[Ip-health] New England Journal of Medicine: Closing the Affordability Gap for Drugs in Low-Income Countries

[Thiru Balasubramaniam]

http://content.nejm.org/cgi/content/full/357/20/1996

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Volume 357:1996-1999

November 15, 2007

Number 20


Closing the Affordability Gap for Drugs in Low-Income Countries
Robert Steinbrook, M.D.

The cost of treating human immunodeficiency virus (HIV) infection is
decreasing. Nonetheless, tenofovir=96emtricitabine=96efavirenz, the
standard first-line treatment in North America and Europe, is
prescribed rarely in low- and middle-income countries. The lowest
annual cost for a generic formulation of this regimen is still
hundreds of dollars more than the $100 annual cost of generic
stavudine=96lamivudine=96nevirapine, an effective but less safe
alternative that has been largely abandoned in Western countries (see
Figure 1).1


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Figure 1.  Annual Cost of Three First-Line Treatment Regimens for HIV
Infection.

Panel A shows the annual price per patient of an older treatment =97 30
mg of stavudine, 150 mg of lamivudine, and 200 mg of nevirapine,
administered as one pill twice daily (760 mg of active pharmaceutical
ingredients [API] per day). Panel B shows the annual price per patient
of two newer treatments: 300 mg of tenofovir, 200 mg of emtricitabine,
and 600 mg of efavirenz (1100 mg of API) and 300 mg of tenofovir, 300
mg of lamivudine, and 600 mg of efavirenz (1200 mg of API), a fixed-
dose combination that will probably be marketed within the next
several months. Both regimens are administered as one pill once daily.
According to the World Health Organization's 2006 treatment
guidelines, emtricitabine and lamivudine are interchangeable. The
lower of the two prices for brand-name tenofovir=96emtricitabine=96
efavirenz is also available in middle-income countries with an HIV
prevalence of 1% or greater among adults. The generic tenofovir=96
lamivudine=96efavirenz will be available at the $339 annual price to the
approximately 70 countries participating in the Clinton Foundation HIV=96
AIDS procurement consortium; the product will not be available in
North America or Europe. Data are adapted from M=E9dicins sans
Fronti=E8res.1

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Unfortunately, many medications remain unaffordable in low- and middle-
income countries. In the public sector, medicines are often provided
free of charge, but essential drugs may be unavailable.2 If they were
less expensive, governments could provide them to more patients and
international drug aid would benefit more people. In the private
sector, medicines are more available but not more affordable. One way
to estimate affordability is to calculate the number of days the
lowest-paid government employee would have to work to purchase a 1-
month treatment regimen.2 The affordability of standard treatment for
coronary heart disease in the private sector varies from less than 2
days' wages in Bangladesh and Sri Lanka to about 5 in Brazil, Nepal,
and Pakistan to more than 18 in Malawi (see Figure 2). The
affordability range of standard asthma and diabetes treatments is
similar.3

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Figure 2.  Affordability of Treatment for Coronary Artery Disease in
Six Low- or Middle-Income Countries.

Affordability is defined as the number of days' wages required for the
lowest-paid government worker to purchase a 1-month supply of generic
aspirin (100 mg daily), atenolol (100 mg daily), an angiotensin-
converting=96enzyme inhibitor (10 mg daily), and a statin (20 mg daily).
Brazil, Pakistan, and Sri Lanka are middle-income countries.
Bangladesh, Malawi, and Nepal are low-income countries. Data are from
Mendis et al.3

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Medicines may be unavailable because of bureaucratic factors that
delay licensure and discourage manufacturers from introducing drugs
into low-income countries. Manufacturers' prices are an important
cause of unaffordability, but there are many other factors, including
import tariffs and taxes, distribution costs, a lack of comparative
price data, and markups by distributors, pharmacies, and doctors who
dispense medications.

The affordability of generic drugs may be improved by increasing the
efficiency and volume of production, prescribing the lowest effective
dose, clarifying treatment guidelines so that manufacturers can focus
on fewer drugs, stimulating competition, negotiating with
manufacturers, and publicizing the lowest prices.1 However, it may
take years to streamline production and maximize volume-related
efficiencies. Without robust competition, generic manufacture does not
lead to the lowest prices; retail prices may dwarf production costs. A
credible threat of government action may also encourage price
reductions.

Drug companies have issued nonexclusive licenses for manufacturers to
produce generic versions of patented medicines for sale in low-income
countries and have established differential pricing for countries of
various income levels. Voluntary licenses, however, may limit the
countries in which the drugs can be sold and impose conditions that
some manufacturers find unacceptable. Although there is wide support
for tiered pricing for HIV, malaria, and tuberculosis medications,
there is disagreement about how to apply this mechanism to other
drugs, how to determine which countries qualify, how to set price
differentials, and how to prevent price spillovers to wealthier
countries.4 Differential pricing schemes vary widely among
manufacturers, creating confusion for purchasers.1 Moreover, in
countries such as China and India, there are many people with high
incomes who can afford Western prices, although most people cannot.

