[Ip-health] Financial Times: Gilead combats wider distribution of cheap drugs from EM

Shailly Gupta shailly.gupta at geneva.msf.org
Sun Apr 12 23:56:01 PDT 2015

 <http://www.ft.com/cms/s/0/ce7f059a-d86c-11e4-8a68-00144feab7de.html#ixzz3XAYQqEMy> http://www.ft.com/cms/s/0/ce7f059a-d86c-11e4-8a68-00144feab7de.html#ixzz3XAYQqEMy

Under fire over the high price of its hepatitis C treatment Sovaldi,  <http://markets.ft.com/tearsheets/performance.asp?s=us:GILD> Gilead decided last year to make the drug available in 91 developing countries for $300 per bottle, or $900 per 12-week course — just 1 per cent of the medicine’s  <http://www.ft.com/intl/cms/s/0/7e3571da-b08c-11e4-92b6-00144feab7de.htmlaxzz3W3sQpynz> $1,000 per pill US sticker price.


According to the US-based biotech company, its decision — which permits a clutch of selected Indian drugmakers to produce and sell  <http://www.ft.com/intl/cms/s/0/328605ce-3cd8-11e4-9733-00144feabdc0.htmlaxzz3W3sQpynz> generic versions of Sovaldi in those markets — will give affordable access to the potentially life-saving treatment to patients in the world’s poorest countries.


But as the first Indian-made generics start to roll off the production lines, Gilead is coming in for heavy criticism. Médecins Sans Frontières, the medical charity, is accusing the US group of promoting overly-intrusive patient surveillance to stop the generic, called sofosbuvir, being diverted to people in developed countries where the drug is  <http://www.ft.com/intl/cms/s/0/78372320-ac02-11e4-b05a-00144feab7de.htmlaxzz3W3sQpynz> more costly and tightly rationed by strained public health systems.


Sofosbuvir is therefore becoming a test of big pharma’s ability to sell drugs at widely divergent prices in different parts of the world. It comes at a time when the industry is attempting to defend hefty profit margins in rich countries while providing affordable access to treatments in the developing world.


Leena Menghaney, head of MSF’s drug access campaign in South Asia, says people in developed countries — where expensive treatments are reserved for the sickest first — will be aware of the price differential with emerging markets. “There are bound to be patients on the waiting list who think they should get on a plane and get access before they get really sick.”


Gilead, she says, is “trying to turn the Indian generics makers into their police to police the system”.


Its hepatitis C medicine is an extreme case, because it involves an especially high-priced drug to treat a disease that is widespread in poorer countries. However, similar situations are sure to arise as global drugmakers focus on more specialist and high-priced therapies while a growing middle class in the developing world demands access to modern medicines.

In recent years, many western drug companies have introduced “tiered global pricing” for patented drugs to treat diseases such as cancer and diabetes, making medicines available to patients at slight discounts in emerging markets such as India.


Such price differentials are not wide enough to trigger western patient interest in procuring medicine from abroad, as most are able to access the drugs through insurance or public health schemes.


But the October 2000 drama of South African HIV/Aids activists arriving in Thailand and publicly buying suitcases full of a low-cost generic version of the drug Fluconazole to take back home — where the medicine was too expensive to be within reach of many who needed it — is a cautionary tale of what can happen when cost differentials between different countries grow too wide.


Gilead denies requiring Indian generics companies, and their distributors, to collect and maintain records of all patients purchasing the drug in India, but says it has asked generic companies to take reasonable steps to deter large-scale “diversion” of the medicine to other countries.


“We are not going to prevent people coming and bringing a couple of bottles or even a box back in their suitcase, or a person from the US or  <http://www.ft.com/intl/cms/s/0/c9454248-9db5-11e4-8946-00144feabdc0.htmlaxzz3W3sQpynz> Europe coming and seeking to access the product,” says Gregg Alton, Gilead’s executive vice-president for corporate and medical affairs.


“We are trying to do something practical that enables simple, easy access in the countries where we intend the product to be used, and can have some impact on preventing broad, widescale diversion.”

Executives at Indian drugmakers say that Gilead had been pushing for strict surveillance over sofosbuvir use in India — where the generic versions have just been launched.

In addition to asking companies to collect patient data — which is highly sensitive in a country where many hepatitis C sufferers are also infected with HIV — the company had initially wanted patients to return empty bottles of their medicine before they received the next batch.


This requirement is in force in Pakistan, where most low-price sofosbuvir is dispatched directly to patients through a courier system, bypassing pharmacies.

