Roughly 40 million people are currently infected with HIV, 25 million of whom live in sub-Saharan Africa. The pandemic reaches 5 million more people per year, 95 percent of whom live in developing countries.[1] To counter this trend, the developed world increasingly provides aid to countries with high infection rates, paying for prevention, treatment, and care programs to slow the spread of the disease and to ameliorate its ravages. One such initiative, the World Health Organizations 3 by 5 program, seeks to provide 3 million AIDS patients with antiretroviral treatment (ART) by the end of 2005. Another, the U.S. Presidents Emergency Plan for AIDS Relief (PEPFAR), is a five year, 15-billion project with the goals of treating 2 million infected persons with ART, preventing 7 million new infections, and providing care and support for 10 million persons infected with or affected by HIV, including orphans and vulnerable children. These programs are large in both scale and scope and have attracted necessary global attention to the HIV/AIDS pandemic. This paper looks specifically at the treatment of HIV.
Owing to their high cost, treatment initiatives are unlikely to be as efficient as prevention initiatives in the poorest countries. Nonetheless, treatment is necessary, and we should commend the organizations, companies, and governments involved in providing it. The lives improved and prolonged by treatment strengthen the fragile social and economic fabric of developing countries. However, beyond the costs of drug acquisition, the higher cost of diagnostics and the costs of actively treating people (drug delivery by trained personnel) make treatment programs very expensive. Yet most commentators fixate on the price of drugs over all other costs.
Most treatment initiatives, like the WHOs 3 by 5 program and the Clinton Foundations HIV/AIDS Initiative, emphasize achieving increased numbers in treatment by acquiring low-priced antiretrovirals (ARVs) and distributing them to as many AIDS patients as possible. The number of people on ART has increased as a result. But is the ambitious goal-setting of these programs the best way to deal with the AIDS problem?
WHO and Clinton Foundation: Redefining Numbers
WHO. The WHOs 3 by 5 initiative, announced on
December 1, 2003, has set an ambitious goal that may in practice sacrifice
quality of treatment for quantity. According to the WHO and the Joint United
Nations Program on HIV/AIDS (UNAIDS), of the 40 million people with HIV, an
estimated 6 million people in developing countries urgently need ART, which
includes all HIV-infected people with less than 200 CD4 cells per cubic
millimeter of blood (CD4 is a measure of the strength of the immune system).[2]
At the end of 2003, only 400,000 of them were receiving ART, of whom 150,000
were in sub-Saharan Africa. Within one year, the WHO/UNAIDS effort claims to
have increased the number of AIDS patients on ART to 700,000 globally, meeting
12 percent of the total need. Of that total, 310,000 are in sub-Saharan Africa,
which means 8 percent of the 4 million people in need in the region receive ART.
This significant increase in the number of people on treatment seems to bode
well for the WHO master plan, but there is concern that the organizations
involved double-counted patients in treatment. AIDS specialists working within a
couple of the agencies estimate that at least 63,000 of the quoted 700,000 on
ARVs may have been claimed by more than one organization.[3] In other words, the
treatment figures are inflated by nearly 10 percent.
Most popular media outlets are content to regurgitate the official-sounding
statistics without independent verification. USA Today, for example, stated that
Two-thirds more people . . . an estimated 700,000 people are now able to
obtain AIDS treatment.[4] Since journalists are content to let such
careless--or perhaps intentionally misleading--accounting stand without
challenge, taxpayer funded humanitarian organizations like the WHO are free to
pose information concerning their efforts in the most flattering light possible.
In the case of ARV treatment, the WHO is no doubt tempted to meet its 3 by
5 by any means necessary, including fabrication. Though its 63,000 person
slip-up seems small now, that does not bode well for the future.
In addition to their factual inaccuracy, the oft-quoted 3 by 5 numbers
misleadingly imply that the WHO and other aid agencies are providing the funds
for all this treatment. In reality, roughly a quarter of those on treatment
(154,000 people at the end of 2004) in the developing world reside in Brazil,
which funds its own program and has done so since before the existence of 3
by 5. Furthermore, the Accelerating Access Initiative--which consists of
seven research-based pharmaceutical companies that provide numerous free or
nonprofit-priced drugs, which are then distributed by various multilateral
agencies and national groups--is responsible for treating 333,000 patients as of
September 2004.[5] It is fair for the agencies to claim to have served the vast
majority of these patients, but a caveat should be applied. While it is possible
for corporations to provide nonprofit drugs (which are in reality loss-making,
given scarce manufacturing capacity utilization) for a few hundred thousand
people, it is quite another thing for them to provide drugs to a vastly larger
number of people (an order of magnitude more, given targets) because doing so
would cause massive fixed and variable cost increases and would not be
sustainable.
