[Ip-health] Hepatitis C drug affordability

Mohga Kamal-Yanni mkamalyanni at Oxfam.org.uk
Sun Feb 1 08:18:46 PST 2015


The new generation of highly effective medicines to treat hepatitis C 
offers new hope for those affected, but the high prices of these drugs 
block countries from integrating them into their treatment programmes. The 
same obstacle was present at the outset of the HIV/AIDS crisis until the 
entry of generic companies removed the price obstacle. 

WHO estimates that 135–150 million people are chronically infected with 
hepatitis C,1 80% of whom live in middle-income and low-income countries.2
 A third of people with chronic infections will develop liver cirrhosis or 
liver cancer.3 The mortality rate due to hepatitis C is estimated to be 
350?000 to 500?000 deaths per year. The disease prevalence is highest in 
east Asia, the Middle East, and north Africa. The following countries have 
a hepatitis C prevalence of more than 10%: Egypt (14%), Cameroon (13·8%4), 
Burundi (11·3%), and Mongolia (10·7%5). 

Hepatitis C is a curable disease. Not only can patients live without 
symptoms after successful treatment but their risk of developing 
hepatocellular carcinoma is also reduced by 75%.6 The new generation of 
direct-acting antiviral treatments, including sofosbuvir, semiprevir, 
ledipasvir, and daclatasvir, have a high cure rate of well over 90% and 
are effective against the difficult-to-treat genotypes. They have better 
safety profiles, minimum drug interactions, and treatment courses of 
shorter duration. One great advantage is that these drugs are orally 
administered. Drug combinations (sofosbuvir with ledipasvir or 
daclatasvir) achieve higher cure rates even for patients with cirrhosis. 

However, these medicines are beyond the means of millions of patients. 
Even in the USA, a heated debate has occurred about the high price of 
sofosbuvir (US$85?000–110?000). Some insurance companies have decided to 
ration the medicine for specific patients. Concerns have also been raised 
about the extra burden to the public system (Medicaid and Medicare). In 
Europe, concerns regarding price led 13 European countries to collectively 
negotiate prices. The French health minister warned that such high prices 
would impose an unacceptable burden on the social security system, 
affecting all users.7 

Clearly, these prices are not affordable in developing countries. Some 
governments have begun to negotiate lower prices. Egypt declined to grant 
a patent for sofosbuvir and negotiated with Gilead, the producing company, 
to reach a special price of $900 for 12 weeks of treatment in government 
clinics, but treating 5 million patients of an estimated 11 million 
infected people will still cost Egypt $4·5 billion of the $7·22 billion 
total health budget for 2014–15.8 

The unprecedentedly high prices being charged for new hepatitis C drugs 
mean that few patients can benefit and no national population-wide public 
health benefit can be planned for in affected countries; yet a study by 
Liverpool University showed that the cost to manufacture a 12-week course 
of sofosbuvir can be as low as $100–250.4 

Several mechanisms have been used to lower the prices of HIV medicines, 
with varying degrees of success. 
Tiered pricing—ie, a system by which countries are divided according to 
their national income and a price is decided for each country tier—is 
favoured by pharmaceutical companies because it retains their control of 
prices. This mechanism ignores the fact that most of the world's poor 
people live in middle-income countries where tiered prices are 

Another mechanism is voluntary licensing, whereby the patent-holder 
licences the medicines to one or more generic companies; however, 
voluntary licences are not transparent and usually come with conditions 
that might limit production or price reduction. In September, 2014, Gilead 
issued voluntary licences to seven Indian generic companies to produce 
sofosbuvir and market it in 91 countries. Although this licence should 
induce generic competition and thus promise to decrease the price, there 
are limitations of its use. For example, the licence excludes key 
countries such as China and Brazil. The Medicines Patent Pool is an 
independent foundation to which companies surrender their intellectual 
property rights voluntarily; the foundation then issues sublicenses to 
generic companies to compete in the production of low-priced medicines in 
return for a royalty payment. This mechanism has negotiated transparent 
licenses that are better than individual companies' licences. 

Compulsory licensing is a legal instrument that allows governments to 
break a patent and allows generic companies to produce and market a 
medicine at an affordable price, paying royalties to the originator 
companies. This mechanism has been used by Thailand and Brazil for 
antiretroviral medicines. 
Other Trade Related Aspects on Intellectual Property Right (TRIPS) 
flexibilities include pre-grant opposition used by Indian and recently by 
Argentinean public health advocates to stop patents of medicines.10
 Generic competition allows price competition through the entry of several 
manufacturers when patents are not granted, have expired, or have been 
voluntarily or compulsorily relinquished. 

