[Ip-health] Second Wave of AIDS drug activism

[Sean Flynn]

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The Second Wave of Developing Country Activism on AIDS Drug Pricing

Sean Flynn and Mike Palmedo

Program on Information Justice and Intellectual Property

American University Washington College of Law

May 8, 2007





The announcement today of further generic AIDS drug price reductions by
the Clinton Foundation, following close on the heels of compulsory
licenses issued by Brazil and Thailand, indicates that the second wave
of developing country activism to create competitive generic markets for
needed AIDS drugs has arrived.



The first antiretroviral drugs to hit the market, such as AZT, were
often not patented in low and middle income nations. Permissive patent
laws in India, Thailand, Brazil and other countries permitted the
manufacture and consumption of the first AIDS drugs without utilizing
compulsory licensing as permitted by the WTO TRIPS agreement.  But
developing countries knew then that the day would come when newer more
effective medicines would be needed that would be covered by patents
required by the TRIPS agreement.  That is why they fought through the
WTO negotiations to retain the ability to grant compulsory licenses for
any reason, including to meet public health challenges.



Brazil and Thailand are developing countries with a long history of
robust public programs to treat people with AIDS.  These countries moved
first to lower prices of second-line antiretrovirals because they have
large numbers of patients with advanced disease who have been on
treatment long enough to require second-line treatments.  In addition,
WHO guidelines for best treatment practices have shifted to advise
including more newer medicines in the first line of treatment.  Over
time, all countries that desire to provide the best possible treatment
to their residents with AIDS will reach this point and demand access to
the low prices that only generic competition can create.



A highly-active antiretroviral treatment (HAART) regime, sometimes
called a "cocktail," typically consists of a backbone of two nucleoside
analogue reverse transcriptase inhibitors (NRTIs) plus a third powerful
drug such as a protease inhibitor (PI), or a non-nucleoside reverse
transcriptase inhibitor (NNRTI).



Brazil and Thailand both recently issued compulsory licenses for
efavirenz.  This drug is the most-prescribed NNTRI in the US, and it is
recommended by WHO as preferable to the older NNTRI nevirapine, which
has more side-effects. (Additionally, it can be used by people with both
HIV and TB, while nevirapine cannot.)  Last year, the World Health
Organization recommended improved cocktails for first-line HAART
regimes, half of which included efavirenz.



Thailand also recently issued a compulsory license for the combination
of lopinavir and ritonavir, which is a highly potent Protease Inhibitor.
This is considered a first-line medicine in the U.S., but it is
typically used as a second line treatment in lower and middle income
countries, after patients have developed a resistance to less expensive
first line drugs.



The problem facing Brazil, Thailand and other countries with mature
treatment programs is that there has not been a robust competitive
market for generic second-line and second-generation AIDS drugs.
Generic competition in the supply of the first line medications,
including drugs such as AZT, 3TC and Nevirapine, pushed prices down from
over $10,000 to under $200 for a year's supply of full cocktail.  MSF
data show that the average price paid for second line treatments is
$1,700 in low income countries and $5,229 in middle income countries.
As more and more patients need second line treatments, the burden of
these higher priced medications will grow more onerous.



The Clinton Foundation price reductions will improve the pricing
landscape by introducing further generic competition to the second line
and improved first-line antiretroviral drug market.  Antiretroviral
prices for the 66 countries that procure drugs through the Clinton
Foundation's Procurement Consortium will immediately fall 25-67%.  Over
the long run, increased generic competition will lower prices worldwide.
However, since the newer drugs are protected by more patents, further
compulsory and voluntary licenses and price reductions will be needed in
order to continue - and expand - the provision of HAART in low and
middle income countries.