Niaraffitta«3SffiH£ BUSINESS
CHEMICAL EXPORTS SET RECORD But imports grew even faster in 2000, driving U.S. trade surplus lower
T
HE U.S. CHEMICAL INDUS-
try exported $79.9 billion w o r t h of p r o d u c t s last year, according to data from the C o m m e r c e D e p a r t m e n t , an increase of 13.3% over the prior year. That figure—a record high for the industry—was reached despite a strong dollar t h a t made international competition difficult for the U.S. chemical industry. But the strong dollar, especially against t h e euro, also made the U.S. an attractive market for foreign chemical producers. Imports of chemicals
into the U.S. rose 18.4% last year to $73.6 billion. The result of the rapidly rising imports was a further shrinking of the chemical trade surplus by 24.6% to $6.29 billion. Since hitting a record of $20.5 billion in 1997, the surplus has plummeted some 69%. In fact, 2 0 0 0 marks the lowest level for the surplus, long a source of pride for the chemical industry, since 1978. Within the broad chemicals and related products category, five subcategories —dyes, cosmetics, medicinal chemicals, plastics, and "other"—saw trade
BUSINESS
AIDS DRUG PRICES Merck drops prices on two drugs as industry defends patent protection
M
ERCK & CO. IS SHARPLY
lowering prices in developing countries for two antiretroviral drugs used to treat H I V infection. The cuts add a welcome twist to the debate over drug firms' responsibility in the HIV/AIDS crisis in Africa. Merck will sell Crixivan for $600 per patient per year and Stocrin for $500. Merck says the new prices—about one-tenth of U.S. levels—represent its cost of production for the drugs. With the cuts, Merck is accelerating a low-cost drug program launched last year with four other AIDS drugmakers. The program sought to strike agreements country-by-country, but was criticized by activists as too slow Under Merck's new plan, the HTTP://PUBS.ACS.ORG/CEN
drugs will be sold to all customers—governments, employers, and nongovernmental organizations—that can get them to patients. Merck says its only condition is that they not be reexported to other countries. The other major AIDS drug suppliers all indicated last week that they are considering similar price cuts. At the same time, though, the drug industry isn't backing off a fight against potential infringement of its AIDS drug patents by generics producers, mostly from India. In a South African court last week, the industry launched its case against a 1997 law, never invoked, that allows cheaper knock-off versions ofAIDS drugs to be sold in that country. The
balances improve, while CHEMICAL TRADE three —fertilizers and Surplus shrinks as both exports inorganic and organic and imports soar chemicals —saw bal$ Billions ances fall. In fact, or80 ~ Exports ganic chemicals, its trade deficit deepening by 62%, accounted for Imports more t h a n t h e total decline for all chemi1990 92 94 96 cals. Excluding organic SOURCE: Department of Commerce chemicals, the trade surplus for the chemical category was up 13%. Total chemical trade, however, is going to get slightly worse before it gets better, according to ISRAEL W I N S SEAT economists at the American ON ACS BOARD Chemistry Council. They predict that exports will rise 6.3% this year while imports will gain Stanley C. Israel will another 7.0%, pushing the surfill the one-year vacanplus about 2% lower. Next year, cy (2001) on the ACS the surplus will begin to recover, Board of Directors crethey say, rising almost 2 3 % as ated by the election of exports increase 7.5% and Eli M. Pearce to the imports rise a lesser 6.3%.— post of ACS presidentWILLIAM ST0RCK
companies argue that the law violates international agreements on patent protection. The trial is now on hold for six weeks after the court agreed that a local activist group, Treatment Action Campaign, could testify The industry said it needed the time to respond to broader issues that the group will raise. Interestingly, drug prices may now be less of an issue: Merck's new prices are well below those offered by the generics firms. —
elect for 2001. Israel, who received 239 votes to Michael P. Doyle's 139 in an interim election, will also serve a three-year term (2002-04) as a director-at-large. Voting councilors cast a total of 378 valid votes. One was invalid. None were blank.
MICHAEL MCCOY
C R I S I S M O D E Marchers in Pretoria demanded lowcost access to AIDS treatments.
C & E N / MARCH 1 2 , 2 0 0 1
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