1. Affordability of HIV/AIDS treatment in developing countries: an analysis of ARV drug price determinants Luis Sagaon Teyssier; Yves Arrighi; Boniface Dongmo Nguimfack; Jean-Paul Moatti

2. Aknowledgements This study is part of a joint project funded by UNITAID and developed by: The French National Agency for Research on AIDS and viral Hepatitis (ANRS-SESSTIM) AIDS Medicines and Diagnostics Service (AMDS/WHO) Foundation for Innovative New Diagnostics (FIND)

3. Outline Context Issues & Objectives Data Method Results Main conclusions

4. HIV/AIDS in developing countries 2010 TOTAL 34.0 million [31.6 million – 35.2 million] 2.7 million [2.4 million – 2.9 million] Adults and children newly infected with HIV Adults and children living with HIV Sub-Saharan Africa Middle East and North Africa South and South-East Asia East Asia Latin America Caribbean Eastern Europe and Central Asia Western and Central Europe North America Oceania 22.9 million [21.6 million – 24.1 million] 4.0 million [3.6 million – 4.5 million] 1.5 million [1.2 million – 1.7 million] 1.5 million [1.3 million – 1.7 million] 1.3 million [1.0 million – 1.9 million] 1.9 million [1.7 million – 2.1 million] 270 000 [230 000 – 340 000] 100 000 [73 000 – 140 000] 160 000 [110 000 – 200 000] 58 000 [24 000 – 130 000] 470 000 [350 000 – 570 000] 790 000 [580 000 – 1.1 million] 200 000 [170 000 – 220 000] 840 000 [770 000 – 930 000] 54 000 [48 000 – 62 000] 59 000 [40 000 – 73 000] 88 000 [48 000 – 160 000] 12 000 [9400 – 17 000] 30 000 [22 000 – 39 000] 3300 [2400 – 4200] 0.8% [0.8% - 0.8%] Adult prevalence (15 ‒ 49) [%] 5.0% [4.7% – 5.2%] 0.3% [0.3% – 0.3%] 0.4% [0.3% – 0.5%] 0.9% [0.8% – 1.1%] 0.6% [0.5% – 0.9%] 0.2% [0.2% – 0.3%] 0.1% [0.1% – 0.1%] 0.9% [0.8% – 1.0%] 0.2% [0.2% – 0.2%] 0.3% [0.2% – 0.3%] Source: WHO & UNAIDS

5. Number of people receiving antiretroviral therapy in low- and middle-income countries, by region, 2002–2010 Source: WHO. UNAIDS, UNICEF

6. ARV market structure Demand-side – Donor funded ARV transactions Supply-side – Branded segment 8 manufacturers 18 single and 6 co-formulations Production: 31.8% in USA; 19.5 UK; 11.6% FR; 11.3 NL – Generic segment 26 manufacturers 17 single, 11 co-formulations, and 4 co-blisters Production: 91% in India; 6.5% South Africa

7. Issues & Objectives ↑ Resistance + Toxicity – Adoption of patented drugs especially for 2 nd and 3 rd lines Switching to new guidelines (d4T to TDF, ZDV) Financial crisis Objectives – To identify the main price determinants – To study the evolution of prices of branded drugs through the life-cycle of patents

8. Data Global Price Reporting Mechanism (AMDS/WHO) Period of analysis: 2003-2012 44,354 transactions of Adult & Children ARVs – 128 countries – 20 ARVs ; 15 FDC/Co-blisters (88 formulations) 12 Sources providing information on transactions: – Global Fund (38.2%); SCMS (20.9%); UNICEF (14.5%); UNITAID (12.7%); IDA (9.3%); PEPFAR (5.4%); Mission Pharma (2.1%); CHAI (1%); JSI (0.4%); WHO/CPS (0.4%); MSH (0.3%); WHO (0.3%)

9. Methods: Price descriptives & OLS Econometric analysis of price determinants: Dependent: price of patient-year treatment log(PYD) Explanatory: – Year dummies – Geographical group (World Bank definition) – Gross National Income per capita (World Bank): log(GNIpc) – Purchased quantity of yearly doses per transaction: log(QYD) – Formulation type (single=ref., co-blister, FDC) – Target group (pediatric=1, adult=0) – Drug age since FDA approval – Number of observed suppliers – Present in 1 st line (yes=1, no=0) – Segment (branded=1, generic=0) – Crossed effects: Segment & Present in 1 st line – Crossed effects: Segment & years until expiration of the initial patent at the time of purchase of branded drugs (linear and squared effects)

