‘Cut-price’ anti-AIDS drugs may still cost more than generics

‘Cut-price’ anti-AIDS drugs may still cost more than generics

The fresh offer from five major pharmaceutical companies to reduce the price of anti-AIDS drugs still does not answer the vexed question of what is their best possible discounted price.

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The international organisation Médecins Sans Frontières (MSF) reacted sceptically to the announcement, made by Boehringer Ingelheim, Bristol-Myers Squibb, Glaxo Wellcome, Merck and F.Hoffmann-La Roche under the auspices of the Joint United Nations Programme on HIV/AIDS.

“The fact that a serious discussion has begun among drug companies on dramatically reducing the price of Aids drugs is a victory, but a small one, much like an elephant giving birth to a mouse,” said Dr Bernard Pécoul, of MSF.

Earlier this week, the Parliamentary Portfolio Committee on Health held hearings into the availability of treatment and care for people living with HIV/AIDS. At Wednesday’s hearing, Glaxo Wellcome, producer of two of the most widely used antiretroviral drugs, AZT and 3TC, said that it was offering its products at a 75 percent reduction on world prices to the South African government.

Precisely what this figure represented in terms of what it costs the company to produce the medicine is not clear. This point frustrated the chairperson of the health portfolio committee, Dr Abe Nkomo, who repeatedly asked, “75 percent of what?”.

Corporate Affairs Director for Glaxo Wellcome, Ms Vicky Ehrich dodged the question, reiterating the fact that production costs were confidential and needed to remain so given the competitive nature of the pharmaceutical industry.

The new announcement by UNAIDS and the five drug companies which suggests that the discount offered will be 85 percent, still does not answer this question.

However, the international organisation,  MSF or Doctors Without Borders believes that it is only through the production of generic antiretrovirals that prices will fall dramatically.

At the parliamentary hearings, MSF co-ordinator of the access to essential medicines campaign in South Africa, Mr Toby Kasper, said that an offer of 75 percent off the world price was still considerably higher than the cost of buying generic copies of AZT and 3TC.

“We have information that suggests that the figures discussed which bring the costs of AZT treatment to roughly US $2 500 a year (approximately R17 500) is not as far as the pharmaceutical industry can go.

“Brazil can produce triple combination therapies for US $1 000 a year, and are even aiming to reduce that to a fifth of that price in two year’s time through the use of generic medicines.”

The Pharmaceutical Manufacturers Association is fundamentally opposed to the use of parallel importation or compulsory licensing to allow for generic versions of anti-AIDS drugs to be made available in South Africa.

According to Ehrich, competition between drug manufacturers existed at the level of therapeutic competition which she said created “healthy competition”.

“We do not see compulsory licensing or parallel importation as a solution. It’s a disincentive to research the very important areas of diseases which are endemic to the developing world.”

She said that her company was willing to discuss lower prices with government through the state tender system and that this was the channel that should be followed to secure a reduction in prices and greater access treatment.

Kasper counters this view. Research by MSF showed that price competition in countries without intellectual property protection laws – or where the law was lax – had resulted in a rough price reduction of 80 percent for a basket of five antiretrovirals.

In comparison, there had been a price reduction of less than 20 percent in those countries where drug companies insisted on their patent rights.

Kasper said he believed prices should go much lower. “We’re looking at the profit history of these antiretrovirals. These drugs have recouped their research and development costs several fold. Companies have more than made back their initial investment costs especially given the fact that a lot of anti-retrovirals were initially developed by researchers funded by the United States National Institute of Health.”

He said that MSF was not opposed to patents, but said that the status quo should be reviewed in the face of the AIDS pandemic which threatened to wipe out a quarter of the population in sub-Saharan Africa.

“We believe that it’s immoral for Glaxo Wellcome to insist on the same levels of intellectual property rights protection for antiretrovirals as they do for products such as Viagra and other lifestyle drugs.

“We also believe that in the special case of antiretrovirals, the drugs are in large part developed, there’s little reason why they couldn’t be provided at marginal cost of production.”

Kasper said it would have minimal impact on drug companies bottom line, especially seeing as Africa accounts for only one percent of global pharmaceutical sales. -Health-e News