TWN Info Service on Health Issues (December 06/03)

6 December 2006

WHO needs to get serious about high cost of new AIDS drugs

AIDS  treatment will not be sustainable unless international institutions get serious about the high cost of newer medicines. This warning comes from Medecins Sans Frontiers (MSF) the medical humanitarian organisation. MSF says that the WHO has failed to outline a strategy to help countries access these drugs which remain largely inaccessible in developing countries.

Thailand uses compulsory licence for cheaper AIDS drug

On a brighter note, Thailand has for the first time announced it will issue a compulsory licence for the domestic manufacture of a key AIDS drug. The following articles report on both these issues.

The first article is reproduced with the permission of South-North Development Monitor (SUNS) # 6153, 1 December 2006.

With best wishes
Evelyne Hong

Health: WHO needs to get serious about high cost of new AIDS drugs

By Kanaga Raja, Geneva, 30 November 2006

Five months after the World Health Organization (WHO) released updated AIDS treatment guidelines that recommend the use of newer and improved drugs in developing countries, the organization has failed to outline a strategy to help countries access these drugs, the international medical humanitarian agency Medecins Sans Frontieres (MSF) said Wednesday.

AIDS treatment in the developing world will not be sustainable unless international institutions get serious about the high cost of newer medicines, MSF warned.

MSF's warning has come just as World AIDS Day is being observed around the world on 1 December.

According to the 'AIDS Epidemic Update 2006', a joint UNAIDS/WHO report, a total of 39.5 million people were living with HIV in 2006 (2.6 million more than in 2004), and that the number of new infections rose to 4.3 million in 2006 (400,000 more than in 2004).

The UNAIDS/WHO report said that Sub-Saharan Africa remains the most affected region in the world - two-thirds of all people living with HIV (24.7 million in 2005) live in this region.

MSF said that new WHO-recommended drug regimens for patients starting treatment can be up to six times more expensive than today's most commonly used combinations.

In addition, due to drug resistance or side effects, people on anti-retroviral treatment eventually need to switch to newer drugs. In the case of resistance, people need to receive entirely new drug combinations, or face becoming sick again and dying. This ''second-line'' therapy can be up to 50 times more expensive.

''Our experience over the last year has told us two things. First, treatment costs are going to rise massively in the coming years unless something is done about high drug prices. Second, we cannot rely on pharmaceutical companies to solve this problem. We need drastic changes in strategy,'' said Dr. Tido von Schoen-Angerer, Director of MSF's Campaign for Access to Essential Medicines.

''It's clear as day that at current prices, the cost of accessing newer drugs will bankrupt treatment programmes, but governments, industry, and multilateral agencies are doing far too little to address the issue,'' he added.

MSF said that currently it provides anti-retroviral therapy to over 80,000 patients in 65 projects in more than 30 countries. Data from MSF's programme in South Africa, which is one of the organisation's longest-running treatment programmes, shows that 17.4% of people who have been on treatment for five years have had to switch to second-line therapy.

In Malawi, where MSF has 11,000 people on AIDS treatment, it is estimated that roughly 1,600 people will need to switch to newer drug combinations in three years, which will take up 70% of the entire treatment budget.

''AIDS treatment became a reality in the developing world because of the availability of affordable generic drugs,'' said Dr. von Schoen-Angerer. ''Treatment programmes will fail unless a continual supply of generic versions of newer medicines is also guaranteed.''

Generic competition since 2000 helped bring down prices of certain first-line AIDS drugs by 99%, from $10,000 to roughly $130 per patient per year.

Yet prices for newer drugs will remain high primarily due to increased patent barriers in key generic-producing countries like India. On top of cost, newer medicines often are not marketed in developing countries, said MSF.

''Many newer drugs are not even available where we work, because companies do not make a priority of registering them,'' said Dr. Moses Massaquoi of MSF in Malawi. ''It's simply unacceptable that we have to wait many years to use medicines that are commonly used in wealthy countries, if we get them at all.''

Tenofovir, one of the most commonly prescribed AIDS drugs in wealthy countries and one of the drugs recommended by WHO, was approved for use in the US in 2001, but Gilead, the manufacturer, has only registered it in roughly 15 of 97 developing countries that qualify for the company's reduced pricing.

