WHO Report Compares Prices, IP Status Of HIV Treatment In Middle-Income Countries

A new report from the World Health Organization concludes that prices of HIV treatments vary greatly between middle-income countries (MICs), often depending on patent landscape, licensing agreements, whether drugs were sourced from originator companies, and regulatory approval. For third-line treatments, the price of drugs remains a challenge for all, with newer products more likely to be patented in key countries of production.

The report titled “Increasing Access to HIV Treatment in Middle-Income Countries: Key data on prices, regulatory status, tariffs and the intellectual property situation,” was published by WHO this week, and is available here.

It was originally developed for a Consultation on Access to HIV Medicines in Middle-Income Countries, held in June 2013 in Brazil, co-hosted by the Brazilian government, UNAIDS and the WHO. The report is not directly tied to an agenda item at next week’s World Health Assembly.

The report assesses the accessibility of affordable treatments for HIV in 20 middle-income countries, where a greater number of poor people live than in low-income countries, based on the World Bank classification. This is important because “international aid and assistance, however, still focuses on low-income countries,” says the report.

It compared prices of WHO-recommended medicines with the patent status of each drug, including any voluntary or compulsory licence agreements, and other determinants of prices and accessibility such as regulatory approval, tariffs, markups, and taxes.

The aim of the report was to “look at for which drug and for which country you have an issue,” Peter Beyer, senior advisor at the WHO Public Health, Innovation and Intellectual Property department, told Intellectual Property Watch. “You look at the data, identify the problem on a drug-by-drug base, on a country-by-country base, and then every country can look at potential solutions.”

“Access to medicines is a critical element for Universal Health Coverage,” he said. “We want to move away from a too ideological debate and instead look at really where we have access issues, and then deal with them.”

The analysis found significant variation in the prices of antiretroviral drugs (ARVs) between countries for first-line and some second-line treatments, but all countries paid very high prices for third-line drugs, even where originator companies offered reduced prices.

Countries such as India that are supported by the Global Fund to Fight AIDS, Tuberculosis and Malaria paid low prices, whereas eastern European countries, some South American countries, China and Thailand paid high prices. In these latter countries, the patent status of drugs “may prevent the countries from purchasing generic versions,” the report said. It is “a major cost driver” when drugs are sourced from the originator producer. However, even in Brazil where some drugs were domestically produced, prices remained high.

Third line ARVs, new products and those in the pipeline are increasingly being patented in India and China, both primary producers of active pharmaceutical ingredients (APIs) and generic products for export as well as domestic use. Therefore, no generic versions are available even for countries where there are no patents, and local production of these APIs in these countries “is beyond the capacity of most manufacturers in these countries,” says the report.

“The small market for third-line drugs is also likely to contribute to higher prices in comparison to first- and second-line drugs,” it adds.

The patent status of new drugs “may have a significant impact on the competitive procurement of these new ARVs in the future, unless the patent holders will grant licences for their manufacture and sale,” says the report.

The report also provides a list of compulsory licences used by some countries, and reiterates the WHO and UN recognition of the use of such flexibilities under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for import or local production of generics.

Compulsory licensing can additionally be used as bargaining power for price negotiations said the report, adding that strict patentability criteria can limit the granting of secondary patents on fixed-dose combinations or paediatric versions of existing drugs.

A major factor that affects availability aside from IP rights are delays in the regulatory approval of drugs, which in turn can limit competition for the time that only one supplier has regulatory approval. This potentially leads to a “negative impact on procurement prices,” says the report. Data exclusivity laws, and lack of interest by some manufacturers of getting approval for products in certain markets play a role in this.

Tariffs are unlikely to play a major role in prices of ARVs, although more information was needed relating to markups and taxes, which often are a major cost driver, said the report.

Although the report does not produce recommendations per se, it does suggest certain measures that could put countries in the right direction. These include registering available generic products, switching to cheaper combinations, monitoring patent status of drugs and making use of TRIPS flexibilities such strict patentability standards and voluntary and compulsory licensing where required.

As newer drugs are more widely patented, the report says that countries will have to explore options to ensure access to these products. One solution may lie in current licencing negotiations taking place through the Medicines Patent Pool.

Licences have been agreed in at least some of these countries for generic production and sale of new products. However, the ability to produce or import generic products very much depends on whether a certain country is part of the geographical scope of licencing agreements, and it is likely that some countries will be left out of future negotiations, says the report.

“Increasing information exchange on the prices and their determinants” of ARV drugs is also encouraged. The WHO produces information on the price, regulatory status and production capacity of key products, and the MPP on patent status.

“Transparency,” the report says, “is a first step towards the definition of an individual price reduction strategy.”