The pricing and procurement of antiretroviral drugs: an observational study of data from the Global Fund.

393Bulletin of the World Health Organization | May 2006, 84 (5) Abstract The Purchase price report released in August 2004 by the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund) was the first publication of a significant amount of real transaction purchase data for antiretrovirals (ARVs). We did an observational study of the ARV transaction data in the Purchase price report to examine the procurement behaviour of principal recipients of Global Fund grants in developing countries. We found that, with a few exceptions for specific products (e.g. lamivudine) and regions (e.g. eastern Europe), prices in low-income countries were broadly consistent or lower than the lowest differential prices quoted by the research and development sector of the pharmaceutical industry. In lower middle-income countries, prices were more varied and in several instances (lopinavir/ritonavir, didanosine, and zidovudine/lamivudine) were very high compared with the per capita income of the country. In all low- and lower middle-income countries, ARV prices were still significantly high given limited local purchasing power and economic strength, thus reaffirming the need for donor support to achieve rapid scale-up of antiretroviral therapy. However, the price of ARVs will have to decrease to render scale-up financially sustainable for donors and eventually for governments themselves. An important first step in reducing prices will be to make available in the public domain as much ARV transaction data as possible to provide a factual basis for discussions on pricing. The price of ARVs has considerable implications for the sustainability of human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS) treatment in the developing world. Bulletin of the World Health Organization 2006;84:393-398. Voir page 396 le résumé en français. En la página 397 figura un resumen en español. a Department of HIV/AIDS, World Health Organization, 1211 Geneva 27 Switzerland. Correspondence to this author (email: avasan@pih.org). b Mailman School of Public Health, Columbia University, NY, New York, USA. c Partners In Health, Boston, MA, USA. Ref. No. 05-025684 (Submitted: 2 August 2005 – Final revised version received: 21 October 2005 – Accepted: 1 November 2005) The pricing and procurement of antiretroviral drugs: an observational study of data from the Global Fund Ashwin Vasan,a David Hoos,b Joia S Mukherjee,c Paul E Farmer,c Allan G Rosenfield,b & Joseph H Perriëns a Introduction Since the launch of the “3 by 5” initiat tive by the WHO and the Joint United Nations Programme on HIV/AIDS (UNAIDS), the number of people ret ceiving antiretroviral (ARV) therapy has grown from about 300 000 at the end of 2002 to almost 1 000 000 halfway through 2005.1 One of the key determit nants of this growth has been increased funding from the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund); the World Bank; the US Governt ment; and other donors. However, despite increasing experience with bulk procurement, ARVs remain expensive. At the 2005 World Health Assembly in Geneva, multiple delegations from developing countries raised the issue of high ARV prices as an ongoing barrier to treatment access. Since affordable ARVs are critical to continuing the scaling up of treatment programmes it is important to monitor their prices. In the past two years, very little actual ARV tender data have been pubt lished.2,3 Most information has been in the form of indicative price quotes from the pharmaceutical industry published yearly by the Sources and Prices project 4 and the Médecins sans Frontières Camt paign for Access to Essential Medicines.5 A recent report on ARV pricing from the US Government also relied mainly on such quotes.6 The Purchase price report 7 released in August 2004 by the Global Fund was the first publication of a significant body of real transaction pricing data. The report lists the prices and quantities of ARVs purchased by principal recipient organizations — the organizations that are legally responsible for distributing Global Fund grant money or using it to directly implet ment programmes intended to tackle national burdens of HIV, malaria, or tuberculosis. We have done an observational study of the ARV transaction data in the Purchase price report to examine the procurement behaviour of principal recipients. In addition, we investigated whether principal recipients were able to purchase ARVs at the widely advertised differential price quotes from research and development (R&D) firms (who usually hold the relevant patent rights on the