Clinton Health Access Initiative, UNITAID, and DFID Announce Lower Prices for HIV/AIDS Medicines in Developing Countries

Partnership to Reduce ARV Prices will Yield Savings of at Least $600 Million Over 3 Years

Mon, 05/16/2011

CHAI, UNITAID, AND DFID

Boston, MA; Geneva; and London – Today, the Clinton Health Access Initiative (CHAI), UNITAID, and the UK’s Department for International Development (DFID) announced further price reductions on key antiretroviral (ARV) drug regimens used to treat HIV/AIDS in the developing world. This announcement represents the latest in a series of price reductions on ‘next-generation’ ARVs that have been accomplished through the collaborative efforts of the three organizations. Since 2008, this partnership has achieved price reductions that will generate global savings of at least $600* million over the next three years, making HIV treatment more widely accessible. With new research published last week proving that treating people with AIDS immediately not only keeps them alive but is also an effective tool to prevent transmission, making ARVs more affordable can save countless lives.

“With more than nine million people worldwide in need of HIV/AIDS treatment, we must see rapid action to increase people’s access to treatment,” said President William J. Clinton. “Over 70 countries and 70% of the HIV-infected population have access to the prices my Foundation negotiated; so these new price reductions, which have been agreed to by a wide range of suppliers, will provide millions of people with increased access to better, cheaper and more convenient first and second-line drug regimens. We have helped almost four million people gain access to life-saving medicine, and I’m proud that we can now reach millions more. ”

The new price ceilings on a range of adult and pediatric ARVs announced today will be available to most of the over 70 countries in CHAI’s Procurement Consortium. The most significant price reductions were registered on tenofovir (TDF)- and efavirenz (EFV)-based products. The World Health Organization (WHO) now recommends TDF as one of the preferred first-line treatment options, but TDF-based regimens have historically been prohibitively expensive for developing countries. In 2008, low-income countries paid an average annual cost of $400 per patient per year for a once-daily regimen including TDF and EFV, nearly three times the cost of another leading twice-daily regimen. That same TDF-based regimen is now available at an annual per patient cost of less than $159, a reduction of 14% from the CHAI ceiling price announced last year and a reduction of 60% from the average price paid in 2008.

Price reductions were also secured on key second-line ARVs. A WHO-recommended second-line regimen is now available at less than $410 per year, down sharply from 2008 when low-income countries paid an average of $800-$1,200 per patient per year for the most popular second-line regimens. These gains were due largely to the recent introduction of a critical new product —atazanavir/ritonavir (ATV/r) — although price reductions have also been secured on other prominent second-line drugs.

With many countries shifting increasingly towards TDF- and ATV/r-based regimens, the price reductions achieved on these emerging products since 2008 are expected to result in over $600 million in cost savings over the next three years, even assuming no additional patient scale-up. If patient scale-up continues at its recent pace, the cost savings could exceed $1 billion over this period.

These price reductions were made possible through complementary efforts to build demand for new products, which stimulated market competition and led to volume-based discounts, while partnering with suppliers to achieve cost reductions through more efficient manufacturing processes and sourcing of raw materials. By supporting the purchase of new ARV formulations for developing countries, UNITAID has played a critical role in driving demand-side price reductions. Meanwhile, DFID’s support of CHAI’s work with suppliers, along with substantial contributions by the Bill and Melinda Gates Foundation, has driven supply-side cost reductions.

“The British Government’s support to the Clinton Health Access Initiative is helping to provide life-saving HIV treatment in countries that have been devastated by the epidemic,” said The UK’s International Development Secretary Andrew Mitchell. “This partnership is leading the way in providing value for money by working with the private sector to drive down the cost of lifesaving drugs. It ensures that more people receive the care they desperately need with UK support alone helping an extra 500,000 poor people access the treatment they need over the next three years.”

