1. 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

2. 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.
Prevalence (15-49 yrs 2006): 0,61% - 610,000
New cases/year - 32,000

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

4. ARV distributed in Brazil - 2008IP
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

5. “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

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

7. 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

8. 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

9. The case of the compulsory licensing of Efavirenz in Brazil.

10. Compulsory licensing 2007 - Efavirenz
Most used imported ARV – 75,000 patients
Long negotiation process – price stable since
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

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

12. Proportion - Expenditure with ARV, 2006

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

14. 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

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

16. The case of tenofovir – 2008
1st line ARV – rapid increase - 33,000 patients - agreement
Patent deposited in Brazil in 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

17. 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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