product) or generic originator firms, in the case of fixedtdose comt binations available only from these companies.5 We selected 10 of the most commonly used adult formulation ARVs in treatment programmes in developing countries for which there were sufficient data. We did not consider paediatric formulations because the data were extremely scarce. Analysis of the Purchase price report At April 2005, the report included 355 transactions for ARVs, worth approxit mately US$ 14 million. This amount is less than half the total reported ARV procurement with Global Fund dist bursements, which at the end of 2004 was estimated to be greater than US$ 30 million (personal communication: Global Fund to Fight AIDS, Tubercut losis, and Malaria; 17 February 2005). .397 ةحفص في ةيبرعلاب صخللما لىع علاطلاا نكيم 394 Bulletin of the World Health Organization | May 2006, 84 (5) Policy and Practice Antiretroviral pricing in Global Fund programmes Ashwin Vasan et al. The drugs were purchased for use in 21 countries, 15 of which are classified as lowtincome by the World Bank, and six as lower middletincome. The quantity of drugs corresponds to 29 269 patientt years of antiretroviral therapy (excluding paediatric formulations). Currently, the report includes only data received from principal recipients who have chosen to upload information via the Global Fund’s Price reporting mechanism,8 and the data are not independently verified by the Global Fund secretariat. The data are limited to source prices paid by bulk purchasers of ARVs, and do not repret sent endtuser prices for patients.9 Terms of trade and shipping costs for transact tions were not consistently reported, so we did not include them in our study. Shipping and importation tariffs have previously been found to increase the price of medicines by no more than 15% over the factory price, which should not compromise the comparability of prices in this analysis.2,6,10 In addition, while principal recipients must report additional transaction details — e.g. which procurement agent was used, if any, and whether the transaction price was part of a pretnegotiated agreement by another agency, like those arranged by the Clinton Foundation 11–13 — this information is not included in the public report. These data would probably help to gain a better understanding of why prices fall where they do. Results of the analysis Current prices quoted by R&D or generic originator firms reflect reduct tions in price quotes during the past 5 years subsequent to the introduction of generic ARVs on the open market.5,14 Every pharmaceutical company has its own criteria for countries to be eligible for the lowest differential price of ARVs; in most cases these are country income level and geographic location (e.g. whether the country is in subtSaharan Africa). GlaxoSmithKline has a policy of offering its lowest differential price to Global Fund grant recipients, and Merck and Roche even have a separate pricing level for middletincome count tries.5 For consistency, for every ARV studied we have selected the lowest quoted differential price level from the R&D or generic originator firm as the benchmark price. Fig. 1 and Fig. 2 map the prices and suppliers for all transact tions of the ARV products we selected. Each box represents one price at which there was at least one transaction, but for which there may have been multiple transactions at various quantities and for different principal recipients located in different countries. Low-income countries Prices for lowtincome countries (Fig. 1) were generally in line with or lower than the benchmark; most of these transact tions involved generic pharmaceutical Boerhringer Ingelheim Fig. 1. Price per patient-year in US$ for selected antiretrovirals purchased with GFATMa funds: low-income countries WHO 06.40 3TC 150 mg 69 Benchmark quote from originator To be verified Bristol-Meyers Squibb Cipla GlaxoSmithKline Hetero Merck Mcleod’s Pharmaceuticals LtdRanbaxy 0 170 d4T 40 mg 550 130 ZDV 300 mg 212110 370 NVP 200 mg 43850 1000 EFV 200 mg 500430 900 ddl 100 mg 310240 410 IDV 400 mg 40050 470 ZDV/ 3TC 300/150 mg 237140 350 d4T/3TC//NVP 30 or 40 mg/ 150/200 mg 214140 320 a GFTAM = Global Fund to Fight AIDS, TB and Malaria. US$ US$ EFV = efavirenz; ZDV = zidovudine; IDV = indinavir; NVP = nevirapine; ddI = didanosine; 3TC = lamivudine; d4T = stavudine. US$ 395Bulletin of the World Health Organization | May 2006, 84 (5) Policy and Practice Ashwin Vasan et al. Antiretroviral pricing in Global Fund programmes companies. Therefore, in the poorest settings, generic competition seems eft fective in reducing ARV prices — with notable exceptions such as lamivudine (3TC), for which both R&D and get neric suppliers in several transactions priced their product well beyond the benchmark price. All transactions priced at least 10% higher than the benchmark took place in four countries, three of which (Georgia, Kyrgyzstan, and the Ret public of Moldova) are members of the Commonwealth of Independent States (CIS). This finding suggests that phart maceutical companies are strategically pricing their products in this region at levels more suitable for western Europe and, to a lesser extent, the Russian Federt ation. These data also affirm findings that high prices for ARVs are slowing access to antiretroviral therapy in the CIS count tries.15 Also of note is that the prices paid for nevirapine in lowtincome countries supplied by generic manufacturers were approximately three times (200%) lower than the benchmark from Boehringer Ingelheim, the originator, and thus we note that in this dataset there were no purchases of nevirapine from Boehringer Ingelheim made by principal recipients in lowtincome countries. Lower middle-income countries Prices in lower middletincome countries (Fig. 2) varied more than those for the same product in lowtincome countries, and there were several instances where significantly high prices were paid. • Abbott Laboratories, whose lowest differential price for lopinavir/ritot navir (Kaletra) is published as US$ 550, charged El Salvador and Peru between US$ 4468 and US$ 4511, respectively — over eight times (712–720%) more expensive than the benchmark, and over double the gross domestic product (GDP) per capita in each of these countries.16 • BristoltMeyers Squibb priced didant osine (Videx) more than five times (432%) higher than the benchmark in El Salvador, and priced stavudine (Zerit) nearly 22 times (2063%) over their own benchmark in Honduras. • GlaxoSmithKline priced zidovudine/ lamivudine (Combivir) as high as 11 times (1030%) the benchmark of US$ 237 per patienttyear in one transaction in Honduras. Only two of the 11 transactions in lower middletincome countries that were priced at least three times (400%) higher than the benchmark were sourced from generic producers. Hetero priced stavudine at US$ 1351 per patienttyear in Honduras, nearly 25 times (2356%) the benchmark price, but for a total volume of only 60 units. Another firm, Strides, priced lopinavir/ritonavir at US$ 4687 per patienttyear for Cuba — 8.5 times (752%) the reference price. Howt ever, this price might reflect a supplier Fig. 2. Price per patient-year in US$ for selected antiretrovirals purchased with GFATMa funds: lower middle-income countries WHO 06.41 3TC 150 mg 69 Benchmark quote from originator Strides Boerhringer Ingelheim Bristol-Meyers Squibb Cipla GlaxoSmithKline Hetero Merck Abbott Ranbaxy 0 390 d4T 40 mg 550 1400 ZDV 300 mg 2120 1400 NVP 200 mg 4380 2600 EFV 200 mg 5000 2800 ddl 100 mg 3100 1700 LPV/r 133/33 mg 5500 4800 ZDV/ 3TC 300/150 mg 2370 2800 d4T/3TC//NVP 30 or 40 mg/ 150/200 mg 214 0 1200 a GFTAM = Global Fund to Fight AIDS, TB and Malaria. US$ US$ EFV = efavirenz; ZDV = zidovudine; IDV = indinavir; NVP = nevirapine; ddI = didanosine; 3TC = lamivudine; d4T = stavudine; LPV/r = lopinavir/ritonavir. Bayer US$ 396 Bulletin of the World Health Organization | May 2006, 84 (5) Policy and Practice Antiretroviral pricing in Global Fund programmes Ashwin Vasan et al. Résumé Politiques de fixation des prix et d’achat pour les antirétroviraux : étude d’observation sur des données provenant du Fonds mondial Le Purchase price report, publié en août 2004 par le Fonds mondial de lutte contre le SIDA, la tuberculose et le paludisme (Fonds mondial), a été la première publication à contenir une quantité importante de données de transaction réelles concernant les antirétroviraux (ARV). Une étude d’observation a été réalisée sur les données de ce rapport en vue d’analyser les comportements d’achat des principaux bénéficiaires des subventions du Fonds mondial parmi les pays en développement. D’après les résultats de cette étude, mises à part quelques exceptions concernant des produits (lamivudine, par exemple) ou des régions spécifiques (Europe de l’Est, par exemple), les prix payés par les pays à faible revenu étaient à peu près du même ordre, voire plus faibles, que les prix différentiels les plus bas cités par le secteur recherche et développement de l’industrie pharmaceutique. Dans les pays à revenu faible à modéré, les prix présentaient de plus fortes variations et, dans certains cas (lopinavir/ritonavir, didanosine et zidovudine/lamivudine) étaient même très hauts en comparaison du revenu par habitant national. Pour l’ensemble de ces pays, les prix des ARV