[Ip-health] MSF concerned over proposed Global Fund shake-up to drug pricing framework; risks middle-income countries paying more

Joanna Keenan-Siciliano joanna.l.keenan at gmail.com
Mon Dec 2 07:11:14 PST 2013

Proposed shake-up to drug pricing framework risks middle-income countries
paying more

Concerns over Global Fund-led changes to a model which enables affordable
scale up of HIV treatment


Geneva/New York, 2 December 2013 – Ahead of the Global Fund replenishment
conference in Washington, DC this week, international medical humanitarian
organisation Médecins Sans Frontières (MSF) has warned the Global Fund to
Fight AIDS, Tuberculosis and Malaria of the consequences of spearheading a
new pricing initiative that could result in middle-income countries paying
significantly higher prices for medicines to combat diseases, including HIV
and tuberculosis.

“MSF programmes are already seeing how middle-income countries like
Ukraine, Honduras, or Thailand pay exorbitant prices for drugs and vaccines
because of the tiered pricing policies pursued by pharmaceutical
companies”, said Rohit Malpani, Director of Policy and Analysis for MSF’s
Access Campaign. “The ‘middle-income’ label shouldn’t hide the fact that
the majority of the world’s poor actually live in these countries, which
often face huge burdens of diseases such as HIV and TB. The fact that the
Global Fund is considering locking countries into bad deals that could see
them paying higher prices is extremely concerning. ”

In a report to the Board of Directors ahead of this meeting, new Global
Fund Executive Director Mark Dybul announced a new initiative and creation
of a taskforce to ‘develop a framework on multiple pricing and royalty
tiers for health commodities’. The idea would cement tiered pricing for
medicines and vaccines, and likely be adopted by other global health
agencies like the GAVI Alliance, for vaccine prices.

‘Tiered pricing,’ the practice of selling drugs to different countries at
different prices depending on their socio-economic status, allows
pharmaceutical companies to maximise profit in all countries, as prices are
determined according to the highest a country is prepared to pay. With
their emerging middle classes now firmly on the pharmaceutical industry’s
radar, middle-income countries are often left paying excessively high
prices. Even poorer countries can lose out, as tiered pricing does not
reflect the true lowest price potential of drugs, and acts against generic
competition, which tends to deliver a lower sustainable price over the long

While generic competition brought the price of first-line HIV drugs down by
close to 99 percent from over US$10,000 per person per year a decade ago to
$120 today, tiered pricing leaves middle-income countries paying as much as
$740 per person per year for second-line drug lopinavir/ritonavir – over
60% more than what pharmaceutical company Abbott are charging low-income
countries. The higher price is unsustainable for countries with large
numbers of poor people living with HIV, such as Brazil.

“The Global Fund’s model in the past has been to use its chequebook to
drive prices down. This has been hugely successful, as it’s allowed more
people to get on treatment thanks to affordable, quality generic
medicines”, said Malpani. “This new proposed policy is an about-face. The
Global Fund should not play into the hands of the pharmaceutical companies’
demand for increased profit by introducing a strategy that won’t be as
effective a use of donor money.”

MSF recently reported prices for bedaquiline, the first new drug to treat
drug-resistant TB (DR-TB) in half a century. In a blow to scaling up
urgently needed treatment for DR-TB, pharmaceutical company Janssen will
charge middle-income countries the unaffordable price of $3,000 for a six
month course of treatment, while low-income countries will be charged $900.
The move is a clear sign of the pharmaceutical industry’s increasing use of
tiered pricing for new medicines.

“The Global Fund needs to reconsider its support for tiered pricing -
people with HIV and TB can’t afford to pay a premium on the price of
life-saving drugs”, said Sharonann Lynch, HIV/TB Policy Advisor for MSF’s
Access Campaign. “Action is needed to improve access to drugs in
middle-income countries, but the proposed approach of the Global Fund is
not the answer and would ultimately only worsen the situation.”


Joanna Keenan
Press Officer
Médecins Sans Frontières - Access Campaign
P: +41 22 849 87 45
M: +41 79 203 13 02
E: joanna.keenan[at]geneva.msf.org
T: twitter.com/joanna_keenan


More information about the Ip-health mailing list