Wall Street Journal - March 4, 2005
Paul Davies, Staff Reporter of The Wall Street Journal

A rapid increase in purchases by two big AIDS-relief programs is stretching supplies of two treatments and will likely lead to shortages of the drugs for patients in developing countries, relief officials say.

Bristol-Myers Squibb Co., which makes both drugs, and Merck & Co., which markets one of them in developing countries, acknowledge the likely shortages and say the problem stems largely from the acceleration of a five-year, $15 billion emergency relief effort launched by President Bush to get more drugs to combat AIDS in developing countries, especially in sub-Saharan Africa.

The short supply is attributed to increased orders from the President's Emergency Program for AIDS Relief (Pepfar), on top of rising demand from the Global Fund to Fight AIDS, Tuberculosis and Malaria, a multinational financing agency, as well as several other organizations.

The most severe shortage is expected to occur with Bristol-Myers's stavudine, sold under the brand name Zerit, the company says. Stavudine is one of the most broadly used first-line treatments for patients infected with HIV. Paul Lalvani, the procurement manager for the Global Fund in Geneva, says, "Some [developing] countries have indicated when they placed orders for stavudine that they have not been able to access the product."

In addition to increased orders, supplies in developing countries are low because of the recent withdrawal of generic versions made by two Indian companies, after the World Health Organization withdrew its approval of the drugs.

In 2002, about 10% of the stavudine produced by Bristol-Myers went to developing countries. This year, the company expects one-third to one-half of its stavudine will be sent to poor countries.

The other drug in short supply is efavirenz, which Bristol-Myers makes and markets in the U.S. and Merck markets in developing countries under the brand name Stockrin. Merck says demand for efavirenz has tripled in some areas.

Bristol-Myers, based in New York, and Merck, of Whitehouse Station, N.J., hope to work out the supply issues but say shortages could result as demand heats up.

The companies say it is difficult to predict how long the problem will persist because demand continues to increase. But a Merck spokesman says that any shortages of efavirenz should be only "temporary and sporadic." Some generic companies in India and Africa have been approved to make efavirenz as well, easing any shortage.

The first priority, both companies say, is to ensure patients using the drugs continue to get them. But some new patients may have to wait or seek alternative treatments.

Both companies say shortages could occur in developed countries, including the U.S. But some observers doubt that will happen, noting that the drugs are sold at a profit in developed countries; in sub-Saharan Africa and other developing regions, the AIDS drugs are sold at cost, according to the companies.

Bristol-Myers says it won't favor one country over another. It says the company is committed to doing all it can to help HIV/AIDS patients everywhere.

"We will continue to supply HIV medicines at no profit in the developing world," spokesman Brian Henry says.

Bristol-Myers says it produced 1.4 metric tons of stavudine last year and planned to boost output to 2.5 metric tons this year based on projected orders. As more orders came in, the company ramped up production and now expects to make four metric tons in 2005. (One metric ton equals 20 million to 25 million capsules, depending on the dose.)

"Our goal is to maintain uninterrupted supply for current patients, while accelerating production to meet the forecasted increase in demand from new patients," Merck said in a statement.

The short supply raises the issue of whether the U.S. government will approve more generic AIDS drugs for international use. The U.S. requires that all medications supplied through Pepfar be approved by the Food and Drug Administration. Those that violate U.S. patent laws can get a special approval for use in other countries.

Advocacy groups and the foreign generics industry are especially anxious to see FDA approval for Indian-made products that combine three medicines in one pill. The products violate U.S. patent laws but are used in other countries. In January, the U.S. approved a South African generic product that co-packages three drugs with the permission of the brand companies.

Approval of more generics would ease shortages, advocates say. "The generics have this stuff in a warehouse," says Bill Haddad, an advocate and chief executive officer of biotech research company Biogenerics Inc.

U.S. Global AIDS Coordinator Randall Tobias told a congressional committee Wednesday that he expected more approvals of generic AIDS drugs. Mark Dybul, deputy chief of Pepfar, says, "People are very cognizant of the issue and are working to resolve the problems." He says the organization is seeking bids from companies to manage supply-chain issues to avoid future shortages.

Dr. Dybul says he has had no indication the drug makers would use a shortage to raise prices.

The current short supply shows the need for better forecasting, as well as more generics approvals, says Kevin Frost, vice president of clinical research and prevention programs at the American Foundation for AIDS Research.

To be sure, the vast majority of people sick with AIDS in the developing world don't have access to life-saving treatments. More than 45 million people world-wide are infected with HIV, and 95% live in developing countries, according to the Global Fund.

About three million people died of AIDS in 2003 and an additional five million became infected, according to the Global Fund. Three quarters of those who died were in sub-Saharan Africa.

A U.N. study to be released today projected that more than 80 million Africans may die from AIDS by 2025, and infections could soar to 90 million, or more than 10% of the population.

The number of people in developing countries receiving treatment last year was only 700,000. Still, that number was an increase of 75% from the year before, according to the World Health Organization. In sub-Saharan Africa, the number of people receiving treatment more than doubled, to 310,000.

"The good news is we're scaling up treatment," said Anil Soni, executive director of the Friends of the Global Fund, which advocates on behalf of the Global Fund in the U.S.

But those who treat patients in developing countries say the short supply is creating fear.

"This is psychological torture to get patients worried that there will not be enough drugs," says Peter Mugyenyi, the director of the Joint Clinical Research Centre in Kampala, Uganda. He says the relief organizations and the drug makers should have done a better job of coordinating requests and supply.

"AIDS is not an overnight disease," Dr. Mugyenyi says. "The numbers didn't just materialize. It's not acceptable to run short of the drug when huge numbers of people are dying."

Sarah Lueck and Marilyn Chase contributed to this article.

Write to Paul Davies at paul.davies@wsj.com
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