[Ip-health] Update on Hain Lifescience's DR-TB diagnostic tools

Sharonann Lynch sharonann.lynch at gmail.com
Thu Aug 15 09:00:10 PDT 2013


Dear all, 

Please find below, and forward to your networks, an update regarding the
call to action circulated by MSF for Hain Lifescience to revise its pricing
of its latest version of the GenoType MTBDRplus rapid diagnostic for
multi-drug-resistant tuberculosis.

Thank you,
Sharonann


15 August 2013
 
 
Dear colleagues
 
Thank you for supporting the call from MSF asking Hain Lifescience to
reconsider its price rise for the latest version of the GenoType MTBDRplus
rapid diagnostic for multi-drug-resistant tuberculosis.
 
The strong, enthusiastic support from the TB community has already had an
impact, leading to a meeting and productive discussions with Hain
Lifescience to address the concerns with the pricing of Genotype® MTBDRplus
version 2, as outlined in the letter.  Attending the meeting was Mr David
Hain and representatives from WHO, GDF, FIND and the MSF Access campaign.
 
The letter (full text below), signed by more than 50 organizations, was
presented to Hain Lifescience during the meeting, which took place Friday, 2
August.  The main outcomes of the meeting are summarised below.
 
* Agreement for increased transparency of the pricing structure for the
MTBDRplus version 2 with publication of the breakdown of the bundled
pricing.  There is now a clearer pricing structure for MTBDRplus version 2.
Based on what was communicated during the meeting, the breakdown is as
follows: 
-     EUR 3.30 per test for reagents and consumables (ex-works price), not
inclusive of shipping costs; and
-     EUR 4.20 per test for support and services fees.

 
* Clarification on what is to be included in the service and support fee,
specifically - installation, training, after sales service, support,
instrument maintenance (including calibration) and upgrades.

* Hain Lifescience has agreed to undergo a cost assessment for the MTBDRplus
version 2 test to be carried out by an independent third party and paid for
by UNITAID within their timeline as required.
 
Additionally, the following points were also discussed with Hain Lifescience
as follow on steps.  Please note that not all these points have been fully
agreed upon (e.g points 2 and 3).
 
1.     Hain Lifescience has offered to put back on the market the MTBDRplus
test version 1 at the cost of EUR 3.30 per test without Taq Polymerase and
not including service and support fees.  The company¹s responsibility ends
once the test is shipped to the user.

2.     Stakeholders and manufacturer have discussed the possibility to
consider a decrease in overall cost for service and support linked to
specific proficiency criteria for or the volumes used by the user
laboratories.  This has to be discussed and developed in a wider stakeholder
meeting.

3.     Hain Lifescience remains reluctant to unbundle the service and
support fees from the cost of version 2 of the test.  Mr Hain is not
convinced of the suggestion from MSF and others to slightly increase the
price related to reagents and consumables (to EUR 4 per test) and to include
the service and support fees into a yearly service contract, but he is open
to further discussions on this point.

4.     Hain Lifescience has presented the overall volumes of the test
currently purchased worldwide by organizations, governments and institutions
for the public sector at FIND-negotiated prices.  In order to reach the next
price reduction of EUR 6.60 per test, the company requires a global annual
volume of 750,000 tests to be procured.  For 2013 such volume is expected to
be short by approximately 150,000 tests.  Partners of the EXPAND-TB project
and other stakeholders will assess the different possibilities to increase
the volumes of the tests currently procured.

5.     A stakeholders meeting will be organized by FIND (October 2013) to
discuss the mid-term possibilities together with key stakeholders.
 
Overall the meeting resulted in progress in comparison to MSF and others¹
earlier meetings with the company and there is now a commitment to identify
strategies that can adequately meet the needs of the different implementers.
As there are still some unresolved issues, and the need to work on the
detail of some of these proposals, we encourage the TB community to continue
to monitor further developments.
 
FIND has agreed to organize a stakeholder meeting during the fall to discuss
the possible mid-term solutions outlined above.
 
If you have further questions or comments regarding the outcomes of this
meeting or the issues moving forward from MSF's point of view, please feel
free to contact us.
 