In 2001, the introduction of generic medicines reduced the price of triple 
antiretroviral therapy from $12?002 to less than $100 per patient per 
year, which enabled 10 million people to receive antiretroviral treatment 
(figure).12 The first generation of antiretrovirals was manufactured 
mainly by Indian companies because India had not at that time implemented 
the TRIPS. 

Effect of generic competition on price reduction and numbers of patients 
accessing ARVs in Uganda 
Reproduced from an Oxfam Briefing Paper on generic competition, price and 
access to medicines,11 by permission of Oxfam. ARV=antiretroviral. 
JCRC=Joint Clinical Research Centre (the largest provider of ARVs in 
View Large Image | Download PowerPoint Slide

However, generic competition is at risk because most countries have 
implemented TRIPS and are entering into free-trade agreements that make it 
difficult to use TRIPS flexibilities, such as compulsory licensing. 

Learning from the situation with HIV, sustained affordable medicines for 
hepatitis C cannot be achieved without generic competition. Countries can 
legally use TRIPS flexibilities, such as compulsory licensing, to enable 
generic competition. Other mechanisms such as tiered pricing and voluntary 
licensing must allow generic competition without conditions. 

The article was researched and written as part of my normal work for 
Oxfam. I declare no competing interests. 

1.        WHO. Hepatitis C Fact sheet No 164. 
http://www.who.int/mediacentre/factsheets/fs164/en/;April, 2014. 
((accessed July 16, 2014).) View in Article  
2.        Jayasekera, CR, Barry, M, Roberts, LR, and Nguyen, MH. Treating 
hepatitis C in lower-income countries. N Engl J Med. 2014; 370: 1869–1871  
View in Article  
3.        WHO. Guidelines for the screening, care and treatment of persons 
with hepatitis C infection.
http://www.who.int/hiv/pub/hepatitis/hepatitis-c-guidelines/en/; 2014. 
((accessed July 20, 2014).) 
View in Article  
4.        Hill, A, Khoo, S, Fortunak, J, Simmons, B, and Ford, N. Minimum 
costs for producing hepatitis C direct-acting antivirals for use in 
large-scale treatment access programs in developing countries.Clin Infect 
Dis. 2014; 58: 928–936 
View in Article  
5.        Lavanchy, D. Evolving epidemiology of hepatitis C virus. Clin 
Microbiol Infect. 2011; 17: 107–115 
View in Article  
6.        Morgan, RL, Baack, B, Smith, BD, Yartel, A, Pitasi, M, and 
Falck-Ytter, Y. Eradication of hepatitis C virus infection and the 
development of hepatocellular carcinoma: a meta-analysis of observational 
studies. Ann Intern Med. 2013; 158: 329–337 
View in Article  
| CrossRef 
| PubMed 
7.        Agence France-Presse. EU nations join forces against 
‘exorbitant’ hepatitis C drug.
;July 10, 2014. ((accessed July 18, 2014).) 
View in Article  
8.        Aggour, S. FY 2014/2015 state budget announced, analysts weigh 
in Daily News Egypt.
; May 26, 2014. ((accessed July 19, 2014).) 
View in Article  
9.        Moon, S, Jambert, E, Childs, M, and von Schoen-Angerer, T. A 
win-win solution?: A critical analysis of tiered pricing to improve access 
to medicines in developing countries. Global Health.2011; 7: 39 
View in Article  
10.        Patent Opposition Database. Argentinian community of people 
living with HIV file pre-grant opposition against Gilead and BMS's 
“ATRIPLA” patent.
; Dec 4, 2013. ((accessed July 18, 2014).) 
View in Article  
11.        Oxfam. Generic competition, price and access to medicines: the 
case of antiretrovirals in Uganda. Oxfam Briefing Paper 26. 
. ((accessed Dec 29, 2014).) 
View in Article  
12.        WHO, UNICEF, and UNAIDS. Global update on HIV treatment 2013: 
results, imapcts and opportunities.
; June, 2013. ((accessed July 17, 2014).)

Best wishes مع أطيب التحيات
Mohga (Dictating to the computer so please forgive silly mistakes) 
Mohga M Kamal-Yanni
Senior health & HIV policy advisor, Oxfam GB
John Smith Drive, Oxford, OX4 2JY, UK (GMT, CET-1, EDT+5, EST+6)
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