Access to Medicines/Access to Markets

When I attended BIO 2010, Biotechnology Industry Organization’s annual gabfest with 15,000 others in Chicago May 3-6 (BIO 2010), I was disappointed at not being able to attend a special session on May 5.  The Clinton Health Access Initiative (CHAI), represented by Inder Singh, their director of drug access, and BIO Ventures for Global Health (BVGH) co-held an information session on “opportunities for pharmaceutical companies to achieve their corporate objectives through the appropriate design of Access to Medicines Strategies.”  However, Inder was kind enough to send me his slides in which were outlined the substantial progress CHAI’s Drug Access Team (DAT) has been making in designing, testing, and implementing a drug access plan that, as they noted, may be a “model of engaging pharmaceutical companies to achieve their access objectives.”  As is well-known, access to essential medicines by the global uninsured population is poor to non-existent and a major world problem (WHO Essential Medicines).  The primary current mode of access is for the producing companies to sell into markets where there are those who can afford to pay or to donors who distribute the drugs free.  But as Inder described, the evolution of the AIDS/HIV anti-retroviral (ARV) drug market from the early 2000s to now provides an example for an alternative approach, one that showed multiple benefits;  it increased the number of patients receiving ARV, decreased the costs of ARV, supported the innovation of better drugs (mostly in the form of “fixed-dose-combinations,” or FDCs), and, of interest to companies, increased the size of the overall market (now estimated at more than $1 billion).

This innovative approach was pioneered by Gilead Sciences (a 20-year old, publicly-traded company in CA with 2009 revenues of about $7 million, Gilead Financial Snapshot), the elements of which are:  tiered pricing in the low/middle income countries based on per capita income and disease burden; broad, low-cost, nonexclusive licensing to generic drug makers; and a distribution system composed of public and private partners which Gilead supports with product-specific training (Gilead Access Program).  In parallel to this approach and over the past four years, the DAT has worked to change the economics of HIV/AIDS treatment by negotiating supply agreements between companies and the public-sector customers.  The result has been, according to the presentation  (note to CHAI:  do a better job of self-promotion on your website) agreements with 16 companies that lowered prices by >50% for 42 drug formulations and 3 diagnostics and improving ARV access for 2.6 million patients.

Building on the Gilead approach and its experience, the DAT drew up an “Innovator Access to Medicines Strategy which Inder presented at the BIO session (sorry, not publicly available).  I’ll boil it down to just a few key practices that run contrary to the “conventional wisdom” in big pharma product licensing and launch practice:  license broadly to low-cost, high-quality generic manufacturers who are likely to enter most potential markets (i.e., increase access and revenue), allow licensees to invent “new” drugs through FDCs  to increase revenue opportunities, register broadly to create robust private markets for your licensees, and partner with (sell to) the leading public sector purveyors to ensure appropriate adoption and use at an affordable and fair price (mutual value).   The presentation also included three case studies of which I try to summarize the first since I lack the details on the other two.  In the first, the DAT negotiated with Pfizer a lower price for its antibiotic, Rifabutin, for developing country markets for treatment of co-infected TB/HIV patients.  The results for the providers were lower per patient costs and better clinical outcomes; for Pfizer, increased Rifabutin sales and experience in entering a new market.  The last slide gave “Key Questions to Consider” that are likely good starting point for discussions on the strategy with companies.

Clearly, I am not a health economist and have done little study of this topic, so am not qualified to provide a weighty review of the DAT strategy, but here’s my off-the-cuff spin.  The biotech/pharma industry is struggling to find new markets and they see the risks in the emerging/developing (or low/middle income) countries as multiple and indistinct, but mostly the risks reduce down to a lack of structure and the accompanying level playing field that for-profits need to function.  The DAT strategy is an important step forward in providing rules of engagement, a rationale market place, a path to predicable demand and therefore “sustainable” (economically viable) supply.  This isn’t to say this approach will solve the problem of access to essential drugs, but the DAT work is substantial progress and is a good complement to the advanced market commitment and other public-sector “pull” approaches.

I’m interested in learning what/how/if there were comments from corporate representatives at the presentation or in any one-on-one meetings the DAT may have had.  I’d also suggest in those conversations the DAT present the strategy not as an extension of a company’s existing “access to medicines program,” which most of the major pharma have as part of their corporate social responsibility effort (c.f., my posting of January 28), but as much needed tool to accessing new markets (and staying in business).

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