The WHO makes no effort to clear up the confusion. Instead of explicitly
stating how it arrives at these numbers, it obfuscates even further. The
December 2004 WHO 3 by 5 Progress Report states that estimates of ART
recipients are based on data reported by countries in written reports or
through personal communication with key informants.[6] The report cites
weaknesses in private sector reporting, the time lag between global and country
reporting, and local conditions. The estimated range of the number on ARVs is
somewhere between 630,000 and 780,000, and the WHO report states that these
estimates are likely to be lower than the actual number on treatment because
all the evidence indicates very rapid scaling up of both the numbers of sites
and the numbers receiving treatment.[7]
Clinton Foundation. The Clinton Foundations HIV/AIDS
Initiative works with individual governments in Africa, Asia, and the Caribbean,
providing technical assistance and mobilizing human and financial resources to
scale up public health systems to ensure broad access to care and treatment. The
most commonly cited obstacle to widespread treatment is the cost of
antiretroviral therapy, which includes not only drug costs, but also diagnostic
and monitoring costs. To overcome the cost barrier, the Clinton Foundation has
established HIV/ AIDS initiatives for procuring medicines and supplies at more
affordable prices. The Initiatives cost experts worked with generic drug
companies in South Africa and India--Aspen Pharmacare Holdings Ltd., Cipla Ltd.,
Ranbaxy Laboratories Ltd., and Matrix Laboratories Ltd.--to analyze processes
and costs throughout the production chain from raw materials to the production
of the final formulations. Based on this work, the foundation projected
impressive potential cost advantages that could result from higher volumes.
On October 23, 2003, the Clinton-led initiative announced an agreement with
four suppliers of generic ARV medications that promised dramatic cuts in the
price of the most commonly used triple-drug therapy combinations to less than
140 per person per year. The agreement will allow the delivery of a
triple-drug treatment at about thirty-eight cents, which is almost half the
current price of inexpensive commonly used drugs, former U.S. president Bill
Clinton said.
Despite Clintons promises, however, other health organizations like
Medecins Sans Frontieres (MSF) and the WHO are unable to acquire first line ARV
regimens at such a low price. For one thing, the 140 per-person, per-year quote
applies only to Triomune (d4T/3TC/NVP), a first-line regimen produced by the
Indian company Cipla Ltd. and, although not tested by the U.S. Food and Drug
Administration (FDA) or another competent testing agency, one of the few
fixed-dose combinations (FDCs) pre-qualified by the WHO. However, according to
an MSF study outlining available prices for triple-dose ARVs from India, no
company offers any FDCs at 140 per person, including Ciplas Triomune, which
sells instead for 214 to MSF. Other first line ARVs cost anywhere from 169 to
413, most of which are not pre-qualified by the WHO, and none of which are
approved by the FDA.[8]
Additionally, the deals brokered by the Clinton Foundation involve
extraordinary demands. Dr. Yusuf Hamied, president of Cipla Ltd., said each
country must submit large, irrevocable purchase orders, pay cash, and bear the
costs of registering each drug in each country, which might include lobbying the
legislature or fighting patent lawsuits. There also must be a guaranteed supply
of the raw active ingredients at fixed prices. If someone wanted to give me
an advance of 50 million and guarantee that I supply them for five years, I
might do it for 120, said Dr. Hamied.[9]
Publicly, however, the Clinton Foundation continues to promote its 140
treatment price. At the recent World Economic Forum in Davos, former president
Clinton stated that AIDS-infected people could be treated with ARVs for a mere
forty cents a day (146 per year). The head of the initiative, Ira Magaziner,
told Scrip magazine that the foundation provided treatments to 80,000
patients in the developing world at the end of last year. The delivered prices
have ranged from 131 to 149 for the triple combination. The price variation
depends on the country, the volume of purchase, the type of packaging required,
and whether the order is one or three pills.[10]
The Clinton Foundation claimed in February that it had 24,800 patients on
ARVs in sub-Saharan Africa and expected to be treating a total of 110,000 people
worldwide by the end of April 2005. Yet by implying that it delivers all drugs
at the lowest price, the foundation continues to mislead the public about the
true cost of achieving these large treatment numbers. Expecting that ART is
available to everyone at the quoted price, activists understandably clamor for
increased treatment numbers, and politicians responding to the demands of a
misled public then make unsound decisions about priorities for AIDS funding.
