1,000-Fold Mark-Up for Drug Prices in High Income Countries Blocks Access to HIV, HCV and Cancer Drugs

By Simon Collins

From HIV i-Base

 

October 24, 2016

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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)
entecavir	15,111	427.00	36.00	Expired
Hepatitis C direct acting antivirals (DAAs) (3 month course)
sofosbuvir	49,680	324	62
daclatasvir	50,653	153	14
sofosbuvir + ledipasvir	56,700	507	96
sofosbuvir + velpatasvir	74,760	--	181-216
HIV antiretrovirals (annual cost)
abacavir/3TC	18,600	161	161	Dec 2016
tenofovir/FTC	21,120	67	67	Jul 2017
efavirenz/TDF/FTC	34,428	110	110	Dec 2017
efavirenz	12,120	36	38	Expired
nevirapine	7,776	28	28	Expired
rilpivirine	12,900	--	40	2021
atazanavir	19,872	219	219	2018
darunavir	19,584	--	658	2018
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
lapatinib	75,161	18,603	4020	Breast cancer
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.


Comment


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


References

1. Hill A. Treatment for cancer, HIV and viral hepatitis in Europe using low cost generic drugs: what could be done? HIV Glasgow, 23-26 October 2016, Glasgow.
2. GBD 2013 Mortality and Causes of Death Collaborators. Global, regional, and national age -- sex specific all-cause and cause-specific mortality for 240 causes of death, 1990-2013: a systematic analysis for the Global Burden of Disease Study 2013. Lancet. 2015; 385: 117-171. http://dx.doi.org/10.1016/S0140-6736(14)61682-2.
   www.thelancet.com/journals/lancet/article/PIIS0140-6736(14)61682-2/fulltext
3. India Info Drive. Global export import data.
   www.indiainfodrive.com
4. Nwokolo N et al. InterPrEP: internet-based pre-exposure prophylaxis (PrEP) with generic TDF/FTC in London -- analysis of pharmacokinetics, safety and outcomes. HIV Glasgow, 23-26 October 2016, Glasgow. Oral abstract ???
5. Hill A et al. High sustained virological response rates using imported generic direct-acting antiviral treatment for hepatitis C, imported into Australia, UK, Europe and North America. HIV Glasgow, 23-26 October 2016, Glasgow. HIV Glasgow, 23-26 October 2016, Glasgow. Poster abstract 256.
6. Hill A et al. Efficacy of generic direct-acting antiviral treatment for hepatitis C, imported into Russia and Eastern Europe. HIV Glasgow, 23-26 October 2016, Glasgow. Poster abstract 261.
7. Citizens for Tax Justice, 2016.
   http://gormanandjoneslaw.com/offshore-tax-havens http://america.aljazeera.com/articles/2015/3/12/obama-gambit-for-corporate-cayman-cash.html
8. Hill A et al. Mass treatment programmes for HIV and hepatitis. Presented at ITPC satellite session MOSA3301.
   http://programme.aids2016.org/Programme/Session/1063
9. Hill A et al. Predicted saving to the UK National Health Service from switching to generic antiretrovirals: 2015-2019. International Congress of Drug Therapy in HIV Infection, 2-6 November 2014, Glasgow. Oral abstract 0-216.
   www.jiasociety.org/index.php/jias/article/view/19497

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