Bending the Curve Replay

I’m still in vacation mode so here is a post from February of this year.

Clearly, HIV/AIDS is a major public health problem in sub-Saharan Africa where, according to the WHO, about 1 in 20 is infected, 60% of all of the people living with AIDS reside, and 1.2 million died of the disease in 2011. Fortunately, with two decades’ input of money, technology, and organization from local and donor country governments, NGOs, and companies, 10 million of the estimated 35 million infected are receiving anti-viral therapy with a better chance of living a relatively long and productive life. The ideal and long-term goal for the public health system is to bend the incidence and mortality curves downward via prevention, early detection, treatment, and monitoring during treatment. Of course, turning back the epidemic also requires treatment for co-infections like tuberculosis and hepatitis C and improved living conditions and nutrition- a tall order. Progress is being made in turning diagnostic technology into products, and I have noted four advances made over the past year that are worth mentioning.

Last August, a product was released that provides earlier and better detection of infection. Alere, a three billion-plus dollar revenue diagnostics company based in nearby Waltham, MA, received FDA approval for its point-of-care (POC) Determine HIV-1/2 Ag/Ab Combo test, which detects an HIV-1 antigen and antibodies to HIV-1 and HIV-2. As noted in the company press release, it is the first test of its kind, and its ease of use makes it ideal for public health settings where lab-based diagnostics are not practical. While the release also indicates that the test is aimed at the US, the product may deployed to developing world markets in the near future. As I noted in my post last March (“DX Rock Stars”), Alere received a $42 million grant from the Gates Foundation for the development of a tuberculosis POC test (mostly) and for the manufacture of a lab-based HIV viral load test (partly). In that post, I posited that Alere was building a developing world/global health diagnostic business, so this new assay may be part of that business.

More recently, Sedia Biosciences, a Oregon-based early-stage company, was awarded a $1 million NIH Phase II SBIR grant to develop an FDA-approved version of its HIV test that is currently used in public health to assess HIV prevalence (FierceDiagnostics article and Venture Beat article). The assay measures HIV-1 antibody binding ability that is a measure of antibody maturation and therefore an indirect indicator of disease progression. Some research has indicated that, in the US anyway, 40 to 50% of new HIV infections come from infected persons who were recently infected and therefore have high viral loads so finding these recently infected persons may help reduce the overall rate of infection. Since the assay is POC and more informative, it may replace the current widely available, rapid HIV tests in Africa if priced right.

There are two companies that are making progress in the development of products for the monitoring of the response of the disease to treatment. The first is Zyomyx of Fremont, CA, which last June signed a financing and distribution agreement with Mylan Laboratories, Inc. (Mylan), a major generic pharma company based in Pennsylvania, for its CD4-positive T-cell count test, a primary measurement of disease progression (FierceMedicalDevices article). Zyomyx’s test is disposable and low-cost ($10 each), works without electronics or instrumentation, and is therefore ideal for developing-world use. The assay is the result of a novel product development effort by the CD4 Initiative, a program based at Imperial College in the UK and funded by the Gates Foundation that started in 2006 with a call for proposals and the awarding of support to six academic and industrial groups including Zyomyx. In my opinion, this model is worthy of study and imitation for any group, foundation, or company serious about global health product development. As for the next steps, Zyomyx will use the new financing, that totals $12 million of which $6 million is from Mylan and the rest from existing investors including the Gates Foundation, to secure US and other regulatory approvals and to scale up manufacturing. The diagnostic deal is a first for Mylan, and it intends worldwide distribution in conjunction with sales of its antiretroviral drugs that are currently used in more than 120 countries and by nearly 40% of HIV/AIDS patients receiving treatment in the developing world (Zyomyx-Mylan press release). Mylan also has agreed to the “global access” terms accepted by Zyomyx as part of its Gates funding (a total of $16 million it received over five years) that essentially require Mylan to distribute the test at a reasonable price. It will be interesting to see how well the Mylan sales team has done its pre-deal work and what price its customers, probably public health agencies subsidized by donor governments or foundations, will find reasonable (no sales have been announced to date). With a patient base of 10 million growing to millions more in Africa alone and testing done on each about twice a year, even an affordable price should generate tens of millions in annual revenue.