Implications of Numbers-Driven Programs
Quality. Though the accounting may be flawed, little doubt
remains that a relatively quick scaling up of treatment is occurring. Much of
the credit lies with generic companies who have increased competition and
lowered drug costs. But can such acceleration of treatment be done safely and
sustainably?
One inherent concern is the quality of antiretroviral treatment. Providing
another 2.3 million people with ARVs in the next year will allegedly require
about 3.8 billion although, even if this money were available, it is unclear
whether delivery would be possible. In any case, a study released by Action Aid
warns that the WHO is facing a 2-billion funding shortfall. A solution to this
financial constraint, promoted by myriad groups, is to find still cheaper drugs
to distribute. Generic drug companies, primarily in India, have seized this
opportunity and are producing copies of AIDS drugs, although the quantities in
production are far from clear. The most popular medications are FDCs containing
Lamivudine (150mg), Stavudine (3040mg), and Nevirapine (150200mg).[11]
Generic drug combinations are attractive because they can be cheaper than
branded originals yet are supposed to have the same ingredients, formulation,
and impact as their more widely tested equivalents.[12]
Less expensive copy drugs, however, are not necessarily exact replicas of
rigorously tested, patented drugs. For example, FDC Triomune contains three
ingredients that do not exist in any brand medication, which to experts Carol
Adelman and Jeremiah Norris of the Hudson Institute makes Triomune an
investigational new drug, not a generic. Additionally, pills that may have
been tested individually can change absorption and excretion rates when
combined. The disturbing result of using insufficiently tested drugs is that
drug resistant HIV/AIDS emerges faster than it does when proper formulations are
used. Poor quality drugs and suboptimal treatment means that the virus receives
a sub-lethal dose, which encourages resistance. As Adelman and Norris assert,
the price of cheap, untested drugs is way too costly.[13]
Bioequivalence Testing. In 2004, the WHO deemed many generic
AIDS drugs non-bioequivalent to their brand name counterparts. Companies like
Indias Cipla received WHO pre-qualification for its FDCs, only to have them
withdrawn after their documentation failed to provide sufficient support for
bioequivalence. In November 2004, Indian manufacturers Ranbaxy and Hetero pulled
over a dozen antiretroviral medications, including both individual and
combination regimens, from the WHO pre-qualification lists.[14]
Most FDCs that have been approved by the WHO under its pre-qualification
system have not been tested by the FDA or an equivalent competent testing
agency. However, on January 25, 2005, the FDA tentatively approved South
African company Aspen Pharmacares co-packaged ARV drug regimen. The
agencys tentative approval means that although existing patents and
exclusivity prevent U.S. marketing of Aspens product, the co-packaged ARV
drug regimen meets the FDAs quality, safety, and efficacy standards for U.S.
marketing.[15] Aspens Lamivudine/Zidovudine FDC, prescribed along with
Nevirapine tablets, are generic versions of GlaxoSmithKlines Combivir and
Boehringer-Ingelheim Pharmaceuticals Viramune tablets. Although the brand versions of each individual drug are FDA approved, combinations of drugs must
undergo rigorous bioequivalence testing to ensure their effectiveness when taken
together.
In May 2004, the FDA issued guidelines to fast-track applications for ARV
products by speeding up paperwork and even waiving application fees. Yet only
Aspen Pharmacare has taken advantage of this offer. The failure of Indian
companies like Cipla and Ranbaxy[16] to provide bioequivalence and chemical
stability data to the FDA indicates questionable testing of its FDCs. It is
therefore not surprising that the United States has been reluctant to use money
from PEPFAR to purchase and distribute generic FDCs.
At present, only GlaxoSmithKline (GSK) and Abbott Laboratories have obtained
U.S. and European Commission approvals for combination AIDS-drug products.
Gilead, Merck, and Bristol-Meyers Squibb are currently developing a triple
combination product. Of these, the only approved triple therapy drug in one pill
is GSKs Trizivir. No other triple therapy fixed-dose combination product has
passed FDA-standard approval. Nevertheless, the WHO has pre-approved several
products for use in Africa. These FDCs, which as individual drugs are safe and
efficacious, would not be approved for use in any developed country without
significant testing data to substantiate equivalence, yet the WHO has allowed
them to be used in Africa. And in a very late and concerning development,
Gilead, Bristol-Meyers Squibb, and Merck announced on April 26, 2005, that their
FDC (consisting of brand drugs Truvada and Sustiva) had failed bioequivalence
testing.[17] As Jeffrey Kemprecos, public affairs director at Merck, told me,
the company plans to continue working until bioequivalence is
achieved.[18] It is rather interesting that the companies that developed the
best new drugs on the market have failed to achieve bioequivalence at their
first try this is why assiduous testing is so important.