Compulsory licensing, a legal means for allowing the use of a patent
without the patent holder's permission, has been used in various
health care contexts. For example, in 2001, Tommy Thompson, then the
secretary of Health and Human Services, threatened to authorize
imports of generic ciprofloxacin without the permission of the patent
holder, Bayer, so that the antibiotic could be stockpiled for use
against anthrax.

Under World Trade Organization (WTO) rules, a country can issue
compulsory licenses for patented drugs to protect public health or
increase access to essential medicines. Although prices may fall and
access may improve, such licenses are controversial because they
affect intellectual property rights and the revenues of pharmaceutical
companies, which maintain that strong patent protection is an
important incentive for the investments in research and development
that lead to improved therapies.

In November 2006, Thailand issued a compulsory license for efavirenz,
a nonnucleoside reverse-transcriptase inhibitor and a critical
component of several first-line HIV treatment regimens.5 The license
permits the Thai Government Pharmaceutical Organization to import
generic efavirenz from India, where the drug is not patented, and to
make the drug itself =97 though Merck still holds a patent on it in
Thailand. Merck is to receive a royalty payment.

In January 2007, Thailand issued a compulsory license for lopinavir=96
ritonavir, the most commonly used protease inhibitor in the United
States. This coformulation is available from Abbott Laboratories as
both a capsule (Kaletra) that requires refrigeration and a heat-stable
tablet (Aluvia). Although both had been considerably more expensive in
many countries, they are currently available for between $500 and
$1,000 per patient per year in many low- and middle-income countries.
Kaletra is sold in Thailand; Aluvia is not. The Clinton Foundation HIV=96
AIDS Initiative has announced a price of $695 for generic versions of
the heat-stable tablet. Thailand also issued a compulsory license for
clopidogrel, an antiplatelet agent. In May 2007, Brazil issued its
first compulsory license, for efavirenz. It would not be surprising if
Brazil, Thailand, or other countries issued additional compulsory
licenses, the objections of the United States and pharmaceutical
manufacturers notwithstanding.

Brazil, Thailand, and India all have substantial capacity to produce
generic medicines. Indian generic drugs are among the world's least
expensive, because India has a thriving competitive pharmaceutical
industry and did not grant patents on medicines until 2005, when it
was required to do so by the WTO. India exports two thirds of the
drugs it makes and is the main supplier of essential medicines for
developing countries. Eventually, however, enhanced patent protection
is likely to drive prices up. In August 2007, the Chennai High Court
rejected a patent application from Novartis for imatinib mesylate, a
treatment for chronic myeloid leukemia. However, applications are
pending for many medicines, including tenofovir, lopinavir=96ritonavir,
and atazanavir, another protease inhibitor. It is likely that India
will eventually grant some patents, in which case generic-drug
manufacturers would require voluntary or compulsory licenses to
continue production.

For HIV =97 the realm where the affordability gap has received the most
attention =97 costs may continue to fall, as long as multiple generic
versions of key medications remain widely available in developing
countries and innovative strategies are used. When it is marketed, the
fixed-dose combination of tenofovir=96lamivudine=96efavirenz will be
priced at $339 a year, a 12% savings from the $385 annual price of
tenofovir=96emtricitabine=96efavirenz (see Figure 1), since lamivudine is
cheaper to make than emtricitabine. Both treatments contain about 50%
more of their active pharmaceutical ingredients than the fixed-dose
combination of stavudine=96lamivudine=96nevirapine, which increases
manufacturing costs. Within several years, lower prices for the new
regimens are likely.

Among protease inhibitors, which are essential components of second-
line regimens, atazanavir=96ritonavir, which is not currently made as a
fixed-dose combination, is an alternative to lopinavir=96ritonavir.
However, to compete, a generic version would have to be heat-stable.
If generic fixed-dose combinations of atazanavir=96ritonavir are
marketed and protease inhibitors remain off-patent in India, they
should be considerably less expensive options, because they are likely
to contain 60% less of their active pharmaceutical ingredients.

Although there are many strategies for closing the affordability gap,
each drug and disease poses unique challenges that require nuanced
approaches. The experience with HIV medicines has called attention to
the broader problem, but progress may come one drug at a time.


Source Information

Dr. Steinbrook (rsteinbrook@attglobal.net) is a national correspondent
for the Journal.

References

    1. Untangling the web of price reductions. 10th ed. Geneva:
M=E9dicins sans Fronti=E8res, July 2007. (Accessed October 25, 2007, at htt=
p://www.accessmed-msf.org/documents/Untangling10.pdf.)
    2. Gelders S, Ewen M, Noguchi N, Laing R. Price, availability and
affordability: an international comparison of chronic disease
medicines. Cairo: World Health Organization, 2006. (Accessed October
25, 2007, at http://www.haiweb.org/medicineprices/30052006/CHRONICANN.pdf.)
    3. Mendis S, Fukino K, Cameron A, et al. The availability and
affordability of selected essential medicines for chronic diseases in
six low- and middle-income countries. Bull World Health Organ
2007;85:279-288. [CrossRef][ISI][Medline]
    4. Danzon PM. At what price? Nature 2007;449:176-179. [CrossRef]
[Medline]
    5. Steinbrook R. Thailand and the compulsory licensing of
efavirenz. N Engl J Med 2007;356:544-546. [Free Full Text]


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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997