Source: Global Health Checkup
31 July 2014
It’s not very often that we hear of a new medicine that actually cures a serious disease. This year, World Hepatitis Day comes with the exciting news of sofosbuvir; the new hepatitis C medicine with a cure rate of over 90%. Sofosbuvir can be used on its own in the form of one pill per day for 12 weeks. Existing treatments rely on a combination of daily oral ribavirin and weekly Interferon injections for around 48 weeks. The effectiveness of these old medicines is far below 90%, and they also carry painful side-effects in addition to the hassle associated with weekly injections.
So a new cure is good news? Unfortunately there is a big catch. The medicine is not affordable, even in high income countries. At the current price US $1000 per pill, the US public purse may have to pay over US $300 billion if the 3 million infected people are to be treated. For example, it would cost the state of Oregon $360 million to treat its infected population. This would deplete the $377 million that the Oregon Medicaid program spent on all prescription drugs for its 600,000 members in 2013. US insurance companies are rationing treatment and are telling doctors not to offer the medicine for all the patients that need it – keeping it only for very specific cases.
The situation in Europe is not much better. The cost of a 12-week treatment is €50,000 (US$68,000). The French health minister warned that such a high cost would have a negative impact on the French social security system, and called on the EU to collectively negotiate a lower price for sofosbuvir.
If cost is a major problem in the wealthier countries, then the impact of treatment price in middle-income and low-income countries will be even more dire. The majority of hepatitis C infected people – 80% – live in these countries. Countries with an infection prevalence rate higher than 10% are: Egypt at 14%, Cameroon 13.8%, Burundi 11.3%, and Mongolia 10.7%.
Clearly, none of these countries can afford the current high price. Gilead has entered into a deal with the Egyptian government to provide a 12-week course of treatment at US $900 per patient for the public sector. At 14% prevalence in a population of over 82 million people, the potential number of people living with hepatitis C in Egypt is around 11.5 million. To treat even just 5 million patients would cost Egypt the equivalent of nearly two-thirds of its total health budget (US $4.5 billion out of the current total health budget of US$ 7.22 billion for 2014/15). This cost is in addition to other drugs – pegylated interferon and ribavirin – which are needed in combination with sofosbuvir to reach the 90% cure rate for genotype 4, which is the strain of hepatitis C prevalent in Egypt.
Yet the price does not have to be this high, as illustrated in two ways. Firstly, a study by researchers at Liverpool University looked at the total real cost of the active pharmaceutical ingredients and the cost of manufacturing of the new direct anti-viral medicines class, of which sofosbuvir is one. They estimated the cost of a 12-week course of treatment with the combination of sofosbuvir and daclatasvir as US $78 per person.
Secondly, evidence shows that the price of medicines is slashed by generic competition. HIV treatment is a case in point: in 2000, at the height of the public outcry campaign against high medicine prices, it was very difficult to persuade any government or donors to pay for treatment, and millions of people in poor countries were left to die. The price of triple therapy for HIV was US $10,000 per patient per year. That was clearly unaffordable to patients, governments, and donors at the time. Thanks to generic competition from Indian companies, the price dropped almost overnight to US $360 per patient per year or US $1 day. Continuation of competition has resulted in the current price of triple therapy for HIV of approximately US $100 per patient per year.
Now that Trade Related Aspects of Intellectual Property Rights (TRIPS) is implemented in almost all countries, including those with manufacturing capacity such as India, it is much harder to scale up generic competition. However, TRIPS includes some flexibilities, which countries can use to help lower prices. For example, India’s patent law has a clause on “pre-grant opposition”, which allows any interested groups to challenge a patent application before the patent is granted. Civil society organisations have used this clause for sofosbuvir and therefore currently, it does not have a patent in India (although the final decision is awaiting a court ruling).
Compulsory licensing is an important legal TRIPS tool for governments to ensure affordable prices of new medicines. Use of this tool in India decreased the price of sorafenib (Nexavar) for the treatment of liver and kidney cancer from over US $5,500 per month to US $175. In 2008, Thailand issued compulsory licenses for 3 cancer medicines, leading to a big drop in prices. For example, the price of one tablet of 2.5 mg of letrozole was slashed from the original Novartis price of US $£7.35 to the generic price of US $0.19-0.22 – a price differential of 30 times.
Obviously pharmaceutical companies and rich countries who support them do not like any government using this legal TRIPS tool. When Thailand issued compulsory licenses for medicines to treat HIV, cardiovascular disease, and cancer, it came under tremendous pressure from the US and the EU to stop. Last year there was pressure by US businesses and Congress for the US government to take actions against India over its intellectual property regime.
The fundamental problem is the system of intellectual property rules which allows big companies to hold a monopoly on the price of medicines, thus giving them the power to set high prices. Moreover, financing for research and development (R&D) is still dictated by commercial interests rather than public health needs all over the world. Pharmaceutical companies are ferociously lobbying for stricter and stricter intellectual property protections as the only way to stimulate R&D and to ensure they can maintain their monopoly to set prices.
The price of the new hepatitis C medicine has given more momentum to the rising global movement that is challenging the high prices of new effective medicines for diseases ranging from cancer to cystic fibrosis. As long as the cost of R&D is linked to drug pricing, pharmaceutical companies will continue to price medicines to ensure maximum profit, even if it means decreased access for people who need it. This is a public health travesty. .
The un-affordability of the most effective medicine that can cure hepatitis C today highlights the critical need to de-link financing for R&D from the price of medicines, and for finding new ways to finance R&D so that effective medicines are available at an affordable price to all who need them.