October 24, 2016
An opening lecture at the 2016 Glasgow HIV Congress challenged the current model of drug pricing in high-income countries by showing mark-ups that are sometimes more than 1,000 times higher than production costs making many medicines largely unaffordable.
The analysis was presented by Andrew Hill, an independent advisor to international health organisations but who also has worked for many of the largest pharmaceutical companies.1
Three examples of the current urgency for better pricing are PrEP, new drugs for viral hepatitis (both HBV and HCV) and the broad range of chemotherapies for cancer. Even discounting very low access to cancer treatment in low- and middle-income countries (LMIC) globally, more than five million people die annually from preventable infections due to hepatitis B and C, HIV, TB and malaria.2
This analysis argues for a more affordable model based on the bulk costs of the active pharmaceutical ingredients (per kilogram) and include 10-50% profits after allowing for manufacturing and other production costs.3
The presentation also showed the disparity of prices charged for the same drugs across similar high-income countries, with the U.S. generally paying highest. For example, a 12-week course of daily sofosbuvir has target production costs of about €55 but currently costs €50,000 in the U.S. and only €3,485 in Australia (based on volume discount to treatment hepatitis C in Australia on a population level).
Differences between target costs for a range of HIV, hepatitis and cancer medicines compared to current prices are shown in Table 1 below. For example, the annual U.S. vs target generic prices for commonly used ARVs are approximately $18,000 vs $161 for abacavir/3TC, $21,000 vs $67 for tenofovir-DF/FTC and $34,400 vs $110 for Atripla. The recently off-patent cancer drug imatinib (Glivic/Gleevic), used to treat chronic myeloid leukaemia, has a U.S. price of $106,000 but a potential generic target price of just $180.
|Table 1: Examples of Current and Target Prices of Commonly Used Srugs (USD$)|
|Drug||Current U.S. Price||Current Lowest Generic *||Minimum Target Cost||Comment / Patent Expiry Date|
|Hepatitis B (annual cost)|
|Hepatitis C direct acting antivirals (DAAs) (3 month course)|
|sofosbuvir + ledipasvir||56,700||507||96|
|sofosbuvir + velpatasvir||74,760||--||181-216|
|HIV antiretrovirals (annual cost)|
|Cancer drugs (treatment cost)|
|imatinib||106,322||790||180||Chronic Myeloid Leukaemia|
|erlotinib||79,891||1932||240||Non-Small Cell Lung Cancer|
|sorafenib||139,138||1332||1450||Renal Cell Carcinoma|
|cabazitaxel||120,613||30,810||660||Metastatic prostate cancer|
|dasatinib||10,408||1183||15||Chronic Myeloid Leukaemia|
* From India, Thailand, Brazil or South Africa.
In some high income countries, including the UK, it is legal to important generic medicine for personal use (defined as a three-month course. This has become increasing used to enable the only access to PrEP and HCV medications, often supported by community websites and byers clubs.
Three other posters at Glasgow 2016 present new data on effectiveness of generic medicines. A pharmacokinetic analysis of generic PrEP used by gay men at the Dean Street clinic supported the used of several FDA-approved generic formulations that are easily available online.4
Two other posters report high HCV cure rates by users of two international online buyer's clubs.5,6
In addition to making vast profits from this inflated approach to pricing medicines in high-income countries, many of the largest manufactures avoid billions of dollars in U.S. tax by registering profits in offshore accounts. In 2015, Pfizer, Merck, J&J, Amgen, Abbott and BMS avoided USD $ 20, 16, 14, 9, 7 and 7 billion dollars respectively.7
The $10 billion in taxes avoided by Gilead, the manufacturer of sofosbuvir and other recently approved HCV drugs, would be sufficient to globally cure HCV based on lowest cost target prices.
This study was based on a growing body of work that has been presented by Dr. Hill and colleagues at other major conferences. At AIDS 2016 in Durban he nicely connected pricing to other global health targets by showing that $90, $90, $90 are achievable goals in LMICs to treat HIV and HBV for a year and to cure HCV.8
High-income countries should not be planning health care based on LMIC prices while medicines are in patent -- wealthier economies can and should pay more for medicines. But the excessively greed shown by the current prices is destablising drug access globally to treatment that people need now. As such, the personal importation in the UK of generic versions of in-patent drugs is easy to support.
Two years ago at Glasgow, Dr. Hill reported that availability of generic ARVs could save the UK more than £1.25 billion over five years.9
|Large Disparities in Costs of Antiretrovirals Between Low- and Middle-Income Countries|
|Ups and Downs in the Struggle for Fair Drug Pricing (Video)|
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