Published Online: Sunday, July 1, 2007

Compulsory licensing orders designed to lower prescription drug prices by stimulating generic competition could have a chilling effect on industry research and development (R&D), including the next generation of AIDS medicines, a spokesman for US branded pharmaceutical manufacturers warned foreign governments.

The Pharmaceutical Research and Manufacturers of America (PhRMA) is "deeply troubled by the recent trend toward the issuance of compulsory licenses for pharmaceutical products" by third-world nations and other foreign states, said Billy Tauzin, president and chief executive officer of PhRMA. "This misguided focus on short-term 'budget fixes' could come at a far greater longterm cost, potentially limiting important incentives for research and development that are necessary to positively impact the lives of millions of patients worldwide," he warned foreign regulators.

Noting that there are currently 77 medicines and vaccines in development for HIV/AIDS and opportunistic infections, Tauzin said that, because of the R&D investments of PhRMA members over the past 20 years, HIV/AIDS has gone from an automatic death sentence to "a manageable chronic disease for many people."

If compulsory licensing requirements deny manufacturers a return on their research investment, "then companies will have less incentive to develop new lifesaving treatment options," Tauzin said. "And even though today's medicines have been effective in treating many diseases prevalent throughout the developing world, what happens if currently available options cease to work? What happens when new patients become resistant to old drugs?"

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