[Ip-health] UNASUR proposes centralised purchase of hepatitis C treatments Olysio and Sovaldi for member states

Claire Cassedy claire.cassedy at keionline.org
Mon Apr 20 14:00:59 PDT 2015


https://www.ihs.com/country-industry-forecasting.html?ID=1065998943

UNASUR proposes centralised purchase of hepatitis C treatments Olysio and
Sovaldi for member states

Published: 4/16/2015
IHS Life Sciences perspective

Regional agency UNASUR is aiming to secure price discounts on Sovaldi
(sofosbuvir; Gilead Sciences, US) and Olysio (simeprevir; Janssen-Cilag,
US), generating savings and reducing the risk of compulsory licences or
price cuts.

Significance

The Union of South American Nations (UNASUR) has proposed the creation of a
fund to negotiate centralised purchases of the hepatitis C virus treatments
Sovaldi (sofosbuvir) and Olysio (simeprevir).

Implications

The initiative aims to secure some price discounts on these high-cost
treatments for its member states.

Outlook

Centralised drug purchasing of Sovaldi and Olysio would be a milestone in
the region in achieving savings. It could prove positive for the innovative
industry too, as centralised purchases could be an easier way to reduce
medicine prices in the region rather than compulsory licences and direct
government price cuts that have negatively affected the research-based
pharmaceutical industry.

The Union of South American Nations (UNASUR) has proposed the creation of a
fund to negotiate centralised purchases of the hepatitis C virus (HCV)
treatments Sovaldi (sofosbuvir; Gilead Sciences, US) and Olysio
(simeprevir; Janssen-Cilag, subsidiary of Johnson & Johnson, US), reports
Colombia's El Colombiano.

The intergovernmental union's initiative aims to secure some price
discounts on the high-cost treatments for its member states, Argentina,
Brazil, Bolivia, Colombia, Chile, Ecuador, Guyana, Paraguay, Peru,
Suriname, Uruguay and Venezuela. According to representatives of UNASUR
that met on 14 April in Quito, Ecuador, the coordination of efforts on the
negotiation of Olysio and Sovaldi prices is critical for securing access to
these highly effective drugs (above 90%) to treat HCV across South America.

Outlook and implications

The increased number of patients in the region infected with HCV and the
recent arrival of Sovaldi and Olysio to some Latin American markets such as
Brazil, where both of the innovative treatments have secured marketing
authorisation, has caused alarm in the UNASUR bloc regarding the impact
that these medicine may have on the public healthcare budgets and patients
that must pay out of pocket (see Brazil: 31 March 2015: Brazil's Anvisa
issues marketing authorisation for Gilead Sciences' Sovaldi and Brazil: 12
March 2015: Brazil's Anvisa issues marketing authorisation for Janssen's
hepatitis C treatment Olysio, still analysing Sovaldi).

Achieving an agreement on centralising purchase of these HCV treatments
would be a significant milestone as it would be the first time that this
mechanism has been put in place in the region to negotiate discounts on an
innovative medicine. Centralised drug purchasing systems for the ministries
of health of member states would be positive in terms of achieving savings
at a regional level, and is part of a strategic plan implemented by UNASUR
that is aimed at securing access to innovative medicines at affordable
price (see Latin America: 16 October 2014: UNASUR to create medicine prices
bank to compare South American countries with international markets).

Although centralised procurement would inevitably impose downward pressure
on pharmaceutical prices, pharmaceutical companies may see it as a
preferred option in principle compared with compulsory licensing, which
they have been exposed to in some Latin American countries (Ecuador,
Colombia, and Argentina). However, unlike compulsory licensing, which is
typically limited to a selection of medicines, centralised purchasing would
affect a higher number of pharmaceutical products, thereby exposing pharma
firms to a more pronounced negative impact on revenue.

However, it is important to highlight that these price negotiations can
take some time; even in developed markets such as Spain the process takes
several months and even after a price discount is agreed, the Spanish
government has had difficulties in funding the medicines through the
National Health System.

One notable positive is that the pharmaceutical companies that produce
Sovaldi and Olysio have shown a collaborative approach to these kinds of
negotiations, especially with developing nations. For example, last year
Gilead agreed to allow the manufacture and marketing of low-cost generic
versions of Sovaldi in 91 developing countries (see United Status: 16
September: Gilead licenses Sovaldi to seven generics manufacturers in 91
markets). Additionally, for Gilead and Janssen-Cilag, a centralised
purchase of medicines with UNASUR members would be very positive due to the
high number of patients infected with HCV in South America. According to
the Latin American Network for Access to Medicines, Brazil is the most
affected in the region, with 2,609,670 patients, followed by Argentina
(with 743,750), Colombia (425,191), Peru with 284,100, and Venezuela
(272,976).



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