Over the past five years, the cost of a year’s supply of antiretroviral (ARV) drugs in South Africa has plummeted from over R95 000 to around R1 200 for the standard ‘first-line’ package of three drugs a day ‘ largely because generic ARV drugs are now available.
‘Second-line’ drugs for people who develop side-effects or resistance to the first-line drugs are still significantly more expensive as they tend to be newer drugs still under patent protection.
Aspen Pharmacare, the largest pharmaceutical company listed on the Johannesburg Stock Exchange, has played a key role in securing voluntary licenses from pharmaceutical companies to enable it to make cheap generic versions of brand name drugs.
Despite AIDS activists’ demands that government should issue compulsory licenses to enable the generic manufacture of antiretroviral drugs still under patent, Aspen senior executive Stavros Nicolau is convinced that the voluntary license route was in the country’s best interests.
‘South Africa was one of the few countries to pursue voluntary licenses with pharmaceutical companies instead of government simply issuing compulsory licenses,’ says Nicolau. ‘This has enabled us to avoid acrimonious relations with pharmaceutical companies which could be detrimental to patients.’
Aspen first started pursuing voluntary licenses five years ago at a time when few would have given generic ARVs a chance in the public sector. That year, the country was still in the grips of AIDS denialism and President Thabo Mbeki had raised in Parliament whether a virus could cause a syndrome and spoken about the toxicity of ARVs on a number of occasions.
However, by 2001 Aspen had secured its first voluntary license from GlaxoSmithKline to manufacture AZT and 3TC. Since then, it has secured voluntary licenses from Bristol-Myers Squibb (for stavudine and didanosine), Boehringer Ingleheim (for nevirapine) and Merck Sharp & Dohme (for efavirenz). The MSD deal, announced in July, is particularly significant as efavirenz is currently the most expensive drug in government’s first-line treatment regimen.
2005 has been an excellent year for the company, and Nicolau laughs that ‘there have been about 30 highlights but I’ll try to mention only the top four’.
The first came in January, when the company became the first generic manufacturer to get approval from the US Food and Drug Administration (FDA) to supply ARVs to projects funded by George W Bush’s President’s Emergency Plan for AIDS Relief (PEPFAR). Part of the approval process involved a rigorous assessment of the company’s Port Elizabeth manufacturing plant.
‘No one expected a South African company to be the first generic company in the world to get FDA approval, and it shows the level of technical and scientific expertise that we have in this country,’ says Nicolau.
However, supplying both African governments and PEPFAR projects is still in its infancy, says Nicolau, as many of the Aspen generics are still in the process of being registered in the various African countries.
The second major highlight came in March, when government announced that Aspen was the main beneficiary of the health department’s tender for ARVs, supplying eight out of 15 categories of drugs.
In April, Aspen secured a non-exclusive licensing and distribution deal with Gilead Sciences to make generic versions of the ARVs, Truvada (a combination of emtricitabine and tenofovir) and Viread (tenofovir).
In terms of the deal, Gilead will provide Aspen with the active pharmaceutical ingredients, the key raw materials needed to make the medicines. In return, Aspen will manufacture and supply generic versions of Trvada and Viread to 95 resource-limited countries named in Gilead’s Global Access Programme, including every country in Africa.
The most recent highlight came in September, when Aspen entered into a joint venture with India’s Matrix, one of the world’s largest manufacturers of active pharmaceutical ingredients (APIs) for ARVs.
Nicolau describes the venture as a ‘very strategic deal aimed at ensuring that we never leave our patients in the lurch’.
‘We realised that we had to secure the source and supplies of APIs as we are anticipating that there might be capacity constraints [from API suppliers] with the scale-up,’ says Nicolau. ‘We cannot afford to have any problems with the supply of our drugs. Even if patients miss a few doses, they can develop drug resistance.’
In terms of the venture, Matrix gets 50% of Aspen’s Cape Town-based Fine Chemicals while Aspen gets 50% of an API manufacturing facility in Hyderabad in India, which has been renamed Astrix.
Astrix will become Aspen’s main supplier of APIs for all its generic ARVs, ensuring that the company has both ends of its operations covered ‘ the raw goods and the technology to turn them into medicine.
Aspen, which employs 2 578 people and produces four billion tablets a year, posted a 40% increase in headline earnings per share at the end of its financial year in June. But its success does not only line shareholders’ pockets, but benefit millions of South Africans for whom antiretroviral treatment was only an impossible dream five years ago. ‘ Health-e News Service.
(First published in Financial Mail, December 2005)