The second company is Daktari Diagnostics that is developing a competing technology for CD4 counts (a portable reader and cassette system requiring no sample preparation) and that I have mentioned in previous posts (e.g., “B2B2B2” ). Daktari is a local firm and one of the few global health companies started with venture capital, about $3 million in 2009 followed by another $6.25 million in 2011. Last May the company raised an additional $7 million with the proceeds to be applied to hiring 126 more employees and building operations in Scotland (Boston Business Journal blog). Last month, the company announced receipt of ISO certification of its device and manufacturing process, an important commercial milestone (Daktari press release). And this week, Bill Rodriguez, Daktari’s CEO, said in an interview that the company is in the process of completing a $25 million Series D round to be used to expand its sales and support staff to service eleven African countries and to support development of additional products (FierceDiagnostics article). Next step should be a sales deal. According to Bill: “We’re looking at initial product orders in the hundreds of thousands of tests.”

Advertisements

Bending the Curve

Clearly, HIV/AIDS is a major public health problem in sub-Saharan Africa where, according to the WHO, about 1 in 20 is infected, 60% of all of the people living with AIDS reside, and 1.2 million died of the disease in 2011.  Fortunately, with two decades’ input of money, technology, and organization from local and donor country governments, NGOs, and companies, 10 million of the estimated 35 million infected are receiving anti-viral therapy with a better chance of living a relatively long and productive life.  The ideal and long-term goal for the public health system is to bend the incidence and mortality curves downward via prevention, early detection, treatment, and monitoring during treatment.  Of course, turning back the epidemic also requires treatment for co-infections like tuberculosis and hepatitis C and improved living conditions and nutrition- a tall order.  Progress is being made in turning diagnostic technology into products, and I have noted four advances made over the past year that are worth mentioning.

Last August, a product was released that provides earlier and better detection of infection.  Alere, a three billion-plus dollar revenue diagnostics company based in nearby Waltham, MA, received FDA approval for its point-of-care (POC) Determine HIV-1/2 Ag/Ab Combo test, which detects an HIV-1 antigen and antibodies to HIV-1 and HIV-2.  As noted in the company press release, it is the first test of its kind, and its ease of use makes it ideal for public health settings where lab-based diagnostics are not practical.  While the release also indicates that the test is aimed at the US, the product may deployed to developing world markets in the near future.  As I noted in my post last March (“DX Rock Stars”), Alere received a $42 million grant from the Gates Foundation for the development of a tuberculosis POC test (mostly) and for the manufacture of a lab-based HIV viral load test (partly).  In that post, I posited that Alere was building a developing world/global health diagnostic business, so this new assay may be part of that business.

More recently, Sedia Biosciences, a Oregon-based early-stage company, was awarded a $1 million NIH Phase II SBIR grant to develop an FDA-approved version of its HIV test that is currently used in public health to assess HIV prevalence (FierceDiagnostics article and Venture Beat article).  The assay measures HIV-1 antibody binding ability that is a measure of antibody maturation and therefore an indirect indicator of disease progression.  Some research has indicated that, in the US anyway, 40 to 50% of new HIV infections come from infected persons who were recently infected and therefore have high viral loads so finding these recently infected persons may help reduce the overall rate of infection.  Since the assay is POC and more informative, it may replace the current widely available, rapid HIV tests in Africa if priced right.

There are two companies that are making progress in the development of products for the monitoring of the response of the disease to treatment.  The first is Zyomyx of Fremont, CA, which last June signed a financing and distribution agreement with Mylan Laboratories, Inc. (Mylan), a major generic pharma company based in Pennsylvania, for its CD4-positive T-cell count test, a primary measurement of disease progression (FierceMedicalDevices article).  Zyomyx’s test is disposable and low-cost ($10 each), works without electronics or instrumentation, and is therefore ideal for developing-world use.  The assay is the result of a novel product development effort by the CD4 Initiative, a program based at Imperial College in the UK and funded by the Gates Foundation that started in 2006 with a call for proposals and the awarding of support to six academic and industrial groups including Zyomyx.  In my opinion, this model is worthy of study and imitation for any group, foundation, or company serious about global health product development.  As for the next steps, Zyomyx will use the new financing, that totals $12 million of which $6 million is from Mylan and the rest from existing investors including the Gates Foundation, to secure US and other regulatory approvals and to scale up manufacturing.  The diagnostic deal is a first for Mylan, and it intends worldwide distribution in conjunction with sales of its antiretroviral drugs that are currently used in more than 120 countries and by nearly 40% of HIV/AIDS patients receiving treatment in the developing world (Zyomyx-Mylan press release).  Mylan also has agreed to the “global access” terms accepted by Zyomyx as part of its Gates funding (a total of $16 million it received over five years) that essentially require Mylan to distribute the test at a reasonable price.  It will be interesting to see how well the Mylan sales team has done its pre-deal work and what price its customers, probably public health agencies subsidized by donor governments or foundations, will find reasonable (no sales have been announced to date).  With a patient base of 10 million growing to millions more in Africa alone and testing done on each about twice a year, even an affordable price should generate tens of millions in annual revenue.

