[e-drug] USA pays high prices for global AIDS drugs

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E-DRUG: USA pays high prices for global AIDS drugs
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[PAGE ONE, Wall Street Journal. Copied as fair use. WB]

U.S. Pays High Prices
For Global AIDS Drugs, Study Says

By SARAH LUECK
Staff Reporter of THE WALL STREET JOURNAL
October 29, 2004; Page B1

The U.S. government is paying twice as much for many of the drugs in its global AIDS program as other international aid organizations are, because the Bush administration won't buy cheaper versions made in India, congressional investigators found.

A draft report by the Government Accountability Office -- the first independent comparison of the AIDS-drug prices -- shows that the lowest price available to the U.S. for one common AIDS-drug regimen, stavudine, lamivudine and nevirapine, is $562 per person annually. That compares with $215 available to international AIDS groups not bound by U.S. restrictions.

The stark price differences mean that President Bush's five-year, $15 billion global AIDS fund won't go as far as it might have. The GAO data was provided by Senate Democrats, who have criticized the Bush administration for not buying Indian-made drugs that combine three AIDS medicines into one pill, but violate U.S. patent laws because they are copies of brand-name products.

Public release of the report, based on a survey of AIDS drugmakers, will come only after the administration submits formal comments to GAO. Mark Dybul, chief medical officer for the Office of the U.S. Global AIDS Coordinator, acknowledges that prices for Indian-made pills are lower than the drugs the U.S. is buying. But spending on medications, he says, is a relatively small part of U.S. spending for treatment. Training of staff, salaries, lab tests and infrastructure cost far more, he said.  Administration officials have said for months that they will buy the cheaper drugs once the Food and Drug Administration certifies their safety. The Bush administration says it regards the issue as one of drug safety rather than a fight over generic versus brand-name drugs. But a special FDA approval process, set up with great fanfare in May, hasn't produced a single approval of a three-in-one AIDS pill, partly because some companies haven't submitted applications.

AIDS advocates call the FDA review unnecessary and say the administration should treat the epidemic as an emergency, especially in sub-Saharan Africa, where an estimated 25 million people are living with HIV or AIDS. The combination pills, made by Indian companies Ranbaxy Laboratories Ltd. and Cipla Ltd., are cheaper and cut the number of pills patients must take daily from six to two.

Other international AIDS-treatment programs, such as those funded by the Global Fund to Fight AIDS, Tuberculosis and Malaria and the World Bank, are using the Indian-made drugs that have been "prequalified" by the World Health Organization.

According to the U.S. AIDS coordinator's office, a survey of selected grantees found the difference between buying the cheaper Indian drugs and more costly brand-name drugs adds about 16% to the cost, about $200 per patient per year -- or $13 million more for the 57,000 patients the grantees plan to serve this fiscal year. "It's not nothing," Dr. Dybul says, adding that the one-year additional cost is the price of "knowing the drugs are safe."

The WHO has removed a few of the Indian drugs from the "prequalified" list because there were problems found with the data. 

The big U.S. drugmakers don't produce the AIDS combination drugs; separately they make the individual components that are patented in the U.S. Even if the Indian-made drug cocktail received FDA approval, they wouldn't be sold in the U.S. because of the patent restrictions.

The GAO's draft report shows that different manufacturers make each of the drugs in the cocktail -- with varying prices. The U.S. pays nearly $450 per patient annually for Boehringer Ingelheim's nevirapine; generics available to other treatment programs run $120 to $170. GlaxoSmithKline PLC's zidovudine costs the U.S. about $200 annually per patient, compared with $125 to $175. For others, including Bristol-Myers Squibb 's stavudine and Glaxo's lamivudine, the U.S. pays about the same as international groups.

Nancy Pekarek, a spokeswoman for London-based GlaxoSmithKline, questions whether the makers of the copy drugs would provide a dependable supply of the medicines, which patients must continue to take for the rest of their lives. But Glaxo isn't fighting the use of the Indian-made versions, as long as they're limited to the developing world. The company has licensed some of its AIDS drugs to generic companies, including South Africa's Aspen Pharmacare Inc., she said. "In Africa, it's not about markets -- it's about access," Ms. Pekarek said. But it "would be a huge problem if generic companies were allowed to completely ignore patent rights and bring drugs into countries like the U.S," she added.

"We need to make sure drugs taken by people around the world are safe," says Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America, the main industry trade group. Brand companies also are considering working together on making combination AIDS drugs, or at least co-packaging their products together, for global AIDS treatment, Mr. Grayson notes.

To win FDA approval for the foreign-made generics, the manufacturers must show their drugs are equivalent to brand-name products and provide detailed information about chemistry and production. They can't simply duplicate information already given to the WHO and must permit FDA inspection of their plants.

"It may take three weeks once you get to FDA, but what is required to take to FDA?" asks Bill Haddad, an advisor to Cipla Ltd. He says he is in talks with the FDA about what data Cipla will need to submit to win agency approval for the company's three-in-one AIDS drug. While the FDA has been helpful, he says, the process is cumbersome and Cipla is still debating whether it's worthwhile to apply.

Once a company completes an application with the FDA, the agency says it would be able to grant approval quickly, perhaps in less than six weeks. The approval is "tentative," meaning drugs are safe and effective but can't be marketed in the U.S. because of patent restrictions. The administration has said it will purchase the drugs for overseas use, however, as long as the FDA says they are safe.

Ranbaxy spokesman Chuck Caprariello says the company applied last week for FDA approval of one medication, and plans to submit applications for 12 other products, including its three-in-one combination drug, early next year. The company had to re-do studies showing its products are equivalent to the brand-name versions. Aspen of South Africa says it will apply for FDA approval. Dr. Dybul of the AIDS coordinator's office says he is "hopeful" that a three-in-one pill will win FDA approval early next year.

Write to Sarah Lueck at sarah.lueck@wsj.com