“UNITAID's aim is to catalyse, create or fix markets for medicines,” said Philippe Douste-Blazy, Chair of UNITAID's Executive Board. “By stimulating greater availability of better medicines and price reductions, UNITAID's partnership with CHAI will facilitate the work of the Global Fund, PEPFAR and countries themselves, and ultimately improve aid effectiveness by making the money go further.”

UNITAID has partnered with CHAI as the implementing partner to play a major role in creating a market for emerging first- and second-line ARVs. Conceived with the intent to fund time-limited catalytic interventions to enable greater access to medicines among patients in developing countries, UNITAID has invested more than $200 million in funding for second-line drugs and TDF since 2006. By focusing its resources within these emerging markets, UNITAID generated sufficient demand to trigger major price reductions and accelerated the introduction of important new products.

Supply-side efforts have also played a critical role in lowering ARV prices. Support from DFID and the Bill and Melinda Gates Foundation has enabled CHAI to collaborate with suppliers to identify and capture manufacturing efficiency improvements, while also driving uptake of these products and stimulating market competition. This approach has resulted in particularly significant cost reductions on TDF, EFV, and second-line products over the past few years, as considerable improvements in the manufacturing process and sourcing of raw materials were realized. These technical efficiencies are responsible for nearly 40% of the projected $600 million in total cost savings over the next three years.

CHAI ceiling prices for these and other products can be found at: http://www.clintonfoundation.org/files/chai_arv_ceilingPriceList_201105_english.pdf

Future Trends

Demand for TDF-based first-line regimens is projected to grow rapidly, from almost 1 million patients in 2010, representing 18% of the adult first-line market, to an estimated 4.2 million patients in 2013, or 53% of the total first-line market. The cost differential between TDF and zidovudine (AZT)-based regimens has already declined significantly, and this trend is expected to continue. When purchased as two separate pills, a once-daily TDF-based regimen is now available at an annual cost of less than $159 (the regimen is also available as a single pill for less than $169 annually), which is within 20% of the price of a twice-daily AZT-based regimen. CHAI expects the price of once-daily TDF-based regimens to fall below the price of twice-daily AZT-based options over the coming few years as demand for TDF grows.

The price of a three-pill once-daily second-line regimen — TDF + lamivudine (3TC) + atazanavir (ATV) + ritonavir (RTV) — is currently available to many countries at less than $410 per year when sourced individually from separate suppliers. A co-packaged version of this regimen, with all three pills in the same packaging, is available at less than $395; approval for this product is pending with the WHO and US FDA and is expected this year. Governments are already accessing these lower prices. Deliveries of ATV and heat-stable RTV are now occurring in ten countries through the UNITAID program. Additionally, orders are pending for the co-packaged second-line treatment, which is awaiting final approval by the WHO or US FDA, expected this year.

While both ATV/r and lopinavir/ritonavir (LPV/r) are recommended by the WHO for second-line treatment, demand for LPV/r is still much greater than for ATV/r. CHAI expects and encourages a rapid switch to ATV/r given its lower cost and greater convenience of once-daily dosing. Further significant price reductions on ATV/r are expected as demand grows. In light of concerns amongst the international community that resource limitations may constrain treatment scale-up, aggressive uptake of ATV/r could enable more patients to be treated — and potentially result in better treatment outcomes. ATV/r is, in fact, one of the components of the current preferred first-line regimens in the US Department of Health and Human Services treatment guidelines.

Approach

Since 2005, CHAI has conducted annual price negotiations with several suppliers of key ARVs on an explicit cost-plus basis whereby suppliers provide costing information and agree to reduce prices if CHAI and/or the supplier can identify opportunities for further cost reductions. Through a series of collaborations, suppliers and CHAI have identified lower-priced suppliers of raw materials and novel approaches for improving the manufacture of key drugs.

