Making Markets for Merit Goods: The Political Economy of Anti-Retrovirals

hy were AIDS activists and AIDS policy entrepreneurs successful in putting universal access to treatment on the international agenda when so many other global campaigns–whether in health care or other issue areas like climate change–have either failed or struggled to have much impact? In our view, the market for antiretroviral (ARV) drugs was politically constructed, meaning that activists had to bring the demand and supply sides of the market together through a variety of tactics and strategies. The idea that motivated the activists was that ARVs should ideally be “merit goods,” meaning goods that are available to everyone regardless of income. However, when ARVs first came on the market, poor people in the developing world lacked the financial resources to buy the drugs, which were exceedingly expensive. AIDS activists successfully lobbied donor nations to use foreign aid to buy the drugs, and they pressured pharmaceutical companies to lower their prices, while encouraging generic firms to enter the market. How did these developments evolve into the universal access to treatment regime? We focus on: (1) permissive material conditions (2) convergence on a policy prescription, (3) attributes of the activists and (4) the broad base of political support for their cause. The success of this strategy was ultimately conditional upon permissive material conditions—falling ARV prices, increases in foreign aid, and a growing global economy. However, these favorable material conditions were not enough. Activists were fortunate to converge on a single policy in the treatment arena. AIDS prevention policies, by contrast, have been much more politically contested and suffered accordingly.  But the effort to extend treatment would not have happened without advocates who had the credibility to make the case to policymakers and a compelling set of moral arguments that enabled them to build a broad political coalition. We believe that activists who focus on other issue-areas, again whether in the health care space or in other domains, could learn something of importance from our research. The basic difficulty and costs of certain policies may make some problems harder to solve than others. Even where a policy enjoys favorable material conditions—i.e. low costs, large benefits, demonstrated feasibility—this may not be enough. A clear prescription, credible messengers, and resonant arguments may be necessary for an issue to receive adequate political support.