E-drug: Generic ARV production and sales
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[Cross-posted from Ip-Health. Long message; well worth reading.
HH]
February 18, 2003
Presentation of William F. Haddad
Chairman/CEO Biogenerics Inc., Representing Cipla
With all due respect, the main item missing from today's agenda is,
for the generic industry, the most important aspect of our
discussions.
While tariffs are important and diversion is a problem, what
continues to trouble generic producers of AIDS medicines is the
lack of a level playing field. It does not exist almost three years
after Dr. Yusuf Hamied set this process in motion by reducing the
cost of a triple ARV to less than a dollar a day - the price is now
about $300 a year�a dramatic reduction from the $12-15,000 a
year that we were told blocked access to the medicines that, as
former President Clinton said, can convert a certain death sentence
into a chronic illness but were not being used.
It now appears to me that issues like "tier pricing" and the
misnamed "Accelerated Access to Medicines" appear to be
smokescreens to use the generic threat to force multinationals to
lower their prices with little or no concern about how to sustain the
lower priced competition. If you will permit an American clich�, we
are getting a lot of lip service and not much more.
Let me cite a recent incident that encapsulates all of these fears.
At this meeting a few months ago, I complained that the so-called
Accelerated Access to Medicines program, announced with great
fanfare by the Secretary General of the United Nations, the United
States and most of the UN agencies had been converted into a high
price monopoly in the Caribbean. The well publicized and promoted
announcement proclaimed a reduction in the price of AIDS
medicines by the very multinationals that had kept the lower priced
generics from the African market even though their price all but
prohibited African use. There was no mention of the generic
rebellion that forced the multinationals to lower their price. The
generics were not invited to meet with the Secretary General and
were excluded from the announcement even though generic prices
were a fraction of what was being presented to the media as
admirable and dramatic reductions in prices. It was half a story that
flourished in the media.
At this forum, I complained in a rather undiplomatic way that this
honey covered poisoned approach was being spread to Central
America and the Andean nations and again we were not part of the
program.
After that meeting, two of the participants arranged for me to make
a one-hour presentation to the Ministers of Health of Central
America at the Accelerated gathering in Panama City. My talk was
preceded by an anti-generic tirade - arguments we have not heard
in twenty years - by the Minister of Health who chaired the session.
He sounded very much like Jeff Sachs who offered identical
arguments at the WHO sponsored meeting in Oslo to consider
tiered pricing. In the Panama talk, I quietly and diplomatically cited
the difference between the generic prices and those being offered
them by the multinationals.
Frightened that my comparison would subvert the expected
headline (which did appear in all of the papers): "Prices for AIDS
Medicines Cut Eighty Percent" - I was banned from attending the
press conference�banned - although the diplomatic compromise
was that it would be mentioned that a generic spokesperson had
attended. No mention of the price differences - which were
considerable - between the generic and multinational offers.
Then, to my surprise - on the day before the press conference -
President Bush, in his State of the Union message made on the
evening of my earlier talk, cited similar arguments and the fact that
it was now possible to reach the poor because prices for these
medicines had dropped from $12,000 to $300. With the President's
talk in my hand, I stood outside the closed door of the meeting and
provided the text to participants as they left the meeting for coffee
or to go to the bathroom. One Minister of Health had it reprinted for
all the others.
My point: that is one hell of a way to make your case. But closed
doors are nothing new to us in this battle to have our views heard.
We are back to square one. Talk of tariffs, diversion, etc., are, in
their own right, very important secondary issues but what is
happening reminds me of Nero playing the violin while Rome
burned.
If you want us - the generic industry - to be part of the solution and
not part of the problem, you must give some priority to our
concerns. What are they? You have heard them before: level
playing field, predictability, access to the decision-making process.
You can not build generic competition, the key to affordable prices,
by uncertainty or dangling us before the multinationals to get them
to lower their prices. No company - generic or multinational - with
or without stockholders - is going to invest in the production of raw
materials and finished product under the circumstances as they now
exist.
In our last meeting, I urged this group to solicit from the
multinationals and the generic companies their capacity to provide
the raw material for the finished products. I asked if the
multinationals, as is their right, had made the capital investments in
raw materials geared only to predictable western markets and
wondered if the high prices in Africa were related to this business
fact of life. We need to focus on this issue, it is the "eye of the
dragon" and it is one area where the multinationals and the generics
can cooperate.
There are, I am pleased to report, some good signs out where the
pandemic rages. The impact of the Global Fund is being realized. It
is not only providing much needed financing, but it is restoring
some hope where hope for assistance has all but vanished. The
perceived change in their procurement policies has been clarified
and as a result Malawi, as an example, reports that the use of the
generic alternative permits them to treat 50,000 patients rather
than the 25,000 they had planned to help.
I am aware of some efforts to dilute or sidetrack President Bush's
rather courageous acceptance of the generic alternative�and that is
how the $300 reference was editorially interpreted�courageous
because the multinationals were the largest contributors to the
recent campaign that resulted in his control of the Congress. If his
fifteen billion dollar contribution is realized and more than the one
billion allocated to the Global Fund this will further fuel the hope
that is now being ignited. It also will not hurt the reputation of my
country in the poor nations of the world.
Can I be so forward as to recommend that the NGOs represented
here congratulate President Bush on his initiative? Perhaps we can
also inform him, politely, that one of the major barriers to use of the
lower priced medicines is his own Trade Office.
I have learned here that the European Community has committed
enormous resources to help in Africa. We should look at ways that
the Global Fund can be included in that approach and how we
might be able to combine monies so that the multinationals and the
generics can have the guaranteed orders required for investment to
produce the raw materials required. As I have noted here before,
the manufacturing process is rather routine and can be expanded by
second shifts or other traditional methods of increasing production.
I do not want to harp on this, but the missing link is the
predictability needed for investment in the APIs. (We heard from
Glaxo today that predictability is essential for their corporate
decisions for the production of AIDS medicines).
Finally�I believe someone must *must* bring together the
multinationals and the generics�bring together the talented,
compassionate persons on both sides of the dispute 'the conflict'
so that we can spend our time solving problems rather than
creating them. If NATO can wiggle its way into helping the Turks
without alienating France, then we should be able to find a way to
work together. As Dr. Hamied has said, the need is so great, that
there is room for all of us.
Thanks for listening.
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040