BMS chief executive Peter Dolan meets residents of the KwaZulu Natal Province, South Africa, in an AIDS awareness event.
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Mugyenyi never landed in court. But his actions, and those of others like him, helped create a new era of intellectual property
laws and mores in treating AIDS. Later that same year, companies dropped the court case in South Africa and began to license
ARVs to generic manufacturers for use in the developing world. GlaxoSmithKline (GSK) gave South Africa's Aspen Pharmacare
permission to manufacture and distribute Retrovir (zidovudine), Epivir (lamivudine), and Combivir (zidovudine/lamivudine).
The following year, Boehringer Ingelheim (BI) issued Aspen a license to produce Viramune (nevirapine).
Those licenses would prove vital in the next round of debate over access and patents, which came when President Bush's Emergency
Plan for AIDS Relief (PEPFAR) was implemented in 2004. The program, a five-year $15 billion initiative to combat HIV/AIDS
in 15 target countries, aims to increase ARV usage, especially in Africa. But the US government said PEPFAR must buy FDA-approved
products—there was to be no quality double standard for rich and poor patients. They also said that generic ARVs would be
eligible for purchase only where they did not violate patent rights. The sum of that equation meant PEPFAR used brand-name
drugs only.
Some industry initiatives include home-based care as part of larger community-based programs for rural populations.
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The situation changed in January 2005, when FDA granted tentative approval (given when patents or marketing exclusivity are
still in effect in the US) to Aspen's co-packaged offering of lamivudine/zidovudine and nevirapine.
Activists hailed the approval as a major advance. They believe local manufacturers can produce AIDS drugs cheaper than brand-name
companies because they have lower labor costs and because they've learned efficiency by working with low-margin products.
Mark Isaac, vice president of the Elizabeth Glaser Pediatric AIDS Foundation, estimates the co-packaged treatment's price
at $16 to $20 a month, less than half of the $55 "no profit" price that he pays for the same drugs from the research-based
industry. The drugs will also be cheaper because they are exempt from the 10 percent tariff recently imposed by the East African
Community's Customs Union on imported medicines, which was intended to stimulate regional trading.
In It Together
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If the Aspen model works, says one Big Pharma company source, it could change the model for the developing world. Research-based
companies could focus on R&D, and leave the manufacturing to generic companies. But the truth is, some serious questions remain
about the Aspen model:
Cheap drugs Some executives doubt that the Aspen model will actually deliver low prices. They remember President Bill Clinton's HIV/AIDS
Initiative, which promised to obtain steep discounts on ARVs by working closely with generic manufacturers. However, at a
meeting with NGOs and the Indian generic firms in January, many procurement professionals say they haven't been able to obtain
the "Clinton price."
Supply issues Just because a company produces drugs cheaply, consistent supplies are not guaranteed.
Forecast the Future
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"Generics are usually available today, but tomorrow you're not sure," says Joseph Saba, CEO of Axios, a consulting firm that
implements the industry's programs in Africa. "People who work with generic usually end up buying brand drugs while waiting
for deliveries of generic," he says.
Brazil and Thailand have both called on the pharma industry to supply ARVs when copy manufacturers couldn't fulfill their
tenders. But in Africa, where the demand is so great, pharma might have a difficult time picking up the slack. Without better
coordination of supply efforts, those hiccups can pose a real and present danger for patients that the drugs won't arrive
as planned.
Quality control Companies have to dedicate in-house resources to ensure that licensees maintain the promised quality. The big concern is that
poor-quality drugs will lead to increased resistance. Secondary concerns are that low-quality licensed generics might dilute
brand value or harm companies' reputations.
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