than it is to bring them down 
to prices like what they have in Canada, and in the rest of 
Europe; substantially lower than here, even knowing that as 
long as those prices remain high, people will not get those 
drugs, and if people will not get those drugs, they will die. 
Collectively that is the decision we have made. That seems 
unacceptable to me.
    Mr. Sanders. I would like to ask Dr. Siegfried, and I get 
disturbed, Doctor, by your telling me you don't know the 
answers, because that is the purpose of this hearing. If they 
sent you here as a nice guy and a good physician who does not 
know the answers, maybe they should have sent somebody else to 
answer these questions, because that is the issue we are 
dealing with today.
    Can you give me your response, and you indicated that you 
don't know why the prices of drugs, of Tamoxifen, in the United 
States, for women who are battling a life-and-death struggle 
with breast cancer, is 10 times higher in the United States 
than in Canada. You don't know the answer to that; is that what 
I hear you say?
    Dr. Siegfried. Congressman Sanders, I don't know the answer 
to that. But I do want to comment, going back to Mr. Mica's 
earlier observation, the pricing differential is one thing, but 
also the differential of what the pharmaceutical industry in 
terms of its research and development in Canada and others 
parts of the world versus what the United States has 
accomplished is also significantly different.
    I find, interestingly enough, and I may be perceived as the 
enemy because I represent the pharmaceutical industry, but I 
have found very little today in the presentations that I 
personally have much argument with. I have great concern that 
the goose that laid the golden egg not be killed in the process 
of trying to provide omelettes for people throughout the world. 
That is a personal concern.
    I really don't envy you or any members of the panel who 
have to struggle with these issues of how do you do that, how 
do you keep golden eggs coming out of pharmaceutical research 
and development, how do you do that in a situation that is 
going to allow pricing that is universally affordable, much 
less globally affordable. I don't have an answer to that, I'm 
sorry.
    Mr. Sanders. Let me just ask my last question, Mr. 
Chairman. That is actually taking something that came out of 
your statement. Maybe Mr. Love might want to comment on that.
    On page 3 or 4 of your statement, under compulsory 
licensing, you state that ``in terms of pharmaceutical 
production in times of national emergency, trade agreements may 
permit the government of a developing country to grant 
production rights to a local company.'' You say the question 
arises as to whether HIV/AIDS epidemic in sub-Saharan Africa is 
such an emergency. I am reading from your testimony.
    Jamie, did you want to respond to that? What we heard 
yesterday from my opponents on this amendment is that what 
South Africa is doing is illegal. My response is if it is 
illegal, take them to the WTO, don't take unilateral action. 
But I am hearing from Mr. Mica's own testimony that it is 
apparently not illegal; that if you have a medical emergency, 
you can produce generic drugs.
    I cannot believe that anyone could tell us with a straight 
face that what is going on in HIV and AIDS in South Africa is 
not a medical emergency.
    Mr. Love. It is true that in the international trade 
agreements that if there is a declared national emergency, the 
most liberal rules apply to compulsory licensing, which means 
that you do not have to try and do any prior negotiation. And 
the compensation is actually--is whatever is considered 
adequate under the laws of the national government; that is the 
part of the international trade agreement for international 
emergencies.
    But it's also true that those same roles apply to 
government use; that is to say that if a government 
manufactures through its public health service, even if it was 
not a national emergency, that those same liberal rules would 
apply.
    And I would go further to say that even if it wasn't for 
government use, and it wasn't an emergency, you are still 
permitted to do compulsory licensing, it's just that you have 
to follow a different set of procedures. And so within the WTO 
agreement, which we have a book here about the agreement that's 
published by the World Health Organization, including a chapter 
on compulsory licensing, you just figure out what rules should 
apply, depending on what you're trying to do.
    Now, you also, Congressman, accurately described this 
tension between claiming what South Africa is trying to do is 
illegal under the trade agreement and refusing to bring our 
dispute before the WTO's own dispute resolution mechanism. The 
South Africans are begging the United States to take them to 
the WTO. They're saying, if you think we violated the 
agreement, take us to the WTO, where at least we can have a 
decision by a judge. We only have a 2-year-old--2-year 
nightmare of sort of a Kafkaesque-like thing where we don't 
even know what we're accused of precisely. You submit briefs, 
there's a decision, and there's a finding. That's what they 
want.
    What South Africa--the problem the industry has with South 
Africa is precisely that what they're doing is legal under the 
agreement. That's actually why it's such an important case. And 
that's why bilateral is used, because if they were doing 
something illegal, we would already have a WTO, we bring WT 
cases against countries all the time.
    Mr. Sanders. Bananas.
    Mr. Love. Bananas; we bring it against India on pipeline 
protection. We won that. WTO, we're not afraid to use it. The 
reason why don't we use it in South Africa is we would lose; we 
don't have a case.