restaient considérablement élevés en regard du pouvoir d’achat et de la puissance économique limités de ces pays, ce qui conduit à réaffirmer la nécessité d’un soutien sous forme de dons pour obtenir un élargissement rapide de l’accès au traitement antirétroviral. Il faudra toutefois que les prix de revient des ARV baissent pour rendre cet élargissement supportable sur le plan financier pour les donateurs et ultérieurement pour les gouvernements eux-mêmes. Une étape importante dans la réduction des prix consistera à rendre publiques, dans la mesure du possible, les données de transaction relatives aux ARV, en vue de fournir une base factuelle aux négociations concernant les prix de ces médicaments. Ces prix ont des conséquences majeures sur les possibilités de maintenir l’accès au traitement du VIH/SIDA dans le monde en développement. vacuum, and hence monopoly pricing, due to the market restriction created by US trade sanctions on Cuba. Further analyses Though limited, these data show that several R&D companies are pricing ARVs higher for lower middletincome regions where they face little or no comt petition from the generic industry. Possit ble explanations for these uncompetitive markets include strong patent protection in countries that are members of the World Trade Organization, and issues of registration and marketing of generic drugs. Lower middletincome nations are often as financially constrained as their lowtincome counterparts. For example, the GDP per capita for Ukraine (US$ 851), officially a lower middletincome economy, approximates that of Angola (US$ 857) and the Congo (US$ 825) — both lowtincome nations.16 Economic indicators for some better performing lower middletincome nations can be deceptive because of high levels of int come inequality. For instance, Namibia has a per capita GDP of US$ 1463, but the wealthiest 20% of the population represent nearly 80% of total national income.16 Continued exploitation of these markets and their exclusion from differential pricing schemes could have serious ramifications on access to antirett roviral therapy in these countries — in the short term as coverage expands and in the long term as the number of pat tients in need of treatment increases. Some transactions, seemingly outt liers, took place at extremely low prices in both lowt and lower middletincome countries. These prices were often onettime, small purchases intended to help establish a relationship between a principal recipient organization and a particular supplier of ARVs. These transactions can also reveal bottlenecks in the procurement and importation end of the pharmaceutical supply chain. For example, GlaxoSmithKline’s price of US$ 29 per patienttyear for lamivudine to Honduras was approximately 58% lower than their benchmark of US$ 69. However, only 3000 total units were purchased at this price; the price was higher in subsequent transactions bet tween GlaxoSmithKline and Honduras of larger quantities. Similar examples include pricing for the fixedtdose comt bination of stavudine/lamivudine/net virapine (d4T/3TC/NVP) from Cipla and efavirenz from Merck. These prices should not be considered typical. While lowtincome countries prot cured more nevirapine than efavirenz — both commonly used drugs in the same class (nontnucleoside reverse trant scriptase inhibitors, NNRTIs) — lower middletincome countries purchased more efavirenz than nevirapine. Includt ing fixedtdose combinations, lowtincome countries procured nearly eight times the amount of nevirapine versus efavirenz (2 784 900 versus 352 800 units) while lower middletincome countries bought almost 2.5 times the amount of efavit renz versus nevirapine (3 459 600 versus 1 467 840 units). This difference might be explained by the price difference between efavirenz and nevirapine (Fig. 1 and Fig. 2), in addition to the lack of fixedtdose combinations containing efavirenz. Another reason for the differt ence could be concerns about the use of efavirenz in populations of women who do not have access to reliable contracept tion, since it has been linked to birth defects if used in early pregnancy.17 Conclusions Our analysis highlights issues that will grow in importance with the continued scaling up of ARV therapy. ARV prices must be reduced further to reach the goal of the intermediate framework of 3 million people on treatment, and ultimately to ensure universal access to ARV therapy. Persistently high prices for ARVs continue to slow the scaling up of treatment for HIV/AIDS in the develt oping world. Our identification of sigt nificant problems and inconsistencies in ARV procurement and pricing from this small and incomplete dataset illust trates the importance of ensuring that ARV procurement data are in the pubt lic domain and reinforces the need for timely reporting of these transactions. A solid evidence base on pricing could empower the developing world to make costteffective procurement choices, a critical factor in the longtterm sustaint ability of treatment for HIV/AIDS within these countries. O Acknowledgements We thank Eloan Pinheiro, Peter Graaff, Hans Hogerzeil, and Aaron Shakow (WHO, Geneva) and Wafaa EltSadr (Columbia University) for their insights and comments. Competing interests: none declared. 