[Ip-health] Cost of Kaletra per PWA in Thailand

[Sean Flynn]

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THE PRICE OF KALETRA IN THAILAND

Sean Flynn and Mike Palmedo

Program on Information Justice and Intellectual Property

April 30, 2007



One fact often overlooked in coverage of the Thailand compulsory license
is just how poor the country is, and how many people with AIDS there are
to treat.  Thailand is a county with under $3,000 GDP per capita
(compared to over $40,000 in the U.S>), and an AIDS rate over twice as
high as the U.S. (1.5% vs. 0.6% in the U.S.).



One measure of comparative affordability that includes universal
treatment goals looks to prices adjusted for BOTH GDP/capita and the
prevalence of the disease in the target country.  This measure
justifiably assumes that the goal of universal access will require lower
prices in countries that are particularly hard hit by a given health
condition.



Thailand is a pretty clear example of how low prices need to be to
accomplish universal access in hard hit countries.



Even using the price for Thailand most recently offered by Abbott,
albeit not yet accepted by the Thais ($1,000 per patient per year), the
price is about 10 TIMES HIGHER THAN THE U.S. price adjusted for GDP per
person with AIDS.



If the price of Kaletra in the US was the same percentage of GDP per
capita with AIDS as it is offered by Abbott in Thailand, the U.S. price
would be $41,924, not including the 2-3 other medicines needed to create
a fully effective AIDS treatment cocktail.  Conversely, if Thailand paid
the same amount of its GDP per capita with AIDS as the U.S. does, the
price in Thailand would be $93 /year.



To get to $93 a year, past experience with first-line AIDS drugs
suggests that robust competition among generic suppliers (which have
reduced the cost of a first-line complete cocktail from over $10,000 to
under $200 a year in 7 years), not unilateral price cuts by a
monopolist, will be the only effective driver towards affordability.  If
Thailand acts in a way that protects its future interests as well as its
present, it will reject Abbott's offer and help create a competitive
global market for second-line AIDS drugs.





GDP per Capita

US          $41,948

Thailand    $2,751



GDP per Person with AIDS

      $13,070,005

      $309,884

Price per person with AIDS

      $4,586

      $1,000

Price as % of GDP per capita

      10.9%

      36.4%

Price as % of GDP per PWA

      0.03%

      0.32%



The Population and GDP data are from the World Bank and the

number of people with HIV/AIDS is from the CIA World Factbook.  The US

price is the 2006 Average Wholesale Price as published in the Red Book.