CAMBRIDGE: Debates over drug pricing and intellectual property rights are raging. Many life-saving drugs, notably those used to fight AIDS, are produced under patents mainly by US and European pharmaceutical companies. The patent-protected prices of these drugs often puts them out of reach of poor people in the poorest countries. Thus, while many AIDS patients in rich countries are kept alive by these drugs, millions of people in poor countries are dying before they should, leaving behind misery, millions of orphans, and economic devastation.

A typical AIDS drug regimen is priced at about $10,000 per patient, per year in rich countries. The costs of producing these drugs, however, are much less than the market price, perhaps as low as $350-$500 per year for some of the three-drug combinations used to treat AIDS. Some quality producers of generic drugs, such as Cipla of India, have offered to provide these drugs at prices near to the cost of production. In response to this offer (and to bad publicity), Merck, Abbott Laboratories, and Bristol Myers Squibb, three large patent-holding companies, announced that their willingness to supply the African market at "zero profit" – ie, at around $500 per patient per year for the AIDS drugs they produce.

The tragedy of millions of impoverished people dying of AIDS even when drugs exist to treat them raises deep questions about global intellectual property rights, because patent protection is creating a barrier to essential medicines reaching the world's poor. But how can the benefits of a global patent system that provides incentives for innovation and new discoveries be combined with an assurance that poor people gain access to the medical care that they desperately need?

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