E-DRUG: HIV Generics: Ready for a Revolution?
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[This article has been reprinted from the amfAR Global Link at
www.amfar.org/GlobalLink. Copied as fair use. WB]
HIV Generics: Ready for a Revolution?
by Anne-christine d�Adesky
In August 2003, South Africa�s largest generic drug manufacturer, Aspen
Pharmacare, announced a plan to produce a generic combination of three HIV
drugs that will sell for under a dollar a day per person. Aspen launched the
first generic antiretroviral drug made in Africa, Aspen-Stavudine, earlier
in the month. The drug is produced under an exclusive voluntary license from
Bristol-Myers Squibb, which markets stavudine (d4T) as Zerit. With similar
licenses from GlaxoSmithKline and Boehringer Ingelheim, Aspen submitted
applications to the country�s Medicines Control Council for approval of its
generic versions of zidovudine (AZT), lamivudine (3TC), Combivir (AZT/3TC),
didanosine (ddI), and nevirapine.
The news comes on the heels of an historic August 8 decision by President
Thabo Mbeki�s administration�long opposed to the use of antiretrovirals�to
develop a national HIV treatment plan by October in the country with the
worst AIDS epidemic in the world. South Africa has nearly 5 million
HIV-positive citizens, but only a small fraction currently has access to HIV
treatment. At least 600,000 need antiretrovirals immediately. A government
Health and Treasury task force outlined a menu of options for rolling out
treatment through the public sector, analyzing drug costs balanced against
extended survival. Providing antiretrovirals to 20% of people in need would
result in treating 200,000 people by 2008. Full coverage for all AIDS cases
would result in 1.2 million people receiving antiretrovirals within five
years.
This pivotal event reflects a major victory for AIDS activists from South
Africa�s Treatment Action Campaign (TAC), who have long advocated for use of
generics in their campaign for HIV treatment. In one of the opening salvos
of the drug access battle, TAC members illegally imported generic
fluconazole from Thailand in 2000 to treat opportunistic infections. TAC
recently upped the ante by allying itself with frontline physicians to
create the Generic Antiretroviral Procurement Project (GARPP), a private
company that will act as a wholesale procurer of quality generics. GARPP�s
launch is a symbol of pent-up frustration over the continued delays in
antiretroviral access�a sentiment shared throughout much of the developing
world. A combination of politics, limited funds, and unresolved patent
issues has largely kept antiretrovirals out of the developing world so far.
If South Africa is a microcosm of the global struggle for access to HIV
drugs, things are about to change dramatically�and generic antiretrovirals
are paving the way.
Generic Antiretrovirals at Last?
Spying a market, Aspen said it hopes the government, UNAIDS, and the Global
Fund to Fight AIDS, Tuberculosis and Malaria will be major customers for its
new products. Aspen follows the lead of Cipla, the maverick Indian generic
manufacturer that sparked a revolution in the debate about HIV treatment
access for the developing world. In 2001, Cipla offered to sell its
three-drug combination to the nonprofit medical relief group M�decins Sans
Fronti�res for $350 a year, and to governments for $600. These prices beat
even the highly publicized discount programs on brand-name antiretrovirals
offered by the big pharmaceutical companies through the United Nations�
Accelerated Access Initiative. Suddenly HIV treatment in resource-poor
settings�all but inconceivable at US prices in excess of $10,000 a
year�became a real possibility and fueled demands for antiretroviral access
around the world. The World Health Organization (WHO) has declared that by
the end of the year, it will release a plan to scale up antiretroviral
treatment to reach 3 million people by 2005.
Widespread publicity over Cipla�s move set off a race among several Indian
companies to make drugs for what they assumed would be a quickly growing
global market. Within months, a number of other private Indian companies
like Ranbaxy, Hetero, and Aurobindo were competing for sales in the nascent
global and domestic markets (see June/July 2002 issue of the Treatment
Insider, �India�s Generics Play a High-Stakes Game�). Meanwhile countries
like Brazil, Cuba, and Thailand have been importing raw materials from
Indian companies and manufacturing their own generic antiretrovirals through
the public sector. Brazil provides universal access to HIV therapy through a
combination of state production of generics and aggressive negotiation
tactics with patent holders for steep discounts on brand-name drugs (see
October 2003 issue of the Treatment Insider, �Brazil�s AIDS Model: A Global
Blueprint?�). Officials there recently warned Abbott, Roche, and Merck that
Brazil would override their patents on lopinavir, nelfinavir, and efavirenz
if it could not obtain lower prices.
