[Ip-health] Fwd: TAC complaint increases access to efavirenz: MSD finally agrees to grant licenses on reasonable terms

[Jonathan Berger]

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> From: TAC Electronic Newsletter <moderator@tac.org.za>
> Date: 01 June 2008 10:08:51 AM
> To: bergerj@alp.org.za
> Subject: TAC complaint increases access to efavirenz: MSD finally
> agrees to grant licenses on reasonable terms
>
> TAC complaint increases access to efavirenz: MSD finally agrees to
> grant licenses on reasonable terms
>
> Acting on behalf of TAC, the AIDS Law Project (ALP) lodged a
> complaint with the Competition Commission of South Africa in late
> 2007 alleging that MSD (Pty) Ltd =E2=80=93 the South African subsidiary o=
f
> multinational drug company Merck =E2=80=93 was unlawfully refusing to
> license the antiretroviral (ARV) medicine efavirenz (EFV) on
> reasonable terms. (=E2=80=9CTAC complains to the Competition Commission
> about the anti-competitive conduct of the world's largest
> pharmaceutical company=E2=80=9D at http://www.tac.org.za/community/node/
> 2127.) Today, TAC is pleased to announce that MSD is no longer
> acting in an anticompetitive way, paving the way for the market
> entry of a wide range of affordable EFV products.
>
> According to the ALP=E2=80=99s records and recent correspondence from the
> Commission, MSD has =E2=80=93
>
> Licensed four generic drug companies =E2=80=93 two local producers and tw=
o
> locally-based importers =E2=80=93 to bring stand-alone EFV products to
> market;
> Agreed that all four licensees are entitled to bring co-packaged
> products containing EFV to market;
> Agreed that all four licensees will not unreasonably be refused
> consent to bring co-formulated products containing EFV to market;
> Agreed that all licensed products can be sold to both public and
> private sectors in South Africa and 10 other southern African
> countries (Angola, Botswana, DRC, Lesotho, Madagascar, Mauritius,
> Namibia, Seychelles, Swaziland and Zimbabwe); and
> Waived any right to a royalty.
> On the basis of these significant developments, the Commission
> believes that there is no reason to refer the complaint to the
> Competition Tribunal for adjudication. TAC agrees. Because MSD has
> agreed to grant multiple licences on reasonable terms, which was
> always the central demand, TAC has decided that it too will not
> refer the matter to the Tribunal. It is of the view that there is
> no compelling purpose served by referring what is now largely a
> historical complaint. Instead, TAC will focus on ensuring that the
> reasonable terms of the licensing agreements are appropriately
> implemented.
> What are stand-alone, co-packaged and co-formulated products?
> Stand-alone products include various dosages of EFV tablets sold
> separately. Co-packaged products include EFV sold in the same
> single pack =E2=80=93 often in the form of a blister =E2=80=93 with other=
 ARV
> medicines that are ordinarily prescribed with EFV. Co-formulated
> products include EFV sold as part of a fixed-dose combination (FDC)
> product, which may combine two or more different ARV medicines in a
> single tablet. FDCs (and co-packaged products to a lesser extent)
> are widely recognised to improve adherence to ARV and other chronic
> treatments.
>
> What are the implications of the developments?
> In practical terms, this means that there are now a sufficient
> number of competitors to ensure that EFV prices are kept as low as
> is reasonably possible. It also means that the public sector, which
> until relatively recently was paying 64 cents in every rand spent
> on first-line ARV treatments for EFV alone, can now choose to
> procure from up to five suppliers. This fact also means that we no
> longer have concerns regarding the sustainability of ex-
> manufacturer supply.
>
> Importantly, the generic licensees are now in a position to sell
> the following forms of EFV if and when they are registered:
>
> Stand-alone products:
> 30mg/ml paediatric suspension;
> 50mg, 100mg and 200mg capsules; and
> 600mg tablets;
> Co-packaged products (EFV with either two separate ARV products or
> a double FDC):
> EFV + zidovudine (AZT) + lamivudine (3TC);
> EFV + stavudine (d4T) + 3TC;
> EFV + tenofovir (TDF) + 3TC;
> EFV + TDF + emtricitabine (FTC);
> EFV + didanosine (ddI) + 3TC;
> EFV + AZT/3TC;
> EFV + d4T/3TC;
> EFV + TDF/3TC; and
> EFV + TDF/FTC; and
> Co-formulated products:
> TDF/3TC/EFV; and
> TDF/FTC/EFV.
> To date, the Medicines Control Council (MCC) has registered a
> number of stand-alone generic EFV products. The ALP has been
> advised, however, that a number of co-packaged products containing
> EFV are already in the registration queue, and that generic FDC
> products are likely to be brought to market in the foreseeable future.
>
> Why are licensees needed to bring (almost all) combination products
> to market?
> With the single exception of the TDF/FTC/EFV combination (MSD=E2=80=99s
> Atripla, which is still pending registration in South Africa), none
> of the co-packaged and co-formulated products would have been able
> to be placed on the South African market. This is for the following
> three reasons:
>
> In the absence of licensing agreements, the EFV patent does not
> allow any company other than MSD to bring EFV products to market;
> MSD=E2=80=99s agreement with Gilead, which holds the rights globally to
> TDF and FTC, is limited to a single FDC (Atripla); and
> MSD does not have the right, nor has it indicated the intention, to
> bring 3TC products to the South African market.
> In contrast, three of the four licensees have secured licensing
> agreements to bring generic 3TC products to market. (=E2=80=9CCompetition
> Commission Settlement Agreements Secure Access to Affordable Life-
> Saving Antiretroviral Medicines=E2=80=9D at http://www.tac.org.za/
> newsletter/2003/ns10_12_2003.htm.) AZT is no longer under patent
> protection in South Africa, whereas TDF was never patented in this
> country. In addition, the patents on d4T, ddI, and FTC are not
> enforced in the country. In short, EFV was the only ARV amongst
> those already discussed in respect of which a patent barrier
> prevented much-needed combination products from being sold in South
> Africa.
>
> What price reductions have we already seen?
> When TAC and the ALP first started to engage MSD on this issue as
> far back as May 2002, the company sold a year=E2=80=99s supply of EFV for
> one adult for US$500. That price has dropped significantly. Today,
> MSD=E2=80=99s best international price for a year=E2=80=99s supply is US$=
237.25.
> In contrast, the best international price for a generic equivalent
> of proven quality, safety and efficacy is US$150. In the South
> African private sector, MSD=E2=80=99s EFV sells for R166.90 (VAT
> inclusive) for a 30 days=E2=80=99 supply. In contrast, the cheapest
> registered generic equivalent sells for R136.80. These prices are
> expected to drop even further.
>
> Price differentials in respect of FDCs are even greater. MSD has
> committed to sell Atripla at US$613.20 per patient per year. In
> contrast, the Clinton Foundation HIV/AIDS Initiative (CHAI) has
> managed to secure a commitment from a reputable Indian company to
> bring generic TDF/FTC/EFV to market for only US$349 per patient per
> year. The same company has also committed to bringing generic TDF/
> 3TC/EFV =E2=80=93 which is considered as therapeutically equivalent to th=
e
> FTC version of the FDC =E2=80=93 for US$299 per patient per year. South
> Africa is entitled to purchase drugs through CHAI.
>
> We have updated our fact sheet on the complaint.
>
>
>
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