FDCs can be useful, but they must be tested. They potentially lower costs and
lower drug resistance by increasing the likelihood that patients will continue
to take the drugs as prescribed (one pill is easier to keep track of than
three). But rushing to distribute untested FDCs can be counterproductive.
Profitability and Supply Constraints
In March 2001, Merck developed a pricing policy for Crixivan and Stocrin
(Efavirenz) applicable in developing countries. In the least developed countries
and those hardest hit by the AIDS epidemic, Merck makes no profit on the sale of
these medicines.[19] Without an incentive to maintain research and development,
production companies will exit.[20]
Industry insiders claim that both the generic and research-based industry are
reaching supply constraints in production of ARVs. Mercks Jeffrey Kemprecos
says that production of its drug Efavirenz has increased significantly over the
past year and that the company is adding new production capacity in anticipation
of higher demand. Forecasts, however, are not very reliable, and Merck is
uncertain about how much capacity to install, especially given that it provides
the product without earning profit in dozens of developing countries. Cipla says
that supply constraints can be overcome if buyers make upfront purchases or at
least guarantees.
Eric Noehrenberg of the International Federation of Pharmaceutical
Manufacturers Associations explains that the main reason for companies not
ramping up production even further is that the current drugs are not all
reaching their intended patients, since the capacity to deliver drugs
sustainably is lower than the capacity to manufacture the drugs. So industry is
unhappy discussing further production hikes given these constraints. Indeed, all
sectors of the industry concur that plans to expand production are greatly
complicated if current supplies are not being delivered reliable forecasts
would be helpful to manufacturers who contemplate investment in production
capacity.
Barriers to Treatment in Sub-Saharan Africa
All treatment initiatives must take into account the inherent limitations of
trying to scale up treatment rapidly and the drawbacks of ignoring those
limitations. Multiple barriers to successful implementation exist, particularly
in sub-Saharan Africa. Overcoming demand and supply-side constraints to
treatment requires realistic goal-setting and comprehensive program development.
Inadequate Delivery Systems. Poor countries often entirely
lack medical infrastructure, such as clinics, hospitals, and distribution
networks that deliver medicines to dispensing outlets. Insufficient numbers of
trained medical workers, low doctor-to-patient ratios, and lack of funding also
render the successful delivery of ART difficult.[21]
According to Dr. Eric Goemaere of MSF, South Africa alone needs as many as
100,000 trained health care workers to handle growing programs. Between 2000 and
2003, according to the South African Nursing Council, the total number of
registered nurses grew by only 3.7 percent to 96,715.[22] The majority of
countries in sub-Saharan Africa do not meet the WHOs recommended minimum
ratio of twenty physicians per 100,000 people, and the U.S.-based Physicians for
Human Rights estimates that thirteen countries in the region have fewer than
five physicians per 100,000 patients.[23] Dr. Nomonde Xundu, the new HIV/AIDS
director for South Africas national health department, stated recently that
South Africa has found only 111 out of the 220 doctors needed, as the low
average salary (190,000 rand or U.S.32,000) and working conditions in South
Africa are not attracting doctors.[24] Even when doctors are available, some are
not trained to administer ARVs, leading to improper prescription doses. In
Lesotho, Dr. Tonny Mwabury reported that out of twenty-four patients he saw, six
were on mono or dual therapy.[25] One patient had been prescribed just ten doses
of Nevirapine, which is meant to be taken indefinitely in conjunction with other
drugs.
ARV provisions are pointless if there are no personnel to distribute them
properly. In Guinea-Bissau, a shipment of Brazilian-made antiretroviral drugs
that arrived last month remains at the airport because the country does not have
trained health workers to distribute them.[26] The main reason for these
infrastructure limitations is the paltry level of health care funding in Africa,
which stems from both significant poverty and also inappropriate prioritization
of government expenditure. Additionally, even if programs distribute free ARVs,
many patients are too poor to travel to dispensing clinics.
Testing. A symptom of poor medical infrastructure and scarce
funding is the lack of availability of HIV testing. No more than 10 percent of
HIV-infected people in developing countries are aware of their infection.[27] It
is extremely doubtful that programs scaling up access to ART can be successful
without a prior expansion of HIV testing.