For big pharma, the pressure is on. In an historic first, generic
antiretroviral producers beat out brand-name companies in open bidding by
nine Andean countries and Mexico that established a maximum price for HIV
drugs. �The Andean agreement is a breakthrough because it sets a worldwide
reference price for antiretrovirals that is based on a generic price,�
explained Bill Haddad, CEO of Biogenerics, a US generic drug producer that
represents Cipla. Negotiators estimate that savings will allow them to treat
another 150,000 people.
Some countries in Africa and Asia have also begun using generic
antiretrovirals. With a centralized procurement system, Cameroon treats
7,000 people by importing a generic combination costing under $300 a year
per patient. Thailand treats over 10,000 people at similar prices with
generic antiretrovirals produced by the state. Despite these successes, out
of the estimated 6 million people in the developing world who require
treatment, only about 300,000 were on therapy by the beginning of 2003.
Brazil alone accounts for almost half of this number. Two years after Cipla�
s groundbreaking move, company officials complain that their cheap,
high-quality AIDS drugs are sitting inside warehouses in India, while across
Asia, Africa, and other poor regions, 8,000 people a day die due to a lack
to affordable medicine. Instead of a revolution, there has been a stalemate.
The Patent Wars
Why have so few generic drugs reached people with AIDS in Africa and
elsewhere? What prevents governments from acquiring or making generics?
Funding still remains an obstacle; even current generic prices vastly exceed
what most countries can afford without the assistance of international
donors. Yet financial support for HIV treatment has been growing in recent
years through sources such as the Global Fund and the Bush administration�s
$15 billion global AIDS initiative, half of which has been earmarked for
treatment.
But money is only half the story. The legal status of generic antiretroviral
production and export has been at the forefront of recent battles over
global trade policy. The World Trade Organization (WTO) Agreement on
Trade-Related Aspects of Intellectual Property (TRIPS) reconciles disparate
laws governing each WTO member country, bringing patent, trademark, and
copyright protections up to US standards. Under TRIPS, pharmaceutical
companies will enjoy a minimum 20-year monopoly for patents on their
brand-name drugs, allowing them to block the entry of generic competitors.
WTO member countries must change their [quote]intellectual property laws to
conform to TRIPS by 2005.
The consolidation of international patent laws will erase the legal
loopholes that enabled the production of generic antiretrovirals without
breaking patents. Under Indian law, it is legal to copy a patented drug as
long as a different process is used to make it. Indian patent laws do not
recognize patents on products�the drugs themselves�but rather patents on
manufacturing processes. In Brazil�s case, patents do not cover the generics
manufactured by the state. Thailand only instituted a patent law covering
drugs in 1992, so drugs discovered earlier could be manufactured as
generics. In 2005, these countries must bring their intellectual property
laws into alignment with TRIPS or face trade sanctions.
A WTO ruling adopted in 2001, known as the Doha declaration, exempts the
least-developed countries from adopting TRIPS provisions related to
pharmaceuticals until 2016. Doha also states that all countries can and
should implement WTO patent rules in a manner that puts public health before
the commercial interests of patent holders. In practice, this allows
countries to override drug patents under certain circumstances through
compulsory licensing. By issuing a compulsory license, governments suspend
the monopoly rights of patent holders by licensing medicine production to
multiple suppliers, driving prices down. This opens the door to public and
private generic manufacturing and ultimately, lower prices. But compulsory
licensing is only permitted with medicines �predominantly� for domestic
consumption and not for export markets. This creates a catch-22 situation:
if producer countries like India, Brazil, and Thailand cannot export
generics, poorer and smaller countries without domestic generic industries
will have no sources for drug imports.
