Making Markets for Merit Goods: The Political Economy of Antiretrovirals - Working Paper 179
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Ethan Kapstein and Josh Busby
08/19/2009
This paper examines the role of policy entrepreneurs and global activists in shaping the international market for antiretroviral drugs to combat HIV/AIDS. When ARVs first came on the market in the 1990s they were exceedingly expensive, accessible only to those patients who had high incomes. But in 2006, a United Nations General Assembly Special Session (UNGASS) made an astonishing proclamation that there should be universal access to ARV treatment. This marked the first time in history that the international community pledged itself to chronic care for the ill, which in this case includes the approximately 30 million people around the world estimated to be HIV positive.
How do we explain the transformation of ARVs from private goods into merit goods that were to be made available to everyone? What are the lessons of the ARV story for other global issues?
Kapstein and Busby argue that those who promoted the creation of a universal access to treatment regime relied on the combination of moral arguments and ideas with favorable material circumstances. The moral argument was that access to ARVs was a “human right” or, conversely, that allocating ARVs solely on the basis of who could pay was morally wrong. These arguments were greatly facilitated by the lowering prices of ARVs caused by a combination of differential pricing and competition from generic producers, coupled with increases in foreign aid devoted to HIV/AIDS and other diseases.