Global Insight Perspective | |
Significance | The new tiered price structure is a heavy discount over existing generic prices and will be available in approximately 40 countries. |
Implications | This is the second cut for Kaletra/Aluvia authorised by Abbott in a space of eight months and reflects the pressure on the company to address the anti-retroviral-drug pricing issue on humanitarian grounds. The discount will be particularly beneficial to countries in sub Saharan Africa and South Asia where the incidence of AIDS is particularly high. |
Outlook | Access of second-line HIV/AIDS treatment will increase as a result of this move in middle and low-income countries, but pressure remains to bring down prices even further. |
U.S. pharma major Abbott has announced a new price for its anti-retroviral drug Kaletra/Aluvia (lopinavir/ritonavir, tablets and capsules) for 40 middle and low-income countries after an agreement with the World Health Organization (WHO). In a press release, the company said that it would continue to support long-term research in the therapeutic segment. The U.S. drug maker will offer the drug to governments and non-governmental organisations at a price of US$1000 per patient per year. The company claims that the new price is 55% lower than the current average price of Kaletra in these countries and is lower than any generic version. Following this announcement, Abbott will begin discussions with governments in countries where its patent on Kaletra is protected to "maximize" patient coverage, the source adds.
Kaletra is indicated for the treatment of HIV-1 infected adults and children above the age of two years, in combination with other anti-retroviral agents. The drug received U.S. FDA approval in 2000 and has since been available in 118 countries as a vital second-line HIV treatment. Aluvia, the company's tablet version, gained approval in 2005 and Abbott is to step up registrations in 150 countries. The drug maker came up with the tablet form of the protease inhibitor, aimed at reducing pill burden and more importantly for sub-Saharan African countries, avoiding the requirement of refrigeration storage.
WHO figures from June 2006 suggests that coverage of anti-retroviral therapy in low and middle-income countries reaches up to 1.6 million patients. In sub-Saharan Africa, the number of patients receiving anti-retroviral treatment is up to over one million from 100,000 recorded in 2003. Significantly, 76% of those in need in the low/middle-income countries remain untreated.
Outlook and Implications
Abbott's move to agree to the new discounting price structure is an expected one, given the pressure exerted by non-governmental groups such as Médicins Sans Frontières and by certain Asian governments, which have issued compulsory licensing measures. The development is the result of negotiations between the international health agency and the drug maker in an effort to expand second-line AIDS therapy coverage. Abbott has so far resisted efforts for large-scale licensing to generic firms in these countries and will face further pressures to bring down pricing.
Second-line AIDS treatments are retailed at an upper cap of US$5,000 per patient per year in the countries mentioned in the report. This includes proprietary drugs such as Gilead's Truvada (tenofovir disproxil fumarate/emitricitabine) and BMS' Sustiva (efavirenz). Following criticism and pressure from humanitarian groups, these firms have entered into a licensing pact with generic drug makers to ease pressure. In comparison, first-line drugs are available at US$1,100 per person per year. The current price structure for Kaletra is still likely to attract some protest as non-governmental organisations will argue that it is still unaffordable at US$2.7 per patient per day. However, Abbott is likely to resist this pressure.
The announcement provides a boost for sub-Saharan African countries that have recently stepped up efforts to increase anti-retroviral coverage. The free distribution programmes operated by the public sector as well as non-governmental organisations are expected to include Kaletra/Aluvia as concerns mount over higher incidence following drug resistance and a relatively high prevalence of opportunistic infections. It is significant to note here that the shift towards including second-line therapies has occurred not only in Africa but also in countries such as India, where the government is contemplating delaying the inclusion of these drugs due to the high costs involved.
Related Articles:
- Sub-Saharan Africa: 20 September 2006: Progress Report on ARV Consumption Names Uganda, Kenya as Leaders in East Africa
- United States: 15 August 2006: Abbott to Reduce Kaletra Price for Low and Middle-Income Countries
- India: 11 August 2006: Government May Delay Inclusion of Second-Line AIDS Treatment in India's National Programme
- World: 13 January 2006: Second-Line AIDS Treatments to Cost Less for Clinton Foundation Beneficiaries