E-drug: Letter MSF to BMS
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[Warning: long message. BS]
Please find bellow a letter sent by MSF to BMS, in the framework of
negotiations taking place on reduced prices for AIDS drugs to be used
in our projects in Guatemala.
MSF's concerns about BMS' price and formulation of the offer, the
terms and conditions of the proposed Memorandum of Understanding and
BMS's pricing policy for the Central American region and other low-
and middle-income countries are expressed in this document.
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February 8, 2002
Robert D. Lefebvre, Senior Director
Project ACCESS, Worldwide Medicines Group
Bristol-Myers Squibb Company
P.O. Box 4000
Princeton, NJ 08543
Dear Bob,
We are writing on behalf of Doctors Without Borders/M�decins Sans
Fronti�res (MSF) to address our concerns about recent conversations
with Bristol-Myers Squibb (BMS) about a reduced price on
Zerit�/stavudine (d4T) and Videx�/didanosine (ddI), which we have
requested for our HIV/AIDS programs in Guatemala. This program
includes, but is not limited to, the provision of antiretroviral
therapy for a co-hort of approximately 100 patients in the Infectious
Disease Clinic of Roosevelt Hospital and the Luis Angel Garc�a Clinic
of the San Juan de Dios General Hospital in Guatemala City (since our
initial communication we have started to treat approximately 30
additional patients). Our main concerns fall into three general
categories:
1. The price and formulation of the offer;
2. The specific terms and conditions of the proposed Memorandum of
Understanding (MoU) drafted by BMS and provided to MSF to sign; and
3. BMS's pricing policy for the Central American region and for other
low- and middle-income countries outside of sub-Saharan Africa.
PRICE AND FORMULATION OF OFFER
As you know from several e-mail communications and phone conversations
during the months of December 2001 and January 2002, we are
disappointed that BMS has effectively offered MSF a per patient per
day price for d4T and ddI of $2, since Bob Laverty had previously
explained to Daniel Berman that, outside of sub-Saharan Africa, the
reduced price for both drugs for developing countries would be $1.60
per patient per day. (Please note that we interpret the $2 price to
break down as follows: .30 cents for d4T and $1.70 for ddI, based on
the prices you offer in sub-Saharan Africa of .15 cents for d4T and
.85 cents for ddI.) We would still like to negotiate on this offer to
find a mutually agreeable price, and we are still hopeful that that
price will be no more than $1.60 per patient per day (.24 cents for
d4T and $1.36 for ddI).
But perhaps more importantly, and as you know from our communication
of January 23, 2002, we are baffled at BMS's insistence that the
company "give" MSF the medicines we have asked to purchase for our
HIV/AIDS programs in Guatemala as a donation, but charge an
"administration fee" of $20 per bottle-which amounts to the $2 per
patient per day price for d4T and ddI. It seems to us a totally
unnecessary contortion for what should be a straightforward business
transaction. We realize that you "fail to see how an internal decision
by BMS to package the offer the way we did should be of any concern to
MSF," and hope that this letter serves to explain a bit more clearly
why, as a matter of principle, we view this formulation and the
additional terms and conditions of the proposed MoU as problematic.
SPECIFIC TERMS AND CONDITIONS OF DRAFT MEMORANDUM OF UNDERSTANDING
"Administration fee"
MSF is asking BMS to engage in a commercial transaction for
differentially priced drugs. The structure of this offer does not
appear to be typical of drug donation programs, but there are
similarities, which are cause for concern. In principle, we do not
believe that drug donations should be relied-upon as a long-term
solution to the lack of access to medicines in developing countries.
We have found through direct experience and analysis that drug
donation programs can have hidden costs and drawbacks, including:
burdensome restrictions on recipients; extra administrative work; and
costs to the public sector related to tax deductions that far exceed
other options. Since any agreement between BMS and MSF will involve
the potential purchase of drugs by MSF, there is no reason to
characterize the interaction as anything else.
Definition of the project
Article 1.6 of the proposed MoU includes a definition of the "Project"
as "the Initiative to improve access to Videx� and Zerit�." In fact,
the purpose of the MSF project in Guatemala is to reduce HIV-related
morbidity and mortality among a co-hort of clinically eligible
patients through the provision of antiretroviral therapy, including,
in some cases d4T and ddI; to improve the quality of life of our
patients; and to demonstrate that antiretroviral treatment is feasible
in resource-limited settings. Similarly, the proposed MoU assumes
that this project will be implemented as part of the "Accelerating
Access to HIV/AIDS Prevention, Care and Treatment Initiative." MSF is
not implementing the "Accelerating Access Initiative"; we are
implementing our pilot HIV/AIDS treatment programs in Guatemala.
Evaluation, monitoring, and reporting
We understand that BMS has the right, and in some cases the duty, to
demand that purchasers of its drugs work within the legal framework of
host countries, as well as meet international and/or U.S. reporting
obligations. We agree that it is appropriate to expect providers to
send project descriptions or routine reports indicating the number of
patients treated and stock balance as a matter of courtesy, and we are
happy to do this to ensure transparency. However, further evaluation
of the design and implementation of the project in terms of medical
criteria, patient tracking systems (including record maintenance and
data collection), etc. as defined in Article 9 of the proposed MoU,
should not, in our opinion, be undertaken by a pharmaceutical
manufacturing company, and should not be a condition for receipt of
medicines.
