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Caught in the Middle – HIV Medicines Pricing Sky High in ‘Middle-Income’ Countries

Each year, MSF publishes a survey of the latest prices for antiretroviral medicines to treat people living with HIV/AIDS in developing countries. It started out as a way of offering a practical guide for governments and other treatment providers to help them find the most affordable medicines for treating people with HIV/AIDS and to  highlight access barriers.  In addition, by making prices public, the document aimed to help spur on competition between drug companies in order to drive down prices. The report also provides an overview of the main challenges, trends and progress in access to antiretrovirals.
This year, the main finding is the growing and deadly divide in prices for antiretrovirals offered to the poorest countries versus lower and middle-income countries, where large populations of HIV-positive people live.  Companies are increasingly not offering standardised price cuts in these countries, leaving them to negotiate on a case-by-case basis, which we have seen leads to high prices.
Gabriela Costa Chaves is a pharmacist with MSF’s Access Campaign, which compiles the annual report. Based in Rio de Janiero in Brazil, she’s in a strong position also to measure the impact of higher drug prices for countries like Brazil.
Is the idea of charging different prices for medicines in different parts of the world new?
No, the big drug companies do generally offer drugs at different prices according to different countries’ economic status – it’s called tiered pricing. But this year, for the first time, we face an incredible difference between the prices for medicines that companies are offering to the poorest countries and the prices that imiddle-income countries are being asked to pay. For example, raltegravir is one of the newer antiretroviral medicines and Brazil is being asked to pay more than US$ 5,870 to cover a year’s treatment for a single patient. But in lower-income countries, the same medicine is priced by the company at around $1,000. So you can see there is a huge difference and this higher cost could pose a threat to the sustainability of the national AIDS treatment programme here in Brazil.
Drug companies say that since Brazil has been funding free treatment for all those in need for some years now, it clearly has the resources to pay more for medicines than say, much poorer countries that don’t have such successful national treatment programmes. Is that a fair point? 
No. Just because Brazil does indeed offer antiretroviral treatment to ALL those in need, it doesn’t mean that they are able to pay any prices for the drugs. In fact, it’s precisely because of Brazil’s early and leading role in opening up access to AIDS treatment that it is now experiencing many of the problems that all developing countries will face.
Brazil has been offering free treatment to all those in need for fifteen years now and that means patients here have been on treatment longer than any other group worldwide. So, as treatment with what’s called first-line drugs stops being as effective over time, increasing numbers of patients now need to be switched to newer HIV/AIDS drugs – such as raltegravir which cost a great deal more than the older drugs. And what’s happening here in Brazil will begin – is beginning -- to happen across all other developing countries, as patients grow resistant to their first-line drugs.
So what’s Brazil doing to try to get those prices down?
Well, the government has been pursuing several strategies, among them directly challenging the drug companies to bring their prices down, based on knowledge of the production cost. Brazil is already producing generic versions of some AIDS drugs off-patent, so was able to calculate production costs of patented medicines. Another strategy the government has adopted is to implement the flexibilities built into the international trade laws (TRIPS) to protect public health –for example the use of compulsory licences to allow more affordable local production of medicines.*
For example, in 2007 after direct price negotiations with a company were seen to be going nowhere, the government opted to issue a compulsory licence for the local production of the antiretroviral drug efavirenz. At the time, 75,000 patients in Brazil were being treated with this drug and it was estimated that the country would save around US$ 236 million over five years by switching to generic versions of the drug.
Specifically for the newer drug we mentioned, raltegravir, how is Brazil hoping to get the price down from US$5,870 per patient per year?
Well, in fact, the government has announced it is negotiating a technology transfer with the company for the local production of raltegravir. They announced that through this transfer, the price of the drug would drop from $ 5,800 to $ 4,000. This is quite new and we need to monitor the process closely. This is not a great price drop in comparison with those achieved by generic competition for other drugs in the past, so the terms of the agreement are crucial and they may be other more effective ways to lower the price. It is important that the terms of any agreement should benefit people in Brazil of course but any decision or move taken by Brazil in this area of access to medicines will also be taken as a precedent by other developing countries. So we need to look at how this kind of arrangement might impact on other developing countries’ ability to access key medicines.
Brazil is one of many countries hit by these higher prices. Brazil shares problems with other countries like India, China, South Africa - do they share common solutions to combat high prices?
Brazil, as well as other countries, should make sure that TRIPS flexibilities – such as the use of compulsory licences to override patents – are pursued to protect public health and support all countries implementing them. We also need, in the medium term, to support more challenges to patent applications so that improper patents are not given to drugs that aren’t truly innovative.  This has already proved to be very important in Brazil where patents on a key HIV medicine, tenofovir where successful opposed by civil society groups (GTPI/Rebrip) and by a public manufacturer (Farmanguinhos) and we have just seen the first batch of   generic tenofovir arriving in pharmacies in Brazil.  Brazil also needs to put pressure on companies in relation to the Medicines Patent Pool* to include all developing countries.
We are at a turning point in the fight against HIV/AIDS -- how important is it to get the message across that affordable AIDS treatment must be open to all people with HIV in developing countries?
I think we are facing a scenario on the one hand where intellectual property rights including patents on newer medicines are being ever more ferociously protected and yet at the very same time we are at a tipping point in the HIV/AIDS epidemic when the science is telling us that treatment with antiretrovirals can also prevent transmission of the virus. This represents a revolution in the way we manage this disease so that it’s more than ever crucial that all people in need, in all developing countries, have access to antiretroviral medicines.

 

*a compulsory licence (CL) is the right, under international trade rules (TRIPS) for the state to allow other producers to develop medicines that are under patent, based on the public interest.

**Medicines Patent Pool (MPP): The Medicines Patent Pool was set up in 2010 as a way to accelerate the development of affordable HIV/AIDS medicines.  Patent pools have been used in the past to simulate innovation and promote competition in areas of technology ranging from sewing machines, aircraft, animal cloning and audio compression. Through a patent pool, two or more patent-holders agree to share their intellectual property with each other or with third parties through the negotiation of licences.
Page updated: 8 August 2011
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