Transcript Affordable Medicines for Developing Countries

WHO-WTO Workshop Differential
Pricing and Financing of
Essential Drugs
Høsbjør, Norway 8-11 April 2001
Ellen ‘t Hoen, LL.M.
Médecins sans Frontières (MSF)
Affordable Medicines for
Developing Countries
Access to Essential Medicines Campaign
8, rue Saint Sabin
75544 Paris Cedex 11, France
E-mail:[email protected]
Tel: + 33 1 40 21 28 36
www.accessmed-msf.org
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Factors Affecting Access to
Essential Medicines
R&D
Production
Approval
Quality
Distribution
Drug information, rationale use
Diagnosis/prescription/monitoring
Price
Compliance
Pharmacovigilance
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Consensus
Action Is Needed
Let us be frank about it: essential and lifesaving drugs exist while millions and
millions of people cannot afford them.
That amounts to a moral problem, a
political problem and a problem of
credibility for the global market system.
Gro Harlem Brundtland, Director General, World
Health Organization
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Every year malaria, tuberculosis and AIDS kill
around 6 million people, almost all of them in
the developing world. These premature deaths
are a reproach to us all. ….
Part of the problem is poor countries' lack of
access to drugs. The poor cannot afford
expensive medicines. Keeping an AIDS patient
alive for a year can cost up to $15,000 - 24 times
the average annual income in Zimbabwe, where
one in four adults is HIV-positive.
Mike Moore, DG of the World Trade Organization
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Global Pharmaceutical Market
2002 $406 billion
5%
1.3%
Market projected to
grow 7.8% annually
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
Source www.ims-global.com/insight/report/global/report.htm
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Objective:
Equitable Drug Prices
• The policy of assuring dramatically
reduced drug prices so that they are truly
affordable to the people who need them
• A policy that is
– sustainable (not based on charity or donations)
– Strengthens developing countries’ autonomy
– Attracts donor funding
– Not limited to HIV/AIDS medication only
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Strategies for Lowering
Drug Prices
• Differential/tiered pricing (market
segmentation) by Big Pharma
• Local production under voluntary
licensing agreements
• Global procurement and distribution
system
• Increased competitiveness in the
pharmaceutical market
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Differential/tiered Pricing
• Relies on spontaneous and voluntary lowering of
prices
• Drug firms prefer low volume –high price
strategy
• Requires separation of markets
• Comes with strings attached or hidden agendas
• Does not encourage sustainability or self
reliance
• Might hamper other, more sustainable
approaches
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Local Production Under
Voluntary Licensing
• Based on voluntary licensing agreements (will??)
• Requires manufacturing capacity  agreements
should allow for export to low income countries
• Encourages technology transfer and pharmaceutical
industrial development in the South
• No risk of parallel-importation in high income markets
• Paradox: strong IP protection is a condition for
technology transfer. In Practice: Voluntary licenses
more likely when strong compulsory licensing system
exists
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Global Procurement and
Distribution System
• Experience and expertise with procurement
exists (UNICEF)
• Might work for specific diseases/ products
• Requires a long term commitment
• Does not solve structural problems
• Might negatively affect local manufacturing
capacity
• Regulatory barriers (pre-qualification) and
patent barriers in certain countries (exceptions)
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Increased competitiveness
• Proven effective
• Encourages sustainable solutions and
industrial development
• Requires a pro public health and
flexible interpretation of the TRIPS
Agreement
• Does TRIPS offer enough flexibility?