According to MSF, Abbott launched an improved version of one of its anti-retrovirals - heat stable lopinavir/ritonavir - over a year ago in the US, but the drug is still not registered in a single developing country, even though the new formulation is much better adapted to tropical settings.

For most developing countries outside of Africa, such as Thailand and Guatemala, the company has announced a price of $2,200 per year, which is far more than the average annual income in those countries.

MSF said that a high-level meeting of WHO, UNAIDS and the World Bank which concluded on Wednesday in Washington DC failed to address the fact that pharmaceutical patents continue to drive the price of treatment up.

''Donor money should not be squandered to pay for overpriced drugs. The priority is to make drug prices come down as much as possible,'' said Dr. von Schoen-Angerer.

''International organizations, donors and industry must overhaul their strategies to ensure that universal access to AIDS treatment for life becomes a reality - this means confronting companies and their patents,'' he stressed.

Thailand uses compulsory licence for cheaper AIDS drug

By Chee Yoke Ling, TWN, 1 December 2006

Thailand’s Ministry of Public health announced on 29 November that the government has issued a 5-year compulsory licence for the domestic manufacture of a much cheaper generic AIDS drug.

Coming just before World AIDS Day on 1 December the move was a victory for people living with HIV/AIDS, health activists and governments trying to treat citizens in the face of astronomical drug prices.

This is the first time Thailand has used a legal tool allowed under patent law and enshrined in the World Trade Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). 

The antiretroviral drug, efavirenz, which is recommended by the World Health Organization (WHO) for HIV/AIDS treatment is commonly used and considered by doctors as one of the best components for first line therapy because it has less side effects and is more suitable for those co-infected with other diseases such as tuberculosis or liver infections. Although it has been in the market for many years, efavirenz remains very expensive around the world.

Originally developed by Dupont Pharma, the drug is now marketed by Bristol-Myers-Squibb.  Merck, another pharmaceutical giant, has marketing licence rights in a number of countries including Thailand and China.

According to The Nation, , “the so-called government compulsory licensing took effect immediately following [the] announcement and the Government Pharmaceutical Organisation (GPO) was expected to start mass production of a generic version of the drug in six months”.  In the meantime, imports of the generic drug from India under the same compulsory licence will start.  The cost of the drug for treatment will be USD 22 per month using the Indian generic version compared to the Merck price in Thailand which is USD 41 per month. The cost of the locally produced drug is expected to cost around half of Merck’s.

Payment equivalent to 0.5 per cent of the sales in Thailand for the generic version of efavirenz will be made to Merck.

Minister of Public Health Dr. Mongkol na Songkhla told The Nation, a daily national newspaper in Thailand that there were about 500,000 HIV-infected people who needed to use antiretroviral treatments yet only about 100,000 had access to the drugs because of the high prices - as well as insufficient budgets. "Of course, the company [patent holder/licensee] will do something to oppose this but we're doing everything according to not only the country's law, but also international law," said Mongkol.

Under the TRIPS Agreement, a compulsory licence can be issued to someone other than the patent holder to manufacture or import a product under patent.  When used by a government (or a contractor of the government) for public non-commercial use there is no need for prior negotiations with the patent holder. In this kind of compulsory licensing, commonly called “Government Use”, it is sufficient for the government to inform the patent holder, and to pay an “adequate remuneration”.

Compulsory licensing is an important legal tool to ensure access to affordable medicines and its importance and use were reaffirmed in the 2001 Doha Declaration on the TRIPS Agreement and Public Health. 

Thailand’s Patent Act 1999 in section 51 states that any ministry, bureau or department of the Government may, by themselves or through others, exercise the compulsory licensing right “in order to carry out any service for public consumption or which is of vital importance to the defense of the country or for the preservation or realization of natural resources or the environment or to prevent or relieve a severe shortage of food, drugs or other consumption items or for any other public service”. 

The Thai Network of People Living with HIV/AIDS (TNP+) and other HIV/AIDS activists hailed the Thai government’s decision. They have been at the forefront to advocate for the government to use the flexibilities in the TRIPS agreement.

In a march that ended at the Ministry of Public Health on Wednesday when the announcement was made, TNP+ in a press statement said, “This ground breaking decision sets an important precedent for the issuing of CL for other desperately needed but costly medication for other chronic diseases such as kidney disease and cancer”.