    Mr. Sanders. That's a good point.
    Do you think we have more Republican support in the future 
for this issue?
    Mr. Mica. Mr. Sanders, I think--as we begin hearings, I 
think the only two hearings on the AIDS question which was 
brought to my attention was one that Mr. Gilman did in his 
subcommittee and our subcommittee. This is the first time that 
ACT UP folks even had an opportunity to testify. And, again, I 
think if there's more education----
    Mr. Sanders. I applaud you.
    Mr. Mica. This is indeed unfortunate, and I commented to my 
colleague that, you know, you can have a disaster in Central 
America where 10,000-15,000 people are killed in a natural 
disaster, and we rush in with a supplemental appropriation and 
huge amounts of money, and it gets attention, where you have 
millions die.
    Mr. Sanders. You're absolutely right.
    Mr. Mica. Everyone is asleep at the switch. So it is an 
education process. Part of that is this hearing process, and, 
as I said, this is only the second hearing.
    Mr. Sanders. And I thank you very much.
    Mr. Mica. I will discuss with the ranking member the 
followup, and I think you can hold one hearing, and it doesn't 
mean anything on issues. But followup is important, and we have 
a whole range of areas. I mean, they've--this panel and the 
previous panel have given us enough to probably just do many 
hearings on with those comments. Let me just----
    Mr. Sanders. Let me thank you again. This is an enormously 
important issue, and you put together excellent panels. And I 
thank you very much.
    Mr. Mica. Let me yield now, and without difficulty, Mr. 
Sanders, that has not been a fun thing. I got heat from my 
side, from your side, from pharmaceutical folks, from 
congressional folks, from administration people. I mean, it is 
not a popular thing to do for some reason, but it does deserve 
our attention.
    With that, let me yield to the most patient, and she will 
get the last word on this issue, Ms. Schakowsky from Illinois.
    Ms. Schakowsky. Thank you, Mr. Chairman. And I've really 
appreciated spending the day on this important issue. And I 
hope that this hearing will result in some practical moves as 
the lady from the District has been seeking.
    I wanted to followup--that's the advantage of going last, I 
can comment on everybody--something that Mr. Lantos said, and 
he was right when he said that we're faced with competition, 
with these competitive requests all the time, particularly 
among diseases. And that's in a way the beauty of the 
recommendations that have come out of this panel is that we're 
not, in fact, talking about any taxpayer dollars, but rather 
using approved market and trade mechanisms and things that the 
United States could do at negligible costs to the taxpayer, 
other than working out an agreement and signing some papers.
    And so what you've presented to us, I think, are solutions 
that we ought to posthaste explore to make sure that we are 
delivering these drugs to people around the world at a cost 
that can be afforded.
    And the other thing that Mr. Lantos was talking about were 
strategies. What are the strategies that we can use that bring 
people together rather than separate them? And I'm hoping that 
we cannot pit, for example, prevention against treatment, 
because I think we all agree how important both are, and 
treatment we're facing, what, almost 40 million people around 
the world. This is a pandemic that currently have it, so 
clearly we do need to be talking about treatment.
    And I appreciate that one of you also talked about rather 
low-cost solutions, was it--who talked about for $70 a year the 
three drugs that could save many lives. We're not necessarily 
talking about $30,000 a year, and that was $70 at the U.S. 
costs that Mr. Sanders already showed us that is very often the 
highest in the world. We don't want to have diabetes versus 
AIDS, you know. Let's figure out ways that we can address both.
    And, again, with AIDS we're talking about not using 
taxpayer dollars. And let's also be concerned about, all of us 
in the United States, particularly African Americans and 
Latinos who don't have and/or may not be able to afford access, 
but I think also as Ms. Nkhoma, was it, said, we also need to 
treat each other around the world as brothers and sisters. And 
therefore, I hope we don't make this a Republican versus 
Democrat issue, so that we can all work together.
    There were a couple of questions that I wanted to ask Dr. 
Siegfried. Again, I am disappointed that these issues of South 
Africa and trade agreements are not your bailiwick, because 
that is what we're talking about today. But perhaps you can 
provide me with this information. I know you haven't come 
alone; I know there are other people from PhRMA that are with 
you, and certainly those that can help.
    What I'm interested in is knowing what the dollar amount 
that your members have received in tax credits and research 
funding from the U.S. Government over the past 10 years. What 
has been the U.S. investment? When you talk about the $24 
billion on research and development, I suspect that a good deal 
of that are taxpayer dollars as well; but in any case, what is 
the contribution to developing all drugs, that is, what is the 
U.S. contribution to R&D in the pharmaceutical industry and 
specifically in AIDS drugs. I would hope that I could get that 
information.