For example, in 2005, CHAI identified a new, lower-priced source of magnesium tert-butoxide (MTB), a key raw material and cost driver in the production of TDF. Regulatory approvals from the US FDA and WHO for this alternative source have contributed to a lower cost for the TDF active pharmaceutical ingredient (API), resulting in savings of approximately $15 per patient taking TDF, per year. CHAI also helped suppliers identify new routes of synthesis for TDF, pioneering new and improved ways of synthesizing the API. CHAI recently published results of the improved synthesis and several suppliers have incorporated elements of this new process, or improvements they have discovered as a result of this work, to further reduce their cost.
CHAI, UNITAID and DFID are grateful to key suppliers of ARVs, including Aptuit Laurus, Aurobindo Pharma, Cipla, Emcure, Hetero, Matrix (a subsidiary of Mylan), Ranbaxy, and Strides Arcolab for their contributions in advancing access through price reductions and the development of new improved products. Their willingness to engage in the ARV marketplace in developing countries, coupled with their leadership and foresight in recognizing the value of these changes to the benefit of both patients and industry has been a key driver for improving access.

About Clinton Health Access Initiative
The Clinton Health Access Initiative (CHAI), founded in 2002 by President Bill Clinton, is dedicated to improving access to health care for all individuals. Residents of developing countries often cannot afford and do not have access to systems that provide basic health care, including medicines for diseases that are preventable, treatable or curable. This is where CHAI intervenes — by partnering with governments and working with other NGOs to provide solutions to the biggest challenges impeding effective health care in developing countries. CHAI began by bringing care and treatment to people living with HIV/AIDS through access to medicines, and has expanded its work to include high quality treatment for malaria, accelerating the roll out of new vaccines, and lowering infant mortality. To learn more about CHAI, please visit www.clintonhealthaccess.org

For press inquiries, please contact Jove Oliver, press@clintonhealthaccess.org

About UNITAID
UNITAID is a global health initiative established to provide sustainable, predictable and additional funding to impact on markets to reduce prices and increase the availability and supply of quality-assured treatments for HIV/AIDS, malaria and tuberculosis. UNITAID was launched in 2006 by the Governments of Brazil, Chile, France, Norway and the United Kingdom as an innovative financing mechanism to provide additional funding for global health. About 70% of UNITAID’s funds come from a small solidarity contribution on airline tickets. Today, UNITAID is supported by 28 countries and the Bill and Melinda Gates Foundation. Through implementing partners, UNITAID finances the purchase of quality-assured drugs and diagnostics for patients in poor countries, using its market power to expand supply, promote development of new and better products, cut delivery lead times and reduce prices. UNITAID currently supports partner programmes in 94 countries worldwide - we are addressing HIV/AIDS in 51 countries; malaria in 29; and tuberculosis in 72 countries. Since late 2006 UNITAID has committed US$ 1.3 billion to the diagnosis and treatment of these three diseases, representing a total of approximately 47 million patient treatments supplied.

For press inquiries, please contact Daniela Bagozzi, bagozzid@who.int

About DFID
DFID, the Department for International Development: leading the UK government's fight against world poverty. Since its creation, DFID has helped more than 250 million people lift themselves from poverty and helped 40 million more children to go to primary school. But there is still much to do. 1.4 billion people still live on less than $1.25 a day. Problems faced by poor countries affect all of us. Britain's fastest growing export markets are in poor countries. Weak government and social exclusion can cause conflict, threatening peace and security around the world. All countries of the world face dangerous climate change together. DFID works with national and international partners to eliminate global poverty and its causes, as part of the UN ‘Millennium Development Goals.’ DFID also responds to overseas emergencies.

For press inquiries, please contact the DFID press office on +44 (0) 207 023 0600.

*To derive the cost savings figures, the price differential between the average market prices of key products in 2008 and CHAI’s 2011 price ceilings was multiplied by the anticipated demand for those products over the coming three years. The 2008 prices used reflect average market prices paid in low-income countries as reported in public procurement data. The $600 million savings estimate conservatively assumes no scale-up in the total number of patients being treated with ARVs in light of funding uncertainties, but assumes that product preferences among existing patients will continue to shift in favor of TDF in first-line and ATV in second-line. If patient scale-up continues at its recent pace, savings could exceed $1 billion over the next three years.

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