[Ip-health] FT: Cost of hepatitis C treatment may be barrier for emerging markets

Thiru Balasubramaniam thiru at keionline.org
Mon Jul 28 03:04:18 PDT 2014


July 27, 2014 9:00 pm
Cost of hepatitis C treatment may be barrier for emerging markets

By Andrew Jack

The high price of Sovaldi
<http://www.ft.com/cms/s/6839a278-fc84-11e3-86dc-00144feab7de.html> – the
most recent advance in treatment for hepatitis C – is creating concern
within healthcare systems in Europe and even triggering political
resistance in the US. It also risks being a barrier to any improvements at
all in lower-income countries around the world.

While $84,000, the US price for one 12-week supply, is high for many
Americans and Europeans, the deeply discounted tariffs proposed for those
on low incomes elsewhere risk causing more fundamental worries, sparking
debates over access comparable to those for HIV antiretroviral treatments
since the late 1990s.

“There’s real concern over [the high] cost of the new hepatitis medicines,”
says Rohit Malpani, director of policy and analysis at Médecins Sans
Frontières’ access campaign in Geneva.

“We are concerned about the ability to scale up treatments because of
prices in emerging markets, because of the patent barriers that exist and
the need to combine different medicines.”

Gregg Alton, executive vice-president in charge of access at Gilead Sciences
<http://markets.ft.com/tearsheets/performance.asp?s=us:GILD>, Sovaldi’s
developer, stresses that his company is working on a pricing policy that
will make the drug available far more affordably to those in poorer
countries. “In all cases, we are lowering the cost of curing hepatitis C,”
he says.

The company has set a minimum threshold price of $300 a bottle, enough for
a month. With three months typically required for a full course – and
taking into account the currently approved combination with interferon –
the total cost per patient would be about $900 for a complete treatment.

Its current plan, still with room for expansion, will offer that price to
at least 80 countries, whether to governments or to non-profit

It has largely targeted the world’s poorest nations for the lowest price,
but also included some middle income ones with a particularly high burden,
such as Egypt, which has the highest hepatitis C prevalence in the world

Gilead signed an agreement with the Egyptian government in early July that
should lead to the introduction of the drug at the start of September. This
would make the country the first to have access to Sovaldi outside the US
and the EU.

In line with the company’s past approach to its HIV medicines, it will also
offer to license production of the new drug to a number of rival low-cost
Indian generic drug companies. They will be offered manufacturing knowhow
and allowed to source and competitively price the product at whatever level
they choose.

But Mr Malpani dismisses the current proposals as “highly underwhelming and
inadequate”. “We think it will have to be improved dramatically. The prices
are not representative of people’s ability to pay and will not foster
competition and affordability.”

He also cautions over parallels with HIV – another treatment field where
Gilead offered discounts to lower income countries and licensed access to
its medicines via generic companies. They in turn supplied them to many low
income countries with a high prevalence – and with no patent protection on
the drugs.

“There’s a tendency to analogise with HIV, but there are some fundamental
differences,” he says. “Hepatitis C is a middle-income country disease with
a very different set of challenges and strong enforcement of intellectual

The price in countries such as Ukraine and Iran, for instance, remains
unclear. Furthermore, Gilead is seeking to enforce patents on Sovaldi
wherever possible, limiting the option for rival lower cost producers to
sell it outside the terms of the contracts with its partners.

Yet Mr Alton argues that the real obstacle to treatment is not price. In
another parallel with HIV that his company faced in the past, he fears that
many countries will prove slow to mobilise domestic regulators to approve
and register Sovaldi.

Some, such as India and China, are not satisfied with the tests conducted
in the US and elsewhere. They want additional clinical trials to be
conducted on their own patients as a precondition for authorisation – which
will add extra costs and delays.

“The big impediment to access in India is regulatory approval,” Mr Alton
says, adding that the authorities have not even recognised Sovaldi’s patent

“Funding will be a challenge no matter what the price is. Interferon is
already generic but the price is not affordable to people. Rejecting the
patent does not necessarily enable broad access.”

Others point out that India and similar countries with weak government
health systems that require patients to pay from their own pocket will also
struggle to diagnose and supervise those requiring treatment. MSF, which
recently received a grant from Unitaid, the UN-backed donor health funding
agency, concedes that costs of diagnosis also remain an expensive obstacle.

“Our feeling is that we are pricing Sovaldi fairly, and providing it at a
level that is affordable. The real focus should be on finding funding,”
says Mr Alton.

“If we don’t take action now to look at funding, and go beyond drug costs,
we are not going to be successful.”

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