In the meantime, we hope all manufactures will make a positive move to
become more transparent with pricing structures and follow 'best practices'
regarding aggregating support and service costs into a one-off yearly
service contract, rather than bundling such fees as part of the per test
pricing.
 
Sincerely,

Dr Manica Balasegaram
Executive Director
Médecins Sans Frontières Access Campaign

----------------------------------------
 

2 August 2013
 
Dear Mr Hain, 
 
We wish to bring to your attention our concerns about the preferential price
established for the new version of the Genotype® MTBDRplus (version 2).  The
preferential price, which has more than doubled compared to the old test,
represents an unacceptably steep increase, which will have serious
consequences on the budgets of TB projects.  We believe common- sense
changes to the pricing scheme could reduce prices while ensuring Hain earns
a fair return for its investment.
 
Worldwide, MDR-TB is being increasingly recognised as a public health
emergency.  Access to rapid DST represents a critical tool for the
implementation of successful TB control programs.  The drastic increase in
price for Genotype MTBDRplus will introduce a barrier to diagnosis and
treatment of TB.
 
In prior conversations, the company has justified the price increase for
three reasons.  These justifications are not satisfactory.
 
Firstly, your company has indicated that a price increase is justified due
to significant technological improvements in the follow-on version of the
test.  We acknowledge these improvements on the new version of the test,
including improved performance of the test on smear negative specimens,
inclusion of DNA polymerase enzyme in the amplification mix and improvements
on reagent stability.  The most relevant added value of these improvements
could be the better performance of the test on smear negative specimens.
National TB programmes and most NGOs, however, can not exploit this
improvement since WHO policy still recommends use of Line Probe Assays for
smear positive specimens only, and to our knowledge there are no plans to
revise these recommendations in the near future.
 
Secondly, your company has justified a higher price by bundling the cost of
the test with installation and training.  We disagree with this pricing
arrangement. As stated on the FIND website, the prices for the assay include
training and installation costs (in addition to a separate maintenance and
service contract for the instrumentation).  The pricing should be
transparent.  
 
This pricing is also unnecessarily expensive ­ installation only happens
once and training needs and services costs will differ significantly from
site to site.  We agree that that there must be mechanisms that guarantee
rapid and efficient access to training and technical support services, but
adding services costs to each order is not necessary.  If a need for further
training and frequent technical support is identified, customers should be
given the option to agree on additional services separately and costs should
be included in service contracts rather than into the price of reagents.
 
Thirdly, your company has indicated that insufficient volume requires higher
prices to recuperate costs.  We agree that the 3.50 euro per test price for
the first version needed to be revised and recalculated based on a more
realistic volume.  Improving demand forecasting and take-up is a worthwhile
goal and should be used to mitigate your risk.  However, integrating
unnecessary training and services into the cost of the diagnostic to
safeguard against low volume is not appropriate.  We are ready to work with
Hain to identify ways to improve demand forecasting and volume, but only if
the price of the diagnostic can ensure uptake.
 
In the light of the facts stated above we urge Hain to reconsider its
pricing strategy and
 
1.     Make the pricing of Genotype® MTBDRplus (version 2) more transparent
2.     Separate the costs for service from the cost of the reagents
3.     Lower the price for Genotype® MTBDRplus (version 2) to a level that
ensures access to this technology in poor countries
 
We commend Hain for developing a new version of the test.  However, unless
the technology is affordable, it cannot make a difference in the lives of
people suffering from MDR-TB.  The budgets of non-governmental organisations
and national TB programs simply cannot afford this price. We hope that Hain
reconsiders its approach to pricing.
 
Sincerely,
 
Manica Balasegaram, Executive Director, MSF Access Campaign
 
Frank Dörner, Executive Director, MSF Germany
 
[END OF BODY OF LETTER]


-- 
Sharonann Lynch
HIV/AIDS Policy Advisor
Access to Essential Medicines Campaign
Médecins Sans Frontières (MSF)
US mobile: +1 646 824 3066
Email: sharonann.lynch at gmail.com









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