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Date: Mon, 23 Oct 2000 10:11:44 -0500
From: APIC <[log in to unmask]>
To: [log in to unmask]
Subject: Africa: AIDS Drug Pricing
Africa: AIDS Drug Pricing
Date distributed (ymd): 001023
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+
Summary Contents:
This posting contains a speech on HIV/AIDS drugs, stressing the
huge reductions in pricing necessary to make such treatment
accessible in developing countries. Speaking at a Roundtable in
Geneva this summer, Bernard Hirschel, who chaired the 12th World
AIDS Conference in Geneva in 1998, argued that such drugs must
become hundreds to thousands of times cheaper a possibility
because drug manufacturing costs often represent 1% or less of the
price, Hirschel notes that although prevention is more "cost-
effective", the treatment issue will not go away. He concludes
that "only differential pricing by current manufacturers or through
parallel licensing can produce orders-of-magnitude reductions in
drug prices."
For earlier postings and links on this issue, with documents from
ACT-UP, Treatment Access Compaign, Medecins sans Frontieres, and
others, see:
http://www.africapolicy.org/docs00/drug0010.htm
http://www.africapolicy.org/docs00/drug0007.htm
and
http://www.africapolicy.org/action/health.htm
For current news on AIDS in Africa, see
http://allafrica.com/aids
October 20 story on Treatment Action Campaign's import into South
Africa of generic Biozole from Thailand in violation of Pfizer's
patent on Fluconazole, as part of its 'defiance campaign against
patent abuse and AIDS profiteering.'
http://allafrica.com/stories/printable/200010200316.html
+++++++++++++++++end profile++++++++++++++++++++++++++++++
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HAART (highly active antiretroviral therapy*) - How Large is the
Gap?
by Bernard Hirschel
(*): The Roundtable on Comprehensive HIV/AIDS Treatment Access
Consensus was held in Geneva on June 19th and 20th. The Roundtable
began with Prof. Bernard Hirschel, President of the 12th World AIDS
Conference - "Bridging the Gap", introducing the worldwide
treatment access problems, specifically the treatment gap between
the North and the South. Participants included the five
pharmaceutical manufacturers involved in the announcement (Merck,
Hoffman-La Roche, Boehringer, Glaxo Wellcome, Bristol Meyer
Squibb), UN agencies (UNAIDS, WHO, WIPO, WTO), African (Cote d
Ivoire, Namibia, Uganda and South Africa) and Brazilian government
representatives, national and international NGOs, and the private
sector.
These remarks were first posted on [log in to unmask] then
re-posted on [log in to unmask] and breaking-the-
[log in to unmask] [APIC note: as of this posting, the archives
at http://www.hivnet.ch seem not to be being updated. However, an
extensive discussion on these issues is available at the e- drugs
discussion archive at http://www.healthnet.org/programs/e-
drug-hma]
Two years ago the 12th World Aids Conference took place in Geneva.
Its logo contained a rainbow of hope and the slogan "Bridging the
Gap," expressing the best of intentions. But today the gap between
rich and poor, n relation to access to highly active antiretroviral
therapy, yawns as wide as it did in 1998.
How Large is the Gap? (Table 1)
Country CH Ivory Coast UG Z'bwe
Pop. (Millions) 7 14 21 12
HIV+ (1000s) 12 700 930 1500
HAART for all
(in Billions) 0.14 8.4 11.2 18
Percent of GNP 0.06 84 172 265
Sources: World Bank, UNAIDS. Costs of HAART 12000 US$/year
Table 1 shows the population of Switzerland, Ivory Coast, Uganda
and Zimbabwe (in millions), the number of HIV-positives (in
thousands) and the gross national products (in billions of US
dollars [3rd line of table missing in original]). The theoretical
costs of HAART for all HIV-infected at 12,000 dollars per person
per year is on the fourth line, and the fifth line lists the cost
of HAART for all as a percentage of GNP, ranging from 0.06 in
Switzerland to an unbelievable 265% in Zimbabwe.