The second company is Daktari Diagnostics that is developing a competing technology for CD4 counts (a portable reader and cassette system requiring no sample preparation) and that I have mentioned in previous posts (e.g., “B2B2B2” ).  Daktari is a local firm and one of the few global health companies started with venture capital, about $3 million in 2009 followed by another $6.25 million in 2011.  Last May the company raised an additional $7 million with the proceeds to be applied to hiring 126 more employees and building operations in Scotland (Boston Business Journal blog).  Last month, the company announced receipt of ISO certification of its device and manufacturing process, an important commercial milestone (Daktari press release).  And this week, Bill Rodriguez, Daktari’s CEO, said in an interview that the company is in the process of completing a $25 million Series D round to be used to expand its sales and support staff to service eleven African countries and to support development of additional products (FierceDiagnostics article).  Next step should be a sales deal.  According to Bill:  “We’re looking at initial product orders in the hundreds of thousands of tests.”

Out in Left Field Again

The big news this week in the world of global health was the announcement by the Global Alliance for TB Drug Development that a combination of drugs (one completely novel drug candidate, a new TB drug candidate already approved to treat other infectious diseases, and one existing TB drug) was shown in a 14-day Phase II study to eliminate the infection in two weeks (TB Alliance brief).  Moreover, the Alliance noted the results indicate that the combination may be compatible with anti-retroviral treatment (TB is a major killer of HIV patients) and may be effective against the drug resistant forms of TB (Diacon 2012).   Also noted was that additional studies of this combination and another are underway and are needed to establish clinical utility, but clearly the results promise a better, faster, and more affordable drug therapy for TB.

As regular readers may remember I wrote about a different direction to TB therapy development last month and since I am just back from vacation, I am re-gifting that posting on two companies that are working on immuno-therapeutic approaches.

TB is one of the big three global infectious diseases (along with HIV/AIDS and malaria) and there are major international efforts, public and private, to development better drugs (see my post “TB DD Needy”) and vaccines (see the recently issued plan for vaccine development [Aeras Blueprint] and the announcement of a $220 million Gates grant to Aeras, the non-profit vaccine developer [Aeras Grant]).  Of less interest to the TB R and D community is a mash up of drug therapy and vaccines or “immunotherapy” which uses killed mycobacteria (a type of vaccine) to either rev up the immune system to eliminate a latent infection or to turn it down to increase the susceptibility of an active infection to drugs.  I’m no expert, but attribute the lack of interest among the mainstream researchers to slipperiness of immunotherapy data and that being unconventional is a risk to one’s career.

In any case, I wrote about clinical progress being made by a company taking the “rev up” route, Archivel Farma of Spain, about two years ago (“Una Sorpresa Prometedora” 6/24/10).  The company’s therapeutic is a heat-killed and “detoxified” M. tuberculosis prep (RUTI) which is co-administered with a standard TB drug over a one-month period and which apparently successfully completed a Phase II trial last June (Bio Cat News) (but apparently the data have not been published).  In December, the company raised more money and plans to go to Phase III at a cost of 10 million euros (Bio Cat News) in 2013 (January 2012 press release).  Unfortunately, my timing was off when I stopped in at the Archivel booth at the BIO 2012 conference I attended in late June, and I was not able to get an update.

The “turn down” approach seems counter-intuitive to me but is being taken by Immunitor/Immune Networks Ltd. of Vancouver, Canada, the source of the recent report of clinical progress.  According to a May 31 article in FierceVaccines (FV article) and press release (FV press release), in a Phase II trial more than 100 TB patients, including those being