At the moment, estimates of infection rates come from models based on
antenatal blood testing on samples left over from syphilis tests of pregnant
women. Population estimation from such a small specific grouping is bound to be
highly inaccurate. More accurate infection numbers based on expanded testing
would prove valuable to ART programs, but impediments like poor infrastructure
render the task challenging. Additionally, the stigma and discrimination
associated with HIV-positive status (especially among women and girls)
discourages voluntary testing, not to mention the pursuit of treatment. The
alienation of HIV-positive members of the community is often harsh, especially
for the already vulnerable female population.
Taxes. In the main, both brand and generic producers have
reduced ARV prices to the benefit of many. Unfortunately, some countries
finance departments see the import of these life-saving drugs as a way of
raising revenue.[28] Southern Africa can claim to do relatively well in this
respect compared with the rest of the continent: most countries have no import
duties on medicines, although Malawi charges a 15-percent import duty and South
Africa a 14-percent sales tax.
Until recently, East African countries imported many drugs at a zero tariff
rate. However, on January 1, 2005, the East Africa Customs Union Protocol
imposed a 10-percent duty on antiretrovirals entering Uganda, Tanzania, and
Kenya. This increase makes treatment more expensive, encourages a black market
in drugs, and essentially imposes a tax on projects funded by donors. Other
African governments--for example, Nigeria, Morocco, and Algeria--maintain
significant levels of taxes and tariffs as well. However, some places exempt
ARVs from tariff and customs, but not other drugs needed for opportunistic
infections and other diseases. The result is that the lowest prices people pay
are sometimes far higher than the figures usually quoted in the press.
So What?
Setting goals for HIV/AIDS relief can be valuable as it places pressure on
the international community to act. At the same time, planting false hope and
chasing unrealistic numbers can be dangerous. According to Merle Sande and Allan
Ronald of the American Medical Association, to scale up antiretroviral
therapy for HIV without ensuring infrastructure, including trained
practitioners, a safe and reliable drug delivery system, and simple but
effective models for continuity of care, would be a disaster, leading to
ineffective treatment and rapid development of resistance.[29] Ineffective
drugs, specifically untested and improperly prescribed FDCs, encourage resistant
strains of HIV and render the path ahead more treacherous. Antiretroviral
initiatives hinged on low-priced drugs that do not include funding for
infrastructure improvements, staffing, testing, and counseling will not
successfully treat large numbers of patients.
The Clinton Foundation may indeed have brokered phenomenal deals on
medication, but in that case, why are other organizations denied access to lower
ARV prices? Public demands that pharmaceutical companies deeply discount
much-needed ARVs in areas such as sub-Saharan Africa, coupled with the political
will to defend these offers against exploitation in rich and emerging market
countries, are a powerful force for change. Indeed, public-private partnerships
have enabled companies to offer high quality medicines to poor countries.
In publishing the availability of first line ARVs at a mere 140 per year,
the Clinton Foundation has fueled speculation that still lower prices are
possible. But the fight against HIV/AIDS requires more than placing millions of
HIV-infected people on less expensive (often inferior quality) medication in a
short period of time, even if that were possible. Programs need to recognize the
high cost of second line treatments for those who develop drug resistance, the
lack of ARVs for children, and the costs of testing and transportation above and
beyond cheap medication. Setting short-term goals may enroll large numbers in
treatment and prove that programs like 3 by 5 are working,
increasing access to further funding. However, long-term planning is what will
ultimately extend lives and reduce the devastating impact of the HIV/AIDS
pandemic.
Confusion over how many people are being treated with ARVs and over the
prices of those ARVs is a symptom of a larger problem. Honorable mandates
seeking financial and media support often use numbers to attract attention and
outline clear-cut goals. The media, and therefore the public, cling to figures
like 140 and 3 million without appreciating what these numbers mean: 140 means
a supply of the copycat, non-bioequivalent fixed-dose combination drugs
available, if taxes and lack of infrastructure do not hinder their free
delivery 3 million means the rapid dispensing of complex, toxic, sensitive
therapy to people in the short run with little regard for long-run resistance
and moral hazard problems. These numbers are not irrelevant, but they must be
interpreted carefully. Numbers, if inaccurate or unrealistic, can be very
hazardous, especially in the case of HIV/AIDS treatment.
Roger Bate is a resident fellow at AEI. Intern Courtney Gillespie also
contributed to this essay.
//Link to whole article: http://www.aei.org/publications/pubID.22469/pub_detail.asp
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