How cheap would HAART have to become for the gap to close ? For
Zimbabwe to treat all the HIV positives and use for this the
percentage of GNP Switzerland uses : about 5000 times cheaper. For
Zimbabwe to treat all their HIV positives and increase the
percentage of GNP used for this in proportion to the HIV
prevalence: about 70 times cheaper. But note that this is an
unrealistic proposition because it would mean that Zimbabwe spend
4.4% of its GNP only on HAART, about 50 percent of the total health
expenditure.
In conclusion, for HAART to become an option for the hardest hit
countries in Africa, it must become hundreds to thousands of times
cheaper. In view of these brutal facts, should we give up promoting
access to HAART in LDCs? All studies show that prevention is much
more cost effective than treatment. "For the health ministry of a
developing country, HAART is a diversion from more pressing needs
and a threat to more cost-effective programs to combat HIV, such as
the targeted distribution of condoms"(**). However, whatever we may
think about priorities, the access issue will always push its way
into the fore ground of political discussions. There are two main
reasons for this. First of all, the sick cry out for help, whereas
the healthy don't cry out for condoms...
In addition, there is an Aids-specific issue: the position of the
African elites concerning Aids. Consider that 2 million people have
died of Aids in Uganda alone, more than 300 persons a day, every
day, from 1985 to 2000. Prevalence of HIV is such that all
politicians in sub-Saharan countries must have relatives and
friends who have HIV; some are infected themselves. Presumably,
they themselves will want to take HAART... If they prioritize
prevention to the exclusion of treatment they are in an impossible
personal political and moral situation. For all these reasons,
efforts to avoid or deflect the access issue are doomed.
Let us now turn to the economics of pharmaceuticals. The essentials
are easily grasped. Drugs are expensive to develop because drug
discovery, safety testing, trials, registration, marketing, and
distribution are all expensive. However, drugs are cheap to
produce. Marginal production costs often are below 1% of the sales
price. And essentially all income from sales of drugs is generated
in the "North".
If we think about ways of providing cheaper drugs to LDCs, we may
first consider savings from shaving profits, from bulk buying, from
more efficient distribution, from increased competition and
increased production volume. Such savings may, if circumstances are
favorable, reach 50 to 75%. However, this is far short of the
orders-of-magnitude savings that would be needed to Bridge the Gap.
Such savings can only come from differential pricing, with prices
reflecting total costs in the North and marginal costs in the
South.
There are advantages to differential pricing and production of
drugs by established manufactures, such as efficient production
facilities, quality control and distribution networks which are all
already in place. It is also, if not a win-win so at least a
win-not lose situation where the "South" gets cheaper drugs, the
"North" sees no change and the drug companies get a return on their
investment. Precedents exist, notably vaccines, where costs in the
North are typically hundreds of times higher than those paid for
vaccination in LDCs.
However, price is not all. There are many other obstacles to HAART
in less developed countries. HAART has been developed without
regard to cost-effectiveness and simplicity, let alone the special
costraints of less developed countries such as lack of
refrigeration. HAART carries the image of a complicated treatment
with many side-effects and necessitating sophisticated laboratory
surveillance, as shown in a poster published last year by the Swiss
Federal Office of Public Health, representing the 213 pills that an
HIV positive patient was supposed to ingest in a week.
However, this is already the past. Marketed regimens provide HAART
with only 4 and soon with only 2 pills a day; once daily regimens
are within reach. This opens possibilities that have proven their
worth for other infectious diseases, such as swallowing under
supervision (directly observed therapy).
Even cheaper HAART will have to be used in a cost-effective manner.
Cost-effectiveness has not either been a priority in Aids research.
For instance, all calculations of costs are based on an indefinite
duration of treatment, but is this really necessary?
A typical patient with HIV will lose 60 to 70 CD4 cells/mL/year
without treatment. With HAART, he will typically gain 150 to 200
CD4 cells in a year. That is plenty to keep him or her out of
trouble, i.e. to essentially eliminate all danger of opportunistic
infection. If treatment was stopped after a year what would happen?
