[Ip-health] WSJ: Generics Fuel AIDS Program

[Eleanor Blume]

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http://online.wsj.com/public/article/SB121746894789699503.html?mod=2_1566_leftbox

Generics Fuel AIDS Program By SARAH LUECK
July 31, 2008; Page B5

WASHINGTON -- Companies that make generic drugs, many based in India, now
dominate President George W. Bush's program to provide AIDS treatment in
poor countries.

Generic drugs, copies or combinations of brand-name products, accounted for
57% of the $131 million the U.S. spent on the program in fiscal 2007,
according to the Office of the U.S. Global AIDS Coordinator. In 2005,
generics accounted for 11% of the program's funding. At that time, the U.S.
had approved few generics for the anti-AIDS initiative, so most of the money
went to buy brand-name drugs that are often more expensive.

Aurobindo Pharma Ltd., a generic-drug maker in India, was the biggest player
in fiscal 2007, which ended Sept. 30. The President's Emergency Plan for
AIDS Relief, or Pepfar, spent more than $39 million on Aurobindo Pharma
products to fight HIV and AIDS. India's Cipla Ltd. received more than $15
million, and Ranbaxy Laboratories, also in India, received nearly $9
million.

South Africa's Aspen Pharmacare
Holdings<http://online.wsj.com/quotes/main.html?type=djn&symbol=APN.JO>Ltd.
received nearly $13 million from Pepfar. It sells generic AIDS drugs
and, in some countries, produces brand-name products in partnership with Gilead
Sciences <http://online.wsj.com/quotes/main.html?type=djn&symbol=gild> Inc.
of Foster City, Calif.

Pepfar's shift to generics in the past two years followed a Bush
administration decision to set up a special approval at the Food and Drug
Administration for the drugs, which cannot be marketed in the U.S. because
of patent and exclusivity laws that protect the brand-name versions.

Pepfar provides treatment to patients in 15 poor countries, mostly in
sub-Saharan Africa. Bush officials came under fire when the program began
five years ago; activists and some in the generics industry complained that
the requirement for FDA approval skewed purchases toward more-expensive
brand-name products, meaning fewer people would be treated.

Wednesday, Mr. Bush signed a $48 billion, five-year expansion of the
program, which now draws widespread praise and is viewed as a major part of
his legacy. Congress must appropriate the funds, which also will go toward
treatment and prevention of malaria and tuberculosis.

"It's pretty clear that the system is working well, and it protects African
families just like American families are protected," said Ambassador Mark
Dybul, the U.S. global AIDS coordinator. "We pretty methodically did what we
said we were going to do."

Pepfar's spending on brand-name drugs totaled about $56 million in fiscal
year 2007, down from $106 million in 2005.
Merck<http://online.wsj.com/quotes/main.html?type=djn&symbol=mrk>& Co.
appeared to be the biggest recipient of funds in 2007, with nearly $16
million going to the Whitehouse Station, N.J.-based company.
GlaxoSmithKline<http://online.wsj.com/quotes/main.html?type=djn&symbol=gsk>PLC
of the U.K. received about $12 million from Pepfar, including through
licensing agreements it has with makers of generics. Abbott
Laboratories<http://online.wsj.com/quotes/main.html?type=djn&symbol=abt>of
Abbott Park, Ill., received nearly $9 million in 2007.

The generics companies have been pleased with the changes over the past two
years.

"Earlier, it did not work well because none of our products were approved,"
said Yusuf Hamied, Cipla's chairman and managing director. "Now, there is
competition, and the money will be put to better use." He said the funds
Cipla receives from Pepfar aren't significant from a business perspective,
but the company participates for humanitarian reasons and has helped build
pressure for brand-name-drug companies to lower their prices for poor
countries.

"The key is having affordable and accessible medicines, and I think the
generic industry has made a contribution in a very positive way to Pepfar,"
said Chuck Caprariello, a Ranbaxy spokesman.

Write to Sarah Lueck at sarah.lueck@wsj.com