Important note: Information in this article was accurate in 2006. The state of the art may have changed since the publication date.
Wall Street Journal - January 12, 2006
Mark Schoofs, mark.schoofs@wsj.com
The price reductions -- involving nine companies from five countries -- cover two AIDS drugs usually used on patients who have become resistant to first-line medications or who develop unbearable side effects. The deal reduces by 30% or more the cost of already cut-price products offered in most poor countries. The William J. Clinton Foundation's first agreement with generic-drug makers for major price reductions came in October 2003.
Today's announcement will mark the foundation's first foray into reducing the price for second-line AIDS drugs. Second-line regimens are between seven and 30 times as expensive as first-line therapies, according to Doctors Without Borders, a relief organization.
"We're very concerned that in the next few years there will be a dramatic increase in need for second-line drugs, and we fear they won't be available or that they will be very expensive," says Daniel Berman, coordinator of Doctors Without Borders' Access to Essential Medicines Campaign.
While the Clinton program generally offers the lowest price for the drugs and tests its agreements cover, it is only one of many pipelines through which developing countries can purchase drugs. Most brand-name pharmaceutical and generic-drug companies offer their own discount plans. In addition, private companies and nonprofit charity groups make purchases on their own.
More than 240,000 people in Africa, the Caribbean and other developing parts of the world receive drugs through the foundation's agreements. The World Health Organization estimates that more than one million people now receive AIDS medicines in the developing world.
The Clinton team worked to lower prices by helping obtain cheaper ingredients to manufacture drugs. For example, one chemical ingredient accounts for most of the cost of making the drug abacavir. The foundation found an alternative supplier willing to slash the price for that ingredient, according to people at the foundation and at the manufacturing company, Matrix Laboratories Ltd. of India.
To make efavirenz another raw material is crucial but expensive, so the foundation approached a university researcher and asked him to develop a cheaper method of synthesizing that ingredient, which he has done.
"They are really providing a very comprehensive assistance program and are very sensitive to the commercial needs of companies," said Nimmgadda Prasad, executive chairman of Matrix Laboratories of Bangalore, India. Because the Clinton Foundation has 50 eligible countries in its purchasing consortium, it offered high enough volumes to justify lower margins, Mr. Prasad said.
Under the Clinton deal to be announced today, the drug efavirenz will be produced by three Indian generics firms -- Cipla Ltd., Ranbaxy Laboratories Ltd. and Strides Arcolab Ltd. -- and one South African generics maker, Aspen Pharmacare Holdings Ltd. The drug abacavir will be produced only by Cipla. Under the deal, efavirenz would sell for no more than $240 per patient per year, and abacavir for no more than $447 as long as orders meet volume and other specifications.
Four companies will manufacture HIV "rapid tests" -- which can determine a person's HIV status in less than 20 minutes -- for between 49 cents and 65 cents per test. The companies are Chembio Diagnostics Systems, a unit of Chembio Diagnostics Inc. of Medford, N.Y.; Orgenics Ltd. of Yavne, Israel, owned by Inverness Medical Innovations Inc. of Waltham, Mass.; Qualpro Diagnostics of India, and Shanghai Kehua Bio-Engineering Co. of Shanghai.
In the U.S. and Europe, abacavir is marketed as Ziagen by GlaxoSmithKline PLC. In the U.S., efavirenz is marketed as Sustiva by Bristol-Myers Squibb Co.; in most of the rest of the world it is marketed as Stocrin by MSD, the international trademark of Merck & Co.
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