AEGiS-WSJ: Roche Is Faulted for High Cost Of AIDS Drug in Poor Countries

Important note: Information in this article was accurate in 2002. The state of the art may have changed since the publication date.

Roche Is Faulted for High Cost Of AIDS Drug in Poor Countries

Wall Street Journal - November 15, 2002
Rachel Zimmerman, Staff Reporter of The Wall Street Journal

Doctors Without Borders, an international humanitarian group, said Roche Holding AG hasn't lived up to its promise to cut prices for a critical AIDS medicine in developing countries.

The French nonprofit group released pricing information to support its argument, as well as data that it said show the Swiss drug maker could easily cut prices further and still make a profit.

Doctors Without Borders, also known as Medecins Sans Frontieres, or MSF, said Roche is the lone holdout among five major drug makers that announced plans to slash the prices of key AIDS antiretroviral medicines.

The organization said it surveyed the five companies and asked them for their best price on a variety of AIDS drugs. Roche responded with a price of about $3,170, at current exchange rates, for Viracept per patient per year in the least-developed countries. But the group said it couldn't get that price in many countries when it came time to make purchases. In contrast, Merck & Co., based in New Jersey, promised a price of $600 for Crixivan, which like Viracept is a protease inhibitor, and has honored it in actual sales, the aid group said.

Charles Alfaro, a Roche spokesman, said he wouldn't discuss the specifics of Viracept pricing. But he did say the company has dropped the price in the poorest countries, and is also spending on education and training programs. "As a result, we are not making any profit in Africa and least-developed countries," he said.

Daniel Berman, a spokesman for MSF, said Roche's price lists vary widely, and the actual price turns out to be higher than promised in several countries. In Cameroon, for instance, MSF paid Roche $4,124 a year for Viracept, Mr. Berman said. In middle-income countries, like Ukraine, the per-patient annual price quoted by Roche is about $7,110, Mr. Berman says, though he added that Roche offered a one-time donation of 10 boxes in that country. That's more than the retail price in Switzerland: $6,169 a year.

In May 2000, after an intense international lobbying campaign and with looming competition from generic-drug makers, Roche joined four competitors pledging to slash AIDS drug prices. Since then, the others -- Merck, GlaxoSmithKline PLC of the United Kingdom; Boehringer-Ingelheim GmbH of Germany; and New York-based Bristol-Myers Squibb Co. -- say they have cut the prices of key antiretroviral medicines by about 85% to 90% in poor countries.

In an April 18 document laying out Roche's policies and principles, the company "pledged not to profit from its HIV therapeutic portfolio" in the least-developed nations.

However, Swiss AIDS researchers, who joined MSF's campaign to pressure Roche, say the company does appear to be profiting. MSF produced a letter from a raw-materials supplier for Agouron, the division of Pfizer Inc. that markets Viracept in North America. The June 5 letter says Viracept's raw materials can be purchased for between $700 and $900 a kilogram.

For that price, an annual dosage of the drug could be manufactured and sold profitably for about $1,350 per patient, according to Eloan Dos Santos Pinheiro, a former official of a government-owned generic-drug producer in Brazil.

Write to Rachel Zimmerman at rachel.zimmerman@wsj.com

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