397Bulletin of the World Health Organization | May 2006, 84 (5) Policy and Practice Ashwin Vasan et al. Antiretroviral pricing in Global Fund programmes Resumen Fijación de precios y adquisición de medicamentos antirretrovirales: estudio observacional de datos del Fondo Mundial El Informe sobre precios de adquisición publicado en agosto de 2004 por el Fondo Mundial de Lucha contra el SIDA, la Tuberculosis y la Malaria (Fondo Mundial) fue la primera publicación en la que se presentó un conjunto relevante de datos de compras de antirretrovirales (ARV) correspondientes a transacciones reales. Llevamos a cabo un estudio observacional de los datos de transacción de ARV que figuran en el Informe sobre precios de adquisición a fin de examinar el comportamiento de adquisición de los principales beneficiarios de las subvenciones del Fondo Mundial en los países en desarrollo. Descubrimos que, exceptuando sólo algunos productos (como la lamivudina) y regiones (por ejemplo Europa oriental), los precios en los países de bajos ingresos eran en general similares o inferiores a los precios diferenciales más bajos citados por el sector de investigación y desarrollo de la industria farmacéutica. En los países de ingresos medianos bajos, los precios eran más variados y en algunos casos (lopinavir/ ritonavir, didanosina y zidovudina/lamivudina) eran muy altos en comparación con los ingresos por habitante del país. En todos los países de ingresos bajos o medianos bajos, los precios de los ARV eran todavía significativamente altos, considerando el nivel económico y el limitado poder adquisitivo local, lo que confirma la necesidad de conseguir apoyo de donantes para expandir rápidamente el tratamiento antirretroviral. Sin embargo, el precio de los ARV tendrá que disminuir si se quiere que la expansión sea económicamente sostenible para los donantes y, en definitiva, para los propios gobiernos. Un primer e importante paso para reducir los precios consistirá en hacer de dominio público todos los datos posibles sobre transacciones de ARV, proporcionando así una base objetiva para las discusiones sobre la fijación de precios. Del precio de los ARV depende en gran medida la sostenibilidad de la terapia contra el virus de la inmunodeficiencia humana/ síndrome de inmunodeficiencia adquirida (VIH/SIDA) en el mundo en desarrollo. صخلم :ةيرقهقلا تاسويرفلل ةداضلما ةيودلأا ءاشرو يرعست ايرلالماو لسلاو زديلإا ةحفاكلم يلماعلا قودنصلا تايطعلم ةيفصو ةسارد ةحفاكلم يلماعلا قودنصلا هردصأ يذلا ءاشرلا راعسأ لوح ريرقتلا ناك دقل تايطعم نع نلاعإ لوأ 2004 سطسغأ/بآ رهش في ايرلالماو لسلاو زديلإا .ةيرقهقلا تاسويرفلل ةداضلما ةيودلأل ءاشرلاو لماعتلا ةيمك لوح ةماه لىع فرعتلل ريرقتلا اذه في تايطعلما كلتل ةيفيصوت ةسارد انيرجأ دقو يلماعلا قودنصلا نم حنملل ينقلتلما مهأ ىدل ءاشرلاب صاخلا كولسلا ءانثتساب هنأ اندجو دقو ،ةيمانلا نادلبلا في ايرلالماو لسلاو زديلإا ةحفاكلم لثم ميلاقلأا ضعب ءانثتسابو نيدوفيملالا لثم ةيعونلا تاجوتنلما ضعب اهضعب عم ةيشماتم لخدلا ةضفخنلما نادلبلا في راعسلأا نإف ،ابوروأ قشر في اهيلإ يرشأ يتلا ةيليضفتلا راعسلأا نىدأ نم ضفخأ اهنأ وأ ،ديعب دح لىإ تاذ نادلبلا في امأ .ةيئاودلا ةعانصلا تاكشر في ريوطتلاو ثوحبلا عاطق اهنإ لب ،ًافلاتخا ثركأ تناك راعسلأا نإف ضفخنملل برقلأا طسوتلما لخدلا نيدوفوديزلاو ،نيزوتاديدلاو ،يرفانوتيرلاو يرفانيبوللا لثم( ةلثملأا ضعب في .نادلبلا كلت في درفلا لخد عم ةنراقلماب ًادج ةعفترم تناك )نيدوفيملالاو برقلأا طسوتلما لخدلا تاذ نادلبلاو لخدلا ةضفخنلما نادلبلا عيمج فيو يرثكب لىعأ ةيرقهقلا تاسويرفلل ةداضلما ةيودلأا راعسأ تناك ،ضفخنملل ينحنالما معد لىإ ةجاحلا دكؤي مام ةيداصتقلااو ةيئاشرلا ةوقلا فعض مغر ضفخنت نأ يغبنيو .ةيرقهقلا تاسويرفلل ةداضلما ةيودلأاب ةجلاعلماب ضوهنلل رارمتسا نماض ناكملإاب حبصيل ةيرقهقلا تاسويرفلل ةداضلما ةيودلأا راعسأ .تاموكحلاو نوحنالما اهل معدلا مدقي يتلا ضورعلاب يداصتقلاا ضوهنلا ماعلا عاطقلل حيتتس ةيودلأا كلت راعسأ ضفخ في لىولأا ةماهلا ةوطخلا لعلو ةيرقهقلا تاسويرفلل ةداضلما ةيودلأا ءاشر لوح تايطعم لىع لوصحلا ةداضلما ةيودلأا راعسلأ نإ .اهيرعست ةشقانلم ةيقيقحو ةبلص ةدعاق ديطوتو لماعلا في زديلإا ةجلاعم رارمتسا نماض لىع ةماه ًاراثآ ةيرقهقلا تاسويرفلل .يمانلا References 1. 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