TRIPS would require these countries to acquire the capacity to make the
drugs domestically�an unrealistic hurdle for many. Drug manufacturing is a
complex business that calls for purchasing materials, processing,
production, packaging, quality control, release of drugs, storage and
related controls. In a recent review of the prospects for establishing local
production of drugs in developing countries, Warren Kaplan and colleagues at
the Boston University School of Public Health found that African economies
could not support generic industries efficient enough to compete with
multinationals on price. Other developing countries, like the Philippines,
have the manufacturing capacity in place, but their HIV rates are too low to
justify producing generic antiretrovirals solely for the domestic market.
These countries will only have affordable HIV treatment if allowed to import
generics.
�An Unmitigated Disaster�
Paragraph 6 of the Doha Declaration recognized this contradiction, and
called for resolution of the issue by the end of 2002�a deadline long since
passed due to hard-line US stances during negotiations. The WTO may resolve
these issues at the September Ministerial Conference in Canc�n, Mexico. The
Bush administration recently hinted at a willingness to compromise on draft
language in the Motta text, an accord that attempts to clarify the paragraph
6 contradiction. The US dropped its demand to limit the scope of diseases
that would permit activation of a paragraph 6 solution, a major sticking
point in prior talks. By late August, US trade officials had tentatively
laid out four conditions for a revision of the Motta text, according to Asia
Russell of Health GAP Coalition, a close WTO watcher. The first is that only
public generic suppliers could provide drugs designated for �humanitarian�
purposes. That would freeze out private companies like Cipla. The second
condition requires a clause enabling countries to �opt out� of exercising
their right to import generics. According to Russell, the �opt out�
provision would allow the US to pressure countries to agree not to issue
compulsory licenses for imports. The third US condition is a review
mechanism or �audit� of how the paragraph 6 solution would be used. The
fourth is the request for an �explicit statement� that distinguishes
generically produced medicine through special packaging. This would help
prevent reimportation of cheap generics into wealthy countries, where they
might be resold and undercut sales of their brand-name equivalents.
The WTO debate has been pitched, with little consensus�and few are willing
to predict the outcome. Activists view the proposed draft text for resolving
paragraph 6 "an unmitigated disaster" and have called on developing
countries to block its adoption. "It is a recipe to severely restrict
efforts of developing countries to access medicines and protect the public
health," said Spring Gombe, Global Access Liaison to Health Action
International and other non-governmental organizations. "This is a call to
action."
Looking ahead, there are two potential scenarios: if the WTO agrees to a
pro-generics revision, countries could issue a compulsory license to obtain
generic AIDS drugs imported from producer countries, regardless of their
ability to make the drugs themselves or the status of drug patents. Even
then, feels Russell, there would be many hoops to jump through as
articulated in the Motta text. But if no solution is reached, then countries
could still legally use compulsory licensing or parallel importing to get or
make some older generic drugs, as long as they have the political will and
muscle to confront the US.
The US has consistently and aggressively defended the interests of big
pharma, and activists say that many countries have held back from
introducing generic antiretrovirals due to fear of US reprisal. Both the US
and big pharma have tried to block countries from taking measures legal
under TRIPS that would facilitate access to generic HIV drugs. In 1998 South
Africa faced a protracted lawsuit by 40 major pharmaceutical companies
seeking to block the new Medicines Act that governed pricing and promoted
access to drugs. Big pharma eventually dropped the lawsuit in the face of
global pressure, with TAC playing a pivotal role in mobilizing outrage. In
2000 the US filed a WTO complaint against Brazil, later dropped but widely
perceived as an attack on Brazil�s high-profile antiretroviral strategy.
Also in 2000, GlaxoSmithKline issued legal threats over the importation of
Cipla�s generic version of Combivir in Ghana. The United Nations Development
Programme�s Human Development Report, issued in 2001, concluded that
�pressure from Europe and the United States makes many developing countries
fear that they will lose foreign direct investment if they legislate for or
use compulsory licenses.� According to Russell, �big pharma and the US
government continue to threaten access to cheap medicines, collaborating to
oppose entry for India, Brazil, Thailand, China, and other supplying
countries to developing country markets after 2005, when TRIPS rules come
into full effect.� In the meantime, the unresolved paragraph 6 paradox makes
it difficult for countries to plan on long-term access to generic
antiretrovirals.