According to TNP+, the National Health Security Office formed a committee dedicated to investigating the possibility of issuing a compulsory license. “The compulsory licence will allow the Thai government to import a generic version of efavirenz from abroad until the GPO is able to produce its own generic version saving the Public Health System millions of baht a year,” the Network said.

"Thank you for the courage of the Public Health Ministry. It's remarkably brave," said Nimitr Tienudom, the manager of AIDS ACCESS Foundation, in a report of The Nation newspaper.

According to the international medical humanitarian organization, Médecins Sans Frontières (MSF), at least 12,000 people in the country are estimated to need efavirenz, but due to cost and supply difficulties, the number receiving the drug is significantly lower.

“Merck’s supply of efavirenz has not been reliable, and has resulted in treatment interruptions, forcing several hospitals to supply sub-optimal dual therapy,” said Dr. David Wilson of MSF in Thailand.

In welcoming this important move MSF also urged the government to issue such licenses for the production of other essential medicines. “Thailand is demonstrating that the lives of patients have to come before the patents of drug companies, and this policy needs to be expanded to essential drugs that are expensive and in short supply, such as the AIDS drug lopinavir/ritonavir, which currently costs over USD 194 and is far too expensive for Thailand,” said Dr. Wilson.

Thomas Cai of AIDS Care China, an HIV/AIDS community group based in the southern city of Guangzhou also joined the support for the Thai Government’s move.

On Tuesday, the China Treatment Advocacy Coalition comprising 27 independent groups of persons living with HIV/AIDS in China, issued a press statement as part of their continuous efforts which started 2 years ago to get Merck to reduce the price of efavirenz. 

According to the Coalition, among the approximately 30,000 people receiving free anti-retroviral therapy from the government in China, fewer than 3,000 are able to receive efavirenz due to high costs. Efavirenz is much more suitable for those who have liver infections, and a large number of HIV/AIDS patients in China have such co-infections, the statement explained.

However, the Coalition said that: “We have only seen delays and prevarications from [Merck], including in reply to our latest letter in October 2006. Therefore, we believe that it is our responsibility to report this situation to the press, and we hope that this media exposure will help to ensure that people with no access to medicine will all receive care and treatment”.

In the December 2006 AIDS Epidemic Update by UNAIDS/WHO, an estimated 8.6 million people were living with HIV in Asia in 2006, including the 960,000 people who became newly infected in the past year. Approximately 630,000 died from AIDS-related illnesses in 2006. The number of people receiving antiretroviral treatment has increased more than threefold since 2003, and reached an estimated 235,000 by June 2006. This represents about 16% of the total number of people in need of antiretroviral treatment in Asia.

Only Thailand has succeeded in providing treatment to at least 50% of people needing it, according to the Update.

Thailand’s achievement is possible because of generic drug production that underlies the country’s universal HIV/AIDS treatment programme.  According to MSF, before generic production by the GPO, the public drug manufacturer, the cost of HIV/AIDS treatment was more than USD 924 per patient per month, and only 3,000 people were getting treatment. Since the GPO’s generic version of HIV/AIDS triple therapy was available from 2002, the cost of treatment has fallen by 18 times. More than 85,000 people with HIV/AIDS are currently receiving treatment. 

With this latest move using a compulsory licence to enable the GPO to first import, and then locally manufacture, generic efavirenz Thailand has further strengthened its policy to ensure access to affordable AIDS drugs.

Thailand is the third country in the region to use compulsory licensing for cheaper antiretroviral drugs after Malaysia and Indonesia.  In 2003 the Malaysian Government issued a 2-year government use order for imports from India. As a result, treatment at government hospitals dropped by an average of 81% per patient per month. 

Indonesia issued a government use order in 2004 to manufacture two generic versions and this will run until the end of the patent term in 2011 and 2012 respectively. The Indonesia Government, as in the Thai case, awarded 0.5% of the net selling value to the companies concerned. The price of one of the drugs (lamivudine) fell from a retail average of USD 225 in 2000 to the current USD 28 under the government scheme that is supplied by the domestic production. The cheaper drugs are used to treat almost 50% of those in need of AIDS treatment in 2006 compared to 3.5% in 2003.

Studies by the WHO in 2005 and the World Bank last August have raised the alarm bells on rising AIDS drugs costs in countries including Thailand. Both the WHO and World Bank recommended that countries use the public health safeguards in TRIPS and the Doha Declaration.