The evaluation, and, if necessary, regulation of health projects is a
matter for national health authorities. As you are aware, MSF's
projects in Guatemala have been given full approval by the government
of Guatemala. Similarly, our warehousing and managing procedures are
in compliance with local authorities' requirements, as well as our own
protocols. In this specific case, moreover, the products will actually
be stored in a secure location in the public hospitals in which MSF
operates the projects. We cannot understand why BMS would need to
inspect our storage facilities separately, as suggested in Article 7.
We believe that the only condition that companies should be able to
impose in terms of monitoring the project is, in light of the specific
nature of the pricing of the drugs, an agreement on non-diversion of
drugs to third parties, as suggested in Article 10.2.
Intellectual property rights
We agree in principle with BMS's statement in the Preamble (section
vi) that "intellectual property rights protection [must be] in
compliance with international agreements." Nonetheless, we feel
Article 9.5 of the proposed MoU may go too far regarding the
obligations of the provider when it states that "PROVIDER will not do
or omit to do anything by which the validity, goodwill and reputation
associated with the Intellectual Property Rights might be diminished
or jeopardized." In addition, we are not aware that either d4T or ddI
is patent-protected in Guatemala and consequently we cannot agree with
the passage in Article 9.5, which states that "PROVIDER acknowledges
that BMS is the owner of or has the right to use the trademarks,
patents, designs and copyright, used in relation to, or appearing upon
Access Products."
Next steps
We are confident that you will be satisfied with a revised MoU, which
we will provide you next week, that gives assurances about
non-diversion and routine reporting, among other issues that we find
acceptable in light of the price you are offering for our programs in
Guatemala. Of course, in addition to a MoU to address these
exceptional issues, when each order is placed in Guatemala, as per our
standard operating procedures for procurement, we would provide
locally a standard supply agreement indicating terms such as:
requirements for products' approval in the country, shelf-life,
labeling, packaging, and delivery. Similarly, we expect BMS to comply
with Good Distribution Practices when supplying the products. We see
no reason for a MoU that sets forth any additional terms or
conditions.
MSF's first obligation is to our patients. But as you know, we are
deeply concerned that other individuals, NGOs, and national
governments-who also desperately need access to the medicines you
produce-are denied access in large part because of the high prices BMS
is charging for its drugs and/or because of a lack of clarity about
what prices the company is actually charging. Other potential
purchasers outside of Africa, whether NGOs or national governments,
need to know what price BMS is offering, as many other proprietary and
generic companies have made clear. For this reason, we believe BMS
must change its current pricing strategy for low- and middle-income
countries outside of Africa.
BMS'S PRICING POLICY FOR THE CENTRAL AMERICAN REGION AND FOR OTHER
LOW- AND MIDDLE-INCOME COUNTRIES OUTSIDE OF SUB-SAHARAN AFRICA
BMS's stated pricing policy for d4T and ddI is as follows:
"TRANSPARENT PRICING -- The prices of products offered under the
ACCESS program will be fully public. Under this program, the company's
medicines to treat HIV/AIDS -- the nucleoside reverse transcriptase
inhibitors Videx and Zerit -- will be available in every country in
Africa that wishes to participate at a price of one dollar per day --
15 cents per day for Zerit and 85 cents per day for Videx. These
prices are below cost.
"Outside Africa, we will maintain our existing ACCESS pricing program
and address the subject on a country-by-country basis."
MSF's experience in the field attempting to access patent-protected
AIDS medicines at reduced prices from proprietary companies for our
AIDS projects in developing countries-and working with national
governments and other NGOs to access differentially priced proprietary
drugs-has led us to the conclusion that, as a rule, negotiating with
companies on a drug-by-drug, company-by-company, country-by-country
basis is laborious, time-consuming, and often leads to unacceptable
constraints and conditions, which have the effect of creating an extra
administration and workload, not just simply wasting time, energy, and
money.
We therefore challenge BMS to change its current strategy. We urge
BMS to issue a public communication that gives a clearly articulated,
transparent pricing policy stating actual price levels for Central
American and other low- and middle-income countries outside of Africa.
We believe this would facilitate wider access to medicines in those
countries.
MSF believes that BMS's current policy for low- and middle-income
countries outside of Africa is unacceptable. What it means in practice
is simply that the people who need access to d4T and ddI are not
getting it. It constitutes a significant barrier to increasing access
for individuals with HIV/AIDS in developing countries outside of
sub-Saharan Africa. There is ample anecdotal evidence of this beyond
our own three-month interaction with BMS trying to access needed
medicines at reduced prices in Guatemala.
CONCLUSION
As stated in previous communications, we are confident that we can
reach a mutually acceptable agreement with BMS allowing us access to
your AIDS medicines as needed for our projects, and are hopeful that
you will respond quickly and favorably to our request that you change
your pricing policy for low- and middle-income countries outside of
Africa. Please feel free to contact Rachel Cohen at (212) 655-3762 or
rachel_cohen@newyork.msf.org or Daniel Berman at (33 1) 4021-2764 or
daniel_berman@geneva.msf.org with any questions or concerns you may
have. Again, we will provide you with a revised MoU next week, and
look forward to a response from BMS at your earliest possible
convenience.
Sincerely,
Daniel Berman
Manager, MSF Access to Essential Medicines Campaign
Carmen Perez-Casas,
Chief Pharmacist, MSF Access to Essential Medicines Campaign
Rachel M. Cohen
U.S. Advocacy Liaison, MSF Access to Essential Medicines Campaign
daniel_berman@geneva.msf.org
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