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Why Brazil and Others Can’t Afford Last-Generation AIDS Drugs

The international organization Doctors Without Borders (MSF) revealed that while generic production has brought down the prices of most first-line antiretrovirals (ARVs) from over $10,000 in 2000 to as little as $150 per patient in June 2005, prices of newer ARVs for children are up to 12 times higher.

This information is contained in a new edition of a pricing guide being published today “Untangling the Web of Price Reductions: A Pricing Guide For the Purchase of ARVs in Developing Countries”. 8th edition.


Access to newer drugs is increasingly critical as the growing number of people with HIV/AIDS currently on treatment will inevitably develop resistance to first-line treatments. 


MSF currently provides ARV treatment for approximately 35,000 people in about 30 countries. Nearly 70% of the patients in MSF’s projects are on World Health Organization (WHO )-recommended three-in-one combination pills as first-line therapy.


“But we are already beginning to confront the ‘second-line crisis’ that newer treatment programs may not feel for several years,” said Dr. Felipe Garcia de la Vega, AIDS specialist with MSF’s Campaign for Access to Essential Medicines.


“Although our clinical outcomes are good so far – the average survival rate in our projects is 80% after 12 months on treatment – some of our programs have been operating for more than five years now and we have naturally started having to switch some of our patients to second-line treatments as they have developed resistance to first-line drugs.”


“Today, MSF pays less than US$ 250 per person per year for WHO-prequalified first-line treatments sourced from Indian generic manufacturers. This has only been possible because there have not been patents on pharmaceuticals in key manufacturing countries like Brazil and India, and because there has been robust generic competition,” said Fernando Pascual, pharmacist and one of the authors of the MSF report.


“But when we switch to second-line treatments, the price increases six- to 12-fold. Treating a child can be four times more expensive than treating an adult.”


January 1, 2005 saw the implementation of the World Trade Organization’s Agreement on Trade-related Aspects of Intellectual Property Rights ( TRIPS ) in India, one of the main sources of generic ARVs today. India must now recognize product patents on medicines.


This may lead to there only being one producer – the patent holder – for newer drugs. In the absence of competition, this sole supplier can set a monopoly price.


In MSF’s AIDS projects, for instance, the number of patients taking lopinavir/ritonavir and other second-line ARVs is small, but the organization pays exorbitant prices for the drug.


“In Guatemala, where MSF provides ARV treatment for 1,700 people with HIV/AIDS, Abbott charges $2.66 per capsule,” said Fernando Pascual.


“Although MSF is treating just 11 patients with lopinavir/ritonavir, we pay more than $5,800 per person per year for the one drug alone.”


According to the MSF report, the current pricing system based on companies giving voluntary discounts to developing countries is not sufficient to guarantee affordability of medicines, now or in the future.


The problems with this mechanism, known as differential pricing, fall into three broad categories. First, some single-source drugs are simply very expensive.


For instance, the differential price for abacavir announced by GlaxoSmithKline is more than $800 per patient per year in developing countries.


Second, prices announced by pharmaceutical companies are not available in reality because manufacturers have not registered or are not marketing their drugs in countries.


This is the case not only for certain originator products in Mozambique and Cambodia but also some generics in Latin America.


Third, some companies do not offer discounts to middle-income countries.


WHO estimates that out of the 6.5 million people needing ARVs in developing countries today, approximately one million are receiving them. Most of them are currently taking first-line treatments.


But many of them will need access to second-line drugs within the next few years. The consequences are already felt in countries like Brazil, which has been running a nationwide AIDS treatment program since 1996: the country today spends 63% of its total AIDS drug budget on three products ( Abbott’s lopinavir/ritonavir, Gilead’s tenofovir and Merck’s efavirenz ).


“It is urgent to address how high the final drug bill is in a few years’ time, and who will foot it to meet patients’ needs,” said Dr Garcia de la Vega.


“G8 countries and other donors are discussing universal access to ARVs, but this will remain an impossible goal if prices continue to soar.


“It is vital that governments and international organizations like the WHO take and encourage immediate steps – such as compulsory licensing – that allow countries to make or import more affordable generic medicines.”


Médecins Sans Frontières – www.doctorswithoutborders-usa.org

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