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CHAI, UNITAID, and DFID Announce Lower Prices for HIV/AIDS Medicines in
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Partnership to Reduce ARV Prices will Yield Savings
of at Least $600 Million Over 3 Years
Boston, MA; Geneva; and London, 17 May 2011 ? Today, the Clinton Health
Access Initiative (CHAI), UNITAID, and the UK?s Department for International
Development (DFID) announced further price reductions on key antiretroviral
(ARV) drug regimens used to treat HIV/AIDS in the developing world. This
announcement represents the latest in a series of price reductions on
?next-generation? ARVs that have been accomplished through the collaborative
efforts of the three organizations. Since 2008, this partnership has
achieved price reductions that will generate global savings of at least US$
600i 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
?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 US$ 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 US$ 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 US$ 410
per year, down sharply from 2008 when low-income countries paid an average
of US$ 800- US$ 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 US$ 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 US$ 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 US$ 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 US$ 600 million in total
cost savings over the next three years.
CHAI ceiling prices for these and other products can be found at:
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 US$ 159
(the regimen is also available as a single pill for less than US$ 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 US$ 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 US$ 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
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.
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 US$
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 and raw
materials, including Aptuit Laurus, Aurobindo Pharma, Cipla, Emcure, Hetero,
Mahidhara, 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.
i 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 $600
million savings estimate conservatively assumes no scale-up in the total
number of patients being treated with ARVs in light of funding
uncertainties, but assumes that product preferences among existing patients
will continue to shift in favor of TDF in first-line and ATV in second-line.
If patient scale-up continues at its recent pace, savings could exceed US$ 1
billion over the next three years.