But Gilead has since softened its stance in India following “pushback” from activists and the generics companies themselves.

“They were trying to say, ‘keep tabs on every patient’ and pushing pretty hard on how to do anti-diversion,” explains the chief executive of one Indian-generic group authorised to sell the medicine in emerging markets. “In the end, sensing the ground realities in a country such as India, I think they have mellowed.”


Denis Broun, public access and global affairs director for Mumbai-based Cipla — another of the sofosbuvir licensees — said many of Gilead’s proposed anti-diversion measures were unfeasible, given India’s size, highly-fragmented drug distribution channels and regulations barring companies from dealing directly with patients.

These measures also threatened to become barriers to access for genuine patients. “With these promises, we would be using a sledgehammer to kill a fly when we are not even sure the fly exists,” Mr Broun said.

However, he added that Cipla is asking distributors to ensure sofosbuvir purchasers have valid prescriptions from Indian doctors, and it plans to regularly monitor the general flow of the drug.


“It is very difficult to ask manufacturers to take responsibility for diversions,” Mr Broun said, “but we see peaks in certain areas, then we are going to take measures to explain them, or discontinue the authorisation to the distributors.”


Nevertheless, Gilead’s attempts to monitor sofosbuvir use highlights the difficulty in trying to maintain a tiered global pricing structure in a world of easy mobility and communications.

Along with the prospect of some generic sofosbuvir reaching western patients, Gilead is concerned about the potential flow of  <http://www.ft.com/intl/cms/s/0/de1241cc-9c15-11e4-a6b6-00144feabdc0.htmlaxzz3W3sQpynz> Indian-made generics to 51 middle-income countries. These are countries that, combined, suffer a quarter of the global hepatitis C burden — but where the Indian generics groups are barred from selling, under the terms of their licence from Gilead.


Gilead aims to supply these middle-income countries — which include Brazil, China, and Thailand — at prices yet to be fixed. It is in talks with some governments to start national hepatitis C treatment programmes, which would allow for sale of the drug directly to health administrations. But many of these countries have not have approved Sovaldi, or sofosbuvir, for sale, as yet, which could lead patients to turn to India.


“Most of the diversion isn’t going to be to western Europe or the US,” Mr Alton predicts. “It’s going to be to eastern Europe and Asia . . . where you are going to have a lot of patients with some ability to pay that aren’t going to have access to product.”


As he fends off criticism of its anti-diversion efforts, Mr Alton also notes that Gilead is doing far more than rivals such as  <http://markets.ft.com/tearsheets/performance.asp?s=us:ABBV> AbbVie to make hepatitis C treatment available to the world’s poor. “We are trying to change the conversation to show that we can have intellectual property and provide access,” he says.


High price of health in the US


If there is one thing that drug companies and the people who foot the US’s healthcare bill can agree on, it is that Americans pay too much for medicines relative to other western countries. With only 4.6 per cent of the world’s population, the US is responsible for 33 per cent of global drug spending.


In the US, drug companies are mostly allowed to price their medicines according to what the market will bear, without interference from a national regulator. That freedom, the companies say, allows them to cover the considerable cost of developing and winning approval for new treatments, which now runs at $2.6bn per medicine, according to the Tufts Center for the Study of Drug Development.


But US patients, insurers and employers are struggling to cope with much higher healthcare bills and rampant drug price inflation. In 2018, drug spending per capita in the US will be $1,400, compared with about $750 in Canada, according to the IMS Institute for Healthcare Informatics.


The Affordable Healthcare Act originally included mechanisms to put a brake on increases in drug prices, but many were ditched to get the pharma industry to back President Barack Obama’s signature reform.


As a result, many Americans buy their prescription drugs from websites based in Canada and Mexico, in most cases without any repercussions, although the US drugs watchdog warns it cannot vouch for their safety.


Some US states have even tried to bypass high drug prices by importing drugs from abroad, most notably Maine, which had a law allowing residents and employers to buy medicines from pharmacies in Canada, the UK, New Zealand and Australia.


A federal judge struck down the Maine law earlier this year, prompting some senators, including veteran Republican John McCain, to introduce a new bill: the Safe and Affordable Drugs from Canada Act. Few expect it to be passed any time soon.



Shailly Gupta

MSF Access Campaign 

AISF Building, First Floor

Lajpat Nagar IV

New Delhi – 110024

Ph: +91-9899976108 

Skype : shailly.17 





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