10. Brand/Generic Market share in value* Source: GPRM (AMDS/WHO): * 2011-2012 the bulk data has not still been provided by the sources The numbers in the figure indicate millions of US$

11. Treatment price per patient per year* Source: GPRM (AMDS/WHO): * 2011-2012 the bulk data has not still been provided by the sources From 2002 to 2012, 5% of the total yearly treatments was purchased in the branded segment: this represents 15% of the total expenditure in ARVs.

12. Treatment price per patient per year by therapeutic line* Source: GPRM (AMDS/WHO): * 2011-2012 the bulk data has not still been provided by the sources 3rd line: DRV and ETV, mean price from 1,362 US$ (2010) to 1,758 US$ (2011)

13. Mean price per patient per year: adults by therapeutic class **FDC: FTC+TDF; 3TC+d4T; 3TC+TDF; 3TC+ZDV **FDC & *FDC: FTC+TDF; 3TC+d4T; 3TC+TDF; 3TC+ZDV **FDC & Co-blister: ABC+3TC+ZDV; ABC/[3TC+ZDV] ***FDC & Co-blister: EFV+FTC+TDF; EFV+3TC+TDF; EFV/[3TC+d4T]; 3TC+NVP+d4T; 3TC+NVP+ZDV; NVP/[3TC+ZDV]; EFV/[3TC+ZDV] Co-blister: ABC+3TC+ZDV; ABC/[3TC+ZDV] ***FDC & Co-blister: EFV+FTC+TDF; EFV+3TC+TDF; EFV/[3TC+d4T]; 3TC+NVP+d4T; 3TC+NVP+ZDV; NVP/[3TC+ZDV]; EFV/[3TC+ZDV] Mean price per patient per year: adults by therapeutic class

14. Results (1/4) Dependent log(PYD) Estimated coefficient Intercept5.986*** 20030.286*** 20040.335*** 20050.384*** 20060.279*** 20070.292*** 20080.321*** 20090.222*** 20100.078** 20110.063* Ref: 2012 Significant at: ***1%; **5%; *10% Time trend

15. Results (2/4) Significant at: ***1%; **5%; *10% Geographical group Prices in South Asia & East Asia and Pacific are 27% lower than prices in Europe and Central Asia GNI per capita. log(GNIpc): 0.024*** 10% of increase in GNIpc causes an increase of prices of 0.24%: In average, upper-middle income countries pay the highest prices.

16. Results (3/4) Significant at: ***1%; **5%; *10% Drug and market characteristics Dependent log(PYD) Estimated coefficient Purchased quantity of yearly doses per transaction: log(QYD)-0.078*** Target group: pediatric=1-0.381*** Co-blister (ref. single)1.303*** FDC (ref. single)0.261*** Drug age since FDA approval-0.033*** Number of observed suppliers-0.032*** Present in 1st line: yes=1-0.653*** Segment: branded=10.563*** Co-blister formulation is 130% more expensive than single formulation 1 additional supplier in the market reduces prices in average of about 3.3% Drugs present in 1 st line are 65.3% cheaper than drugs in 2 nd line Branded drugs are 56.3% more expensive than generic drugs

17. Results (4/4) Segment & Present in 1 st line: 0.113*** Branded in 1 st line are 11.3% more expensive than generic in 1 st line. Segment & years until expiration of the initial patent at purchase of branded drugs (linear and squared effects): 0.026*** & 0.002*** Years before patent expiration Years after patent expiration Ref: Purchase the same year of patent expiration 16% more expensive than… 9.5% cheaper than…: 22.4% more expensive than…

18. Main conclusions  Generic competition has been the driving force for ARV price decreases although we may be close to marginal cost for first line drugs  ARV price remain a major barrier for switching to 2 nd and 3rd lines  Brand firm strategies (during the patent period and at patent expiration) remain a majour source of higher prices

19. The debate on Intellectual Property Rights and TRIPS agreements is not over! Contacts: Jean-paul.moatti@inserm.fr luis.sagaon-teyssier@inserm.fr