    Dr. Siegried. The $24 billion, I believe, is really 
industry money and does not include the public funding that 
you're speaking of. I don't have the information, and certainly 
not over a 10-year period of time. I'm not even sure whether 
that's easily available within the industry or through the 
government. But if it's information that's important, we can 
certainly try and get that to the chairman.
    Ms. Schakowsky. I think that it is important for us, when 
we talk about research and development, that we do have an 
understanding of the extent to which taxpayers are funding that 
as well.
    Dr. Siegried. I think one of the things that gets a bit 
confused here is that a lot of the public funding for NIH kinds 
of research is focused on what we call basic research. The 
industry picks up on that and does applied research. You sort 
of have to have the basic understanding of the scientific or 
pathogenic process before you can go ahead and develop drugs 
that might attack it. So the two are complementary. And there's 
a sense in which you can't have one without the other. We went 
through that a few years ago when NIH was into----
    Ms. Schakowsky. Dr. Siegfried, I'm going to ask your 
indulgence since my time is running out, if I can just ask my 
questions and you can answer.
    Dr. Siegried. I apologize.
    Ms. Schakowsky. No, that's OK. I'm also interested in--
because it relates to the question of parallel importing 
certainly. If we took the top 10 AIDS drugs and I could get 
information about the price of those drugs in the United 
States, Spain, Canada, South Africa and Australia, I would be 
interested to see, as Representative Sanders has found, these 
differentials.
    You also mentioned that we don't want to kill the goose 
that laid the golden egg. But it was Dr. Lurie's testimony that 
I think did put it in some perspective when he said that R&D 
represented a median of 11.4 percent of sales for the top 
pharmaceutical companies, and contrast to that with profit, net 
income representation, 18.6 percent of sales by those same 
companies in 1998.
    And another figure that I think would be useful to know, I 
would be interested to know how the advertising budgets compare 
to the R&D budgets as well. And I think that we want to be 
responsible in making sure we don't kill that golden goose, but 
we also want to have some sense of how those costs relate to 
other costs.
    Yes, Mr. Sawyer, do you have a response to that?
    Mr. Sawyer. I was going to say some of the questions you've 
asked, I know Jamie Love has data on it, according to the 
orphan drug tax credits for the development of several of the 
early AIDS drugs. The point you just made about the amount of 
money that was invested in research, Dr. Siegfried said 20 
percent is what the industry puts in. Dr. Lurie--actually 
analysis showed that it was 11 percent.
    I looked at Abbott Drugs' annual report. Abbott Drugs on 
sales of $12.8 billion, their own annual report listed their 
research and development budget at 9.8 percent of sales, 
because they invested less than $1.2 billion out of that almost 
$13 billion in sales into research and development. Their 
marketing budget was more than $2.6 billion. So more than 20 
percent went to advertising. Less than 10 percent went to 
research and development. That's just one company.
    But Jamie, I think, has data on early AIDS drugs.
    Dr. Lurie. I'm glad you're asking these questions, because 
historically it's been very difficult to get any kind of handle 
on what is going on in the pharmaceutical companies' accounting 
practices. Aside from the fact that there are millions and 
millions of dollars in handouts to the pharmaceutical industry 
that come courtesy of U.S. taxpayers, these estimates of R&D 
are themselves most likely distorted to the best that we can 
tell. Much of the R is not, in fact, R, but rather D. And much 
of the D is not D, but is probably marketing.
    And even the R that is done is primarily spent not on these 
breakthrough drugs, but much of the brainwork comes from the 
NIH and other places, or universities funded by the American 
Government, but instead is expended in the service of 
developing copycat drugs which provide little advantage over 
existing drugs rather than truly breakthrough ones, and then 
the process is that you just mount a massive advertising 
campaign, and you make your money that way.
    The money--that's where most of the work is being done in 
simple copycat drugs, and much less is--it's hard to tell, they 
don't give you numbers, but we suspect that limited amounts are 
actually true significant breakthroughs.
    Ms. Schakowsky. I wanted to ask if there are documents on 
hand that are responsive to this, I wonder if they could become 
part of the record of this--is that possible, Mr. Chairman?
    Mr. Mica. We can certainly--anything you would like to 
request, we would make a part of the record. We're going to ask 
questions to the previous panel. We will leave the record open 
for at least 3 weeks here so that we can get some responses, 
and we can submit questions. If you would like to do that, we 
would be glad to pass them on.
    Ms. Schakowsky. If Mr. Love could make--I know my time is 
up, but if you could answer.
    Mr. Love. One thing that the committee could be very 
helpful on is that there are these controversies about what it 
costs to develop a drug. I think we heard today 500 million, 1 
out of 10, that sounds like $5 billion a drug now. So every 
week it seems to be going up faster than Internet stock.