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Learning: Price reductions
from generic competition
Average reduction: 82%
3.5
Cost per unit, US$
3
1996
1997
1998
1999
2000
2001
2.5
2
1.5
1
0.5
0
AZT, 100mg
Ellen ‘t Hoen, MSF
AZT 300mg /3TC
150mg
ddI, 100mg
d4T, 40mg
3TC, 150mg
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
Brazilian National AIDS Program, unpub. data
12
Learning: Price Stability
w/o generic competition
Average reduction: 9%
Cost per unit, US$
3.5
(without IDV in 2000 when it was generic)
3
2.5
1996
1997
1998
1999
2000
2
1.5
1
0.5
0
IDV, 400mg
NFV, 250mg
RTV, 100mg
Ministry of Health, Brazil, unpub. data
SQV, 200mg
NVP, 200mg
Generic Competition
Sample AIDS triple-combination: lowest world prices
(stavudine (d4T) + lamivudine (3TC) + nevirapine)
12000
10000
8000
Brand
Generic
6000
4000
2000
01
20
Ap
r
M
ar
b
Fe
n
Ja
c
De
v
No
Oc
t
pt
Se
Au
g
ly
Ju
ne
Ju
M
ay
0
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Generic Competition
Sample AIDS triple-combination: lowest world prices
(stavudine (d4T) + lamivudine (3TC) + nevirapine)
3000
Brand: $10439
2500
US$
2000
Brazil:
$2767
1500
Brand
Generic
Brand: $931
Brand: $712
1000
…?
500
Cipla: $800
Cipla: $350
…?
0
July
2000
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
apr-01
Hetero: $347
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Generic Competition
Prices of d4T (40 mg capsule) per patient/year
(lowest world prices)
d4T-Brand
d4T-Generic
3500
3000
BMS
US$
2500
2000
1500
AAI
Brazil
1000
Cipla
BMS
500
Hetero
0
May June July Aug Sept Oct
2000
Ellen ‘t Hoen, MSF
Nov Dec
Jan
Feb
Mar
Apr
2001
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Generic Competition: d4T
Prices of D4T (40 mg capsule) per patient/year
(lowest world prices)
D4T-Brand
D4T-Generic
$300,00
BMS: $3161
$250,00
AAI: $274
$200,00
Brazil: $204
$150,00
BMS: $55
$100,00
…?
$50,00
Cipla: $40
Hetero: $48
01
20
Ap
r
M
ar
b
Fe
n
Ja
c
De
v
No
Oc
t
…?
Se
pt
em
be
r2
00
0
$0,00
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Price Development of Hepatitis B Vaccine
Change in Prices Over Time of Hepatitis B Vaccine (Plasma-Derived and
Recombinant DNA) offered to Developing Countries (lowe st price s obtaine d) from
De nise De Roe ck
40
35
Merck, then Pasteur
sole producers
Merck sole
producer of
rDNA
30
US$ (FOB)
25
PAHO's first
HBV contract
(for rDNA at
$0.82/dose)
20
15
Korean firms
(Chiel, KGCC)
acquire tech.
And enter
market
Indonesia int'l
tender & bid
($.95/dose)
Asian & other
producers enter
rDNA market;
price drops to
close to $0.540.69/dose
10
Int'l Hepatitis B
Task Force
formed (1986)
Philippines
tender (plasma):
$.65
5
Biogen DNA
patent expires in
most of world
Current
plasma
price (.45.57/dose)
0
1981
1983
1985
1987
1989
1991
plasma-derived
Ellen ‘t Hoen, MSF
1993
1995
1997
1998
1999
rDNA
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Recommendations 1/3
• Not one single solution – mix of strategies
that are mutually supportive
• Enforceable regulation to encourage equity
pricing and prevent parallel re-importation
in the EU, north America and Japan
– Example: EU directive on equity pricing that ensures
that equitable priced drugs cannot be put on the EU
market
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Recommendations 2/3
• Global procurement strategies for selected
drugs
– Designed to encourage and improve generic
production
– Overcome regulatory barriers: need for
international pre-qualification activities
– Overcome IP barriers: exceptions for globally
procured goods
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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Recommendations 3/3
• Actively encourage competition
– Recognise the role of generic manufacturing
– Support to expand and upgrade generic production in
developing countries
– Take away barriers in the regulatory systems
– Encourage technology transfer – targeted at countries that have
production capacity
– Encourage voluntary licensing agreements
– Assist with implementation of fast track compulsory licensing
• Launch debate on how to reconcile TRIPS requirements
with health needs – Health TRIPS Council in June 2001
Ellen ‘t Hoen, MSF
Høsbjør, 8-11April 2001, WHO-WTO Workshop Differential Pricing
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