E-DRUG: MSF: Hong Kong - Second Wave of the Access Crisis
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The Second Wave of the Access Crisis: Unaffordable AIDS Drug Prices Again
A formatted version with graphs is available at:
http://www.doctorswithoutborders.org/news/hiv-aids/briefing_doc_12-10-2005.cfm
A few years after the historic fall in first-line AIDS drug prices from
over $10,000 to $175 per patient/year, people living with HIV/AIDS are
again facing the possibility that life-saving drugs will be priced out of
their reach. Doctors Without Borders/Médecins Sans Frontières (MSF) warns
that urgent action is needed to ensure a continuous supply of affordable
medicines to those who need them.
The Looming - second line - Problem: Since 2003, there has been a push to
offer antiretroviral treatment (ART) to people living with HIV/AIDS in
resource-poor settings. Today, the World Health Organization (WHO)
estimates that 1 million people are on ART in the developing world. But
these patients are facing a looming crisis. Experience from places where
ART has long been widely available, such as Brazil, the US or Europe, shows
that after a few years, the "first-line" of ART no longer works for many
patients, who must then switch onto a "second-line" regimen. However,
second-line drugs are far more expensive than first-line drugs. In Kenya,
for example, MSF pays $1400 per patient/year for a second-line regimen,
compared to only $200 for first-line drugs - that's a seven-fold price
difference. In middle-income developing countries that price difference can
be even more dramatic. In Guatemala, a second-line regimen costs $6500 –
28 times more than the first-line treatment.
What do these price differences mean?: For example, in Guatemala, providing
second-line drugs to 10% of all patients in the MSF program would increase
total drug spending by 360%. In South Africa, treating the 58 patients on
second-line drugs in the MSF program costs the same as treating over 550
patients who are still on first-line. Clearly, high prices for providing
just a few patients with second-line drugs can quickly outstrip a program's
or health facility's ability to pay. The number of patients requiring
second-line therapy is only expected to rise as people living with HIV/AIDS
will need access to newer treatment.
What does the WTO have to do with it?
Affordable and available ART became a reality because there were no
pharmaceutical patents in key producing countries, like India and Brazil.
But the WTO's patent rules are causing generic sources of new medicines to
dry up. In early 2005, the WTO's Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) was fully implemented in India and
other developing countries that had not yet granted pharmaceutical patents.
As a result, access to affordable new drugs is likely to become much more
difficult. From 2005 onwards, all new drugs are subject to at least 20
years of patent protection, except in least developed countries where
existing production capacity is limited. This widespread patent-protection
is already stifling generic competition, making much-needed second-line
ARVs nearly 30 times more expensive than the most affordable first-line
drugs.
Is voluntary differential pricing the answer?: To get access to newer drugs
that are still under monopoly, many programs rely on a system called
'voluntary differential pricing' from the large drug companies. In
principle, this means that developing countries can buy drugs at lower
prices than wealthy countries. But MSF's experience trying to access drugs
at these reduced prices has made clear that the system is seriously flawed
- it does not get medicines to all who need them. A survey conducted in MSF
projects in nine countries showed that when medicines are only available
from a single producer, they are still very expensive. For example,
GlaxoSmithKline's price for abacavir in the poorest countries is about $
890 per patient/year - this single drug costs four times more than the
three drugs of a first-line treatment combined.
Second, prices that pharmaceutical companies announce are often not available in reality,
because companies have not registered or marketed the drugs in countries
eligible for differential pricing. For instance, Gilead's tenofovir (brand
name Viread) is fully registered in only 6 Bahamas, Gambia, Kenya, Rwanda,
Uganda, Zambia. of the 95 countries where the company offers it for a
differential price. And third, some companies do not offer discounts to
middle-income countries – this is the case with lopinavir/ritonavir (brand
name Kaletra) in Thailand, Latin America and Ukraine, where programs pay
$4,000 to $6,000 per patient/year for this one drug alone. Didanosine E.C.,
a drug used in many second-line regimens, costs about $400 in Cameroon (a
median price in the survey), even though a WHO study recently found
production costs are about 1/4 of that ($94), including a 14% profit
margin. Clearly, there is room for prices to fall further if robust
generic competition were to take place.
What are the solutions?: In light of these new challenges, countries that
have the capacity to manufacture generic drugs (such as Brazil, Thailand,
India and China) need to routinely exercise their right to do so despite
patents. Safeguards like compulsory licenses and government use that were
affirmed in the 2001 WTO Doha Declaration enable the production of more
affordable medicines. However, to ensure access to medicines for all, an
easy and economically viable mechanism is needed for export of generic
medicines produced under a compulsory license. But the recent decision of
the WTO to amend the TRIPS Agreement, based on a mechanism that has failed
to prove it can increase access to medicines, shows that the WTO is
ignoring the day-to-day reality of drug production and procurement.
The so-called 'August 30th decision' which was designed in 2003 to allow
production and export of generic medicines, has long been viewed by MSF and
public health groups as overly cumbersome and inefficient. To date there
is no experience using the mechanism -not one patient has benefited from
its use - despite the fact that newer medicines, such as second-line AIDS
drugs, are priced out of reach of poor patients. Delaying the amendment
would have been a far better option, as it would have ensured the
possibility of testing and improving the mechanism in practice. The
amendment has made permanent a burdensome drug-by-drug, country-by-country
decision-making process, which does not take into account the fact that
economies of scale are needed to attract interest from manufacturers of
medicines. Without the pull of a viable market for generic pharmaceutical
products, manufacturers are not likely to want to take part in the
production-for-export system on a large scale. And without competition
among several manufacturers, MSF fears it will be extremely difficult to
ensure that prices of newer medicines will fall the way first generation
AIDS medicines did - patients the world over will have to pay the price.
MSF is therefore asking WTO Members to:
1. Re-affirm their political commitment to the Doha Declaration on TRIPS
and Public Health, issued at the 2001 WTO Ministerial, and fully implement
the declaration in national law and drug procurement policies.
2. Provide evidence by the end of 2006 demonstrating that the amendment
(August 30) to the TRIPS agreement can effectively meet global needs for
affordable generic medicines.
3. Assess the existing measures put in place by the WTO to facilitate
access to medicines, identify the barriers to full implementation of the
Doha Declaration, and propose robust and workable ways to eliminate the
negative effects that drug patents have on access to essential medicines.
For more information, see www.accessmed-msf.org, or contact:
Ellen 't Hoen: +33.62.2375.871 or +856-9173-7268 (at the WTO Ministerial
in Hong Kong)
Rachel M. Cohen or Kate Evans: 917.331.9077 (in the US)
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Rachel M. Cohen
U.S. Director, Campaign for Access to Essential Medicines
Doctors Without Borders/Medecins Sans Frontieres (MSF)
333 Seventh Avenue, 2nd Floor * New York, NY * 10001-5004 * USA
Tel: +1-212-655-3762
Mobile: +1-917-331-9077
Fax: +1-212-679-7016
E-mail: rachel.cohen@newyork.msf.org
http://www.doctorswithoutborders.org/
http://www.accessmed-msf.org/