    One thing that the committee could do is the U.S. 
Government for some set of drugs has actually done all the 
clinical work, and if you were to ask Donna Shalala's office to 
provide you with data on what--for those drugs that it's 
actually taken all the way through approval, how much it costs 
for those drugs, we would leave the area of the Wizard of Oz 
behind the curtain and start dealing with real data, and it 
might be interesting.
    We've asked for that data, but I think, as the chairman of 
the committee, you're probably a much more important guy than 
we are; so it would be helpful if you would ask for that 
information, and maybe they would give it to you.
    The other thing is that there's an orphan tax credit which 
covers one-half of the cost of clinical trials that are done 
under the Orphan Drug Act, which includes all AIDS drugs, a few 
cancer drugs, and drugs for the severe illnesses. It's another 
independent audited source of information which would be a nice 
addition to the record; that is to say, for the drugs that are 
covered in that category, which includes all AIDS drugs plus 
other things, like how much do the companies report on their 
tax returns they actually spent on the clinical trials. Then 
you would also again go beyond the public relations world to 
the world of actual data.
    And if you were to take those two numbers and put them in 
the record, it would be maybe a helpful nice trend to actually 
look at the evidence.
    Ms. Schakowsky. Thank you.
    Mr. Mica. Well, thank you.
    Did anyone have any additional final questions?
    Well, we haven't gotten all the answers today, but we've 
certainly raised a lot of questions. We've gotten some answers.
    I want to thank each of you for participating in this 
hearing. I still have some questions that I will submit to some 
of the members of this panel and the previous panel.
    Dr. Siegfried, you didn't bring up the problem of 
liability. I'm a real big advocate of reform of product 
liability. And I've been told in the immunization area where 
you can buy an immunization shot for $10, that $6 or $7 of it 
goes now to product liability, and that, you know, $1 or $2 
goes into actually the manufacturer, plus we're losing 
manufacturers of some of these substances. So you need to get 
some more examples of some of the problems for us, but I think 
we have found a whole range of areas we can explore.
    The question of U.S. rights and the interests and research 
was an interesting thing that was raised, and we do have some 
rights, and maybe it should be part of our research grants that 
we ensure that we have some hook into that on behalf of those 
that are funding this.
    Certainly there's been--there was a great deal of 
discussion about unfair U.S. trade policy and actually 
preventing some of the countries from making the products 
available at reduced costs. And I think some of the suggestions 
about looking at providing additional licenses might be 
interesting.
    I was in the communications business, and lo and behold a 
government issued another license after we invested an 
incredible amount of money. I wasn't too happy, but that's the 
way the cookie crumbles sometimes, and it created competition, 
and the consumer benefited. And most importantly, I think we've 
opened some congressional debate. The important thing is that 
we have some followup.
    Our subcommittee has jurisdiction over international trade 
issues, over HHS, and a number of other agencies. There have 
been questions here about State--and maybe we can get Mr. 
Lantos and Mr. Gilman to followup on those issues. And then if 
the committee panel members have others, I think Agriculture 
was also mentioned, we don't have jurisdiction there--we can 
ask some of the other subcommittees to look at these, some of 
these problem areas.
    I think the interest, of course, is to see that we can get 
treatment, research, and development to everyone; not only in 
our country, but across the globe, as expeditiously as 
possible, especially when you're faced with a crisis of this 
magnitude that sort of has been glossed over to date.
    But again, in closing, I want to thank all of you for your 
participation. I'm sure you didn't anticipate being here 
through almost the dinner hour with us, but we do appreciate 
your testimony and your contribution to our subcommittee.
    Ms. Schakowsky asked unanimous consent that a statement by 
Congressman Jim McDermott be submitted for the record.
    [The prepared statement of Hon. Jim McDermott follows:]

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    Mr. Mica. She also asks unanimous consent that a statement 
by Donna Christenson be submitted for the record, and further 
that a statement from Doctors without Borders be submitted to 
the record. Without objection, so ordered.
    [The prepared statements of Mrs. Christenson and Doctors 
without Borders follow:]

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    Mr. Mica. We will also, without objection, leave the record 
open for 3 weeks, as I said, for additional statements. And we 
will be asking questions.
    There being no further business to come before the 
subcommittee, this meeting is adjourned.
    [Whereupon, at 5:11 p.m., the subcommittee was adjourned.]
    [Note.--The report entitled, ``Report on the Presidential 
Mission on Children Orphaned by AIDS in Sub-Saharan Africa: 
Findings and Plan of Action,'' may be found in subcommittee 
files.]
    [The prepared statements of Hon. Bernard Sanders and Hon. 
Henry A. Waxman, and additional information submitted for the 
hearing record follow:]

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