[Pharm-policy] WSJ on CIPLA offer

[love@cptech.org]

According to this WSJ report, weeks after the CIPLA offer was made not
much has changed in terms of availability of drugs.  Ok.  Got that.  But
what time frame does the WJS think is really realistic?   Think budget
cycle, time to obtain registrations and licenses, more negotiations
among buyers, signals from Western donor countries, efforts to pierce
commercial markets, etc.  I'm as impatient as the WSJ staff, but I think
one  take a look at what needs to be done to.  Jamie


---------
February 23, 2001   

  Health
Offer to Sell Cut-Rate AIDS Drugs
Failing to Draw Any Major Buyers
By ALIX M. FREEDMAN, RACHEL ZIMMERMAN and DANIEL PEARL 
Staff Reporters of THE WALL STREET JOURNAL


An offer to sell AIDS drugs at an extreme discount in Africa has yet to
find a major buyer, largely because international relief agencies are
still wrestling over how to provide the life-saving medicines on a vast
scale.

Two weeks ago, Cipla Ltd. of Bombay, India, jolted the drug industry and
the public-health community with its surprise offer to sell a
combination of three AIDS drugs at the much-reduced price of $600 per
patient per year to governments that want to buy the therapy. Cipla said
it would lower the annual price even more -- to $350 a patient -- to
Doctors Without Borders, an international nonprofit organization that
provides medical services in the developing world.

Both prices are much lower than the typical annual cost of about $10,000
for the AIDS-drug cocktails in the U.S. and Europe, and also less than a
discounted price that big drug makers began offering in Africa last
year. But Cipla has yet to receive any orders. "We thought, in our
naivete, we'd have people calling us and saying 'fantastic,' " says Amar
Lulla, Cipla's joint managing director. "It was stupid naivete."

Indeed, as the initial euphoria over the offer has died down, the
potential buyers of Cipla's drugs say they are deeply frustrated by the
complexity of buying and distributing the medicines where they are
desperately needed.

For instance, there is uncertainty over the role Doctors Without Borders
will play. In an interview this week, Bernard Pecoul, a top official at
the group, stressed that it has no intention of becoming a global
distributor of AIDS drugs; it plans to place a limited order with Cipla
(as well as with other drug firms) for its pilot programs involving no
more than 6,000 AIDS patients in 20 countries.

"It is not at all part of our mandate to cover the world and be in
charge of distributing AIDS drugs -- that's much more the mandate of
U.N. agencies," said Dr. Pecoul, who directs the group's campaign to
increase access to essential medicines, such as lower-cost antibiotics.

Mark Stirling, an adviser on AIDS issues in New York for Unicef, met
with Doctors Without Borders on Wednesday to talk about the possibility
of distributing drugs from Unicef's central warehouse in Copenhagen. But
Mr. Stirling cautioned that Unicef will need, among other things, to get
"stronger commitments" from developing nations that AIDS is a top
priority. "There is still great reluctance from countries to address
this," he said, noting that his agency would need a sharp increase in
funding to buy and distribute the drugs, even at the price offered by
Cipla.

Officials at other U.N. agencies also are proceeding cautiously, saying
they need more information about the viability of Cipla's proposal.
Their questions include whether Cipla will maintain the price and
availability of its product, as well as the patent implications of using
a generic drug in various African countries.

A further difficulty is that Cipla has indicated it is prepared to offer
its government price of $600 only to those countries that have "the
backing of Doctors Without Borders." But the doctors' group says this
approach is impractical; it wants Cipla to make its "humanitarian" price
of $350 directly available to governments in the developing world.

"We aren't looking for a humanitarian price, but a global price for
governments," Dr. Pecoul said. He said that his "target price" for AIDS
drugs is even lower than what Cipla has proposed. At $200 per patient
per year, he believes the drug combinations become affordable for a
significant number of people in poor nations.

Even at $350, it isn't clear whether governments will embrace the Cipla
offer. For instance, in India, where some 3.7 million people are
infected with HIV, Prasada Rao, head of the National AIDS Control
Organization, said that it is unlikely his government could even afford
a $350-a-year price.

Despite widespread agreement that subsidies for AIDS drugs need to come
from rich countries and philanthropic foundations, interest remains
negligible. The World Bank is now weighing whether to make loans
available to countries to buy AIDS drugs. But Debrework Zewdie, the
bank's top AIDS official, said that loans alone aren't the answer. A key
part of the solution: "Rich countries need to get involved," she said.

Still, according to the World Health Organization, AIDS drugs are
unlikely to win funding subsidies from foundations and wealthy nations
until prices fall even further. Five large drug makers in May 2000
pledged to cut the price of AIDS drugs in poor nations. But so far, only
a tiny fraction of people infected with HIV in Senegal, Rwanda and
Uganda have benefited from this effort, largely because the African
nations say they don't have the money to buy drugs even at reduced
prices.

Now, in the wake of the Cipla offer, the pharmaceutical giants are under
even more intense pressure to cut costs and waive patent restrictions
that block their generic rivals -- and they too, have begun clamoring
for a coordinated political response. "Massive increases in donor
funding are the missing element when it comes to having a significant
impact on this pandemic," said Robert Laverty, a spokesman for AIDS-drug
maker Bristol-Myers Squibb Co.

Write to Alix M. Freedman at alix.freedman@wsj.com, Rachel Zimmerman at
rachel.zimmerman@wsj.com and Daniel Pearl at danny.pearl@wsj.com