Drug Pricing Policies and Challenges Aids 2008 Drug Pricing Policies and Challenges Lessons from Brazil August 7, 2008 Mexico City Mariangela Simao National STD/Aids Program Ministry of Health - Brazil

85% of all municipalities Cities with at least one aids case. Brazil, 1990 – 2007 85% of all municipalities 92% pacientes estao vivos apos 1 ano e 91% apos 4 anos. 1990-1995 1996-2000 2001-2007 Prevalence (15-49 yrs 2006): 0,61% - 610,000 New cases/year - 32,000

Free and universal access policy - 1996 – In Brazil Free and universal access policy - 1996 – centralized procurement – MoH (only buyer) - budget 2008 = US$ 640 million December 2008 - 190.000 people on ART National guidelines – National Health System

ARV distributed in Brazil - 2008 IP ITRN e ITRNt RITONAVIR (1996)* SAQUINAVIR (1996)* INDINAVIR (1997)* NELFINAVIR (1998)** AMPRENAVIR (2001) LOPINAVIR/r (2002) ATAZANAVIR (2004) FOSAMPRENAVIR (2007) DARUNAVIR (2008) ZIDOVUDINE (1993)* ESTAVUDINE (1997)* DIDANOSINE (1998)* LAMIVUDINE (1999)* ABACAVIR (2001) TENOFOVIR (2003) DIDANOSINE EC (2005) ITRNN NEVIRAPINE (2001)* EFAVIRENZ (1999) FUSION INHHIBITORS ENFUVIRTIDE (2005) *national production – not protected by patents **excluded in 2007

“As close as possible” to universal access 94,8% ART “coverage” – universal access Average costs* 1st line (AZT – 3TC – D4T – DDI – TDF – EFZ – NVP) – US$ 667 ppy 2nd line (LPV/r – SQV – IDV – ATV – FOS – RTV) - US$ 2,114 ppy – 25% of all patients * Excluded costs DRV and T20

Sustainability of free and universal access is related to fair prices. What is a fair price? .

Most common price determinants Intellectual property rights – theoretically based on innovation What is the real cost of innovation? How much costs the process itself and how much is used for marketing the new ARV? How long does it take to pay the costs involved directly in innovation? “a black box” IP promotes innovation Ends up in monopolies – no competition Hampers access to cheaper generic ARV Recursos publicos envolvidos na inovacao. 7

Prevalence and level of income alone or combined are poor criteria for LAC A fair criteria could go beyond: an equal cost per patient for all developing countries, with small differences according to GNP/capita consider the level of use of that drug in the country and the treatment coverage costs incurred by the Governments from their own budgets, not from grants or donations – sustainability and commitment treatment coverage (all other factors equal, the total cost for a country with 80% access is 4 times as high as for one providing 20% access; so if a country with 1% prevalence is providing 80% coverage and one with 3% prevalence is providing 20%, the cost for the one with the lower prevalence is higher) cost incurred by the Governmentt (and therefore by the citizens): this criteria could take into consideration only the cost of the drug covered by the National Government (and not by grants). It is unfair that a country like Brazil, where the Govt (and the citizens) are paying for the full cost of drugs, that the prices are higher than in countries where the Govt is not paying anything (because it benefits from a foreign donation). 8

The case of the compulsory licensing of Efavirenz in Brazil .

Compulsory licensing 2007 - Efavirenz Most used imported ARV – 75,000 patients Long negotiation process – price stable since 2003 - US$ 1,59/tb Thailand – 1,2% prevalence 17,000 patients – US$ 0,67/tb Dominican Republic – 1.1% prevalence 1,500 patients - US$ 0,67/tb 10

Compulsory licensing - Efavirenz Annual cost - from US$ 580.00 to US$166.36 ppy US$ 0.46 (including royalties and air freight) Estimated “savings” until 2012 - US$ 237 millions In 2007 – from US$ 42 millions to US$ 12 millions National production by 2009 11

Proportion - Expenditure with ARV, 2006

Proportion - Expenditure with ARV, 2007 * *2007 – dados preliminares

Other challenges for price negotiation 2009 34,000 patients ATV 150mg + 200mg = US$ 54,7 millions = 22% budget imported ARV 34,000 patients ATV 200mg – US$ 2.28 Considering both formulations – 150 and 200mg – 34,000 pacientes = 22% of the budget for imported drugs Information about a generic combined with ritonavir I the process of prequlification 4 generics for the 300mg – not yet prequlified

Other challenges for price negotiation 2009 TDF = US$ 42 millions = 14,7% budget imported ARV

The case of tenofovir – 2008 1st line ARV – rapid increase - 33,000 patients - agreement Patent deposited in Brazil in1995 - not granted yet – MoH declared it of public interest in April 2008 Brazil – US$ 3.25/tb = US$ 1,186/yr Thailand – US$ 1,24/tb = US$ 454/yr Gilead Access price - US$ 0,567/tb = US$ 207/yr CIPLA – not prequalified yet – US$ 0,43/tb = US$ 157/yr 16

Challenges for all of us Expand access to fair prices – review of present criteria Use of the flexibilities provided by the declaration of the Doha on TRIPS and Public Health – support from partners and WHO WHA 2008 – Global Strategy on Innovation, Public Health and Intellectual Property – put it into practice...

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