Beyond Canc�n, there�s the looming 2005 WTO deadline, when member countries
must adhere to TRIPS rules upholding patents. The least-developed countries
have until 2016 to do this. In two years, Brazil, India, and Thailand will
no longer be able to make generics for new drugs as they can now. Finally,
there is the proposed Free Trade Area of the Americas�a successor to the
North American Free Trade Agreement. The next round of talks takes place in
November in Miami, aimed at establishing a 34-country �free trade block� by
2005. �The US wants to export US-style patent protection, which exceed
levels of protection guaranteed under TRIPS,� said Russell. �If the US gets
its way, there would be an extension of patent terms past 20 years. There
would be a five-year block on any country doing a compulsory license once a
patent gets filed. So it has the potential to dramatically limit access to
medicines in to the future.� Her take on the FTAA: �It�s one more bit of
evidence that the US is giving with one hand and taking with the other�we
can see now that the promise the US made at Doha was a lie.�
WHO Wants Generic Antiretrovirals?
Regardless of the outcome of the trade talks, the momentum is squarely
behind scaling up antiretroviral therapy as more governments commit to HIV
treatment plans. WHO is developing several strategies to support the scale
up. High on WHO�s list is a pooled procurement system for antiretrovirals
intended to streamline purchasing and distribution, reduce drug costs, and
assure quality (see �Learning from Tuberculosis� in this issue of the
Treatment Insider). WHO is also offering technical expertise and other �best
practice� resources to help countries develop their capacity to buy,
deliver, and make drugs. According to WHO advisor Jim Yong Kim, they aim �to
ensure that access to drugs is not an obstacle in reaching the target of 3
million in treatment by 2005.�
WHO has also played an important role in legitimating generic
antiretrovirals by vouching for their quality after intensive assessment.
National regulatory bodies like South Africa�s Medicines Control Council
oversee generic products for domestic use, but local standards vary and many
countries lack the resources for quality assurance. That�s why WHO has
become an independent global arbiter of drug quality and �good manufacturing
practices.� Generic antiretrovirals from four companies�India�s Cipla,
Hetero, and Ranbaxy and Spain�s Combino Pharm�have gotten the WHO seal of
approval, landing on its list of prequalified suppliers. For now, generic
antiretroviral manufacturing is growing more rapidly in the private sector
than the public. Indian and Latin American companies lead the industry for
pills, while China and Korea are well poised to supply raw materials for the
drugs. State production of generic antiretrovirals has been slower to take
off, but there are signs of movement. Brazil is giving $100,000 technology
transfer grants to 10 countries�five in Africa, five in Latin America�to
help develop local generics industries for AIDS drugs. The Thai state
producer, GPO, is giving technical help to Ghana, Zimbabwe, and Zambia to
set up pilot manufacturing plants. Zambia hopes eventually to supply
antiretrovirals to 13 neighboring countries. Nigeria, with its large
manufacturing base and skilled population, is also moving forward.
Looking ahead, most countries will likely rely on a mix of brand-name and
quality generic drugs to scale up treatment, based on availability and
price. Even the US displays a new pragmatism towards generic
antiretrovirals, with administration spokespersons indicating that global
AIDS funds for treatment would not be restricted to brand-name HIV drugs.
The guidelines of the Global Fund�now chaired by Tommy Thompson, US
Secretary of Health and Human Services�do not directly endorse generic
antiretrovirals, but encourage procurement of quality drugs at the lowest
prices. With more competition, prices will fall, while pooled procurement
plans could lower costs more. Some see 50-cent-a-day combination therapies
in the near future. �It�s clear that generics have completely changed the
equation,� said Joep Lange, outgoing president of the International AIDS
Society and a key force behind the WHO�s scale-up plans. �If it weren�t for
Cipla and other Indian companies, we wouldn�t be talking today about the
possibility of treating millions of people. In the end it doesn�t matter
whether the drug is a generic or brand name; what matters is that the drug
works and is affordable.�
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Access Essential Drugs Monitor #32 at http://www.who.int/medicines/mon/mon32.shtml
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