A reasonable assumption is that CD4 cells would start to fall again
at their previous rate which would suggest that maybe you could
treat one year in two or three without risk of intervening
opportunistic disease. These are theoretical calculations; nobody
has tested them. If we envisage organizing a trial of cheaper
treatment we can foresee difficulties because the clinical trial
expertise is heavily concentrated in the North and there is no
trial "culture" at UNAIDS and WHO. There is reason for hope,
however, for instance the involvement of UNAIDS in the perinatal
infection trials, and the fact that drug-holidays are becoming a
subject of legitimate study in the North.
So, to conclude, only differential pricing by current manufacturers
or through parallel licensing can produce orders-of-magnitude
reductions in drug prices. Downstream from pricing, LDC-specific
obstacles to HAART, such as simplicity and cost-effectiveness, need
to be addressed.
What are the obstacles to progressing in that direction? At the
risk of offending everybody in this room, I will now describe these
obstacles as I see them:
* lack of a sense of urgency for industry,
* incompatible and partly hidden agendas for NGOs and UNAIDS and
other governmental organizations in the confusion about priorities.
Industry representatives must realize what kind of a ferocious
tiger they are riding. HAART has decreased mortality from HIV by
84% in Switzerland from 1992 to 1998. This relative fall of 84% is
greater than the 72% fall produced by penicillin in the treatment
of pneumoccocal septicemia between 1930 and 1965, and of course
occurred in a much shorter period of time. Now contrast this with
the fact that less than 5% of HIV infected people have currently
access to such treatment and that you can produce these drugs and
can produce them cheaply. You will then start to understand the
urgency and indeed the rage behind the clamor for access. It is an
exceptional and unprecedented situation and one which calls for
exceptional measures.
The problem that I see with the NGO's is one of mixed and hidden
agendas. This becomes clearer when one examines who participates in
electronic forums on treatment access and who lobbies and protests
at political gatherings. There are three types of organizations :
the Aids-related such as ActUp, the humanitarian such as Medecins
sans Frontieres, and finally the consumer activists such as the
Consumer project on technology (Nader, Love et al.). All these
groups have agendas in addition to "access". They are in general
moralistic, anti-capitalist and anti-multinational. And especially
the last groups, if you examine their websites and publications,
cite price differentials between nations mostly to put pressure on
prices at home. Of course, this will scare off drug companies that
consider differential pricing and I have written somewhere else
that with friends like these, less developed countries don't need
enemies. So here is a maxim to ponder for NGOs in the North :
Solidarity means accepting to pay more so others may pay less.
And finally UNAIDS and affiliated organizations : here is a quote
from an E-mail, written by a high official on UNAIDS, and
commenting on a draft of a paper for a medical journal, calling for
LDC-specific trials of HAART, and for applying the lessons learned
in treating TB to HIV: "I fear that using foreign currency for even
limited target groups that would receive HAART will decrease the
ability of developing countries to provide essential health
services to their population. I'm not ready to endorse the idea
that the trials proposed in the paper be done.... Consequently, I
need to request that my name be removed from the list of authors".
The quote is from January 2000 and the position was reaffirmed in
May. I started out by acknowledging the possible conflict between
prevention and treatment and have explained why the access issue
will not go away. It seems to me that UNAIDS needs to reaffirm its
leadership by acknowledging frankly that, yes, HAART is not the
solution for Aids nor is it a cost-effective way to fight HIV, but
that UNAIDS accepts a responsibility towards those who are already
infected, will further access to drug, and will try to insure that
what drugs are available are used in the most appropriate and
cost-effective way.
Professeur Bernard Hirschel
President of the 12th World AIDS Conference,
Geneva (Bridging the Gap)
Medecin adjoint, responsable de l'unite VIH/SIDA
Hospital universitaire de Geneve CH-1211 Geneve 14
Telephone ++ 41 22 372 98 12; FAX ++ 41 22 372 9820
Email: [log in to unmask]
(**) Sources : New England Journal of Medicine 1998 ;338 :906-908,
Confronting AIDS: public priorities in a global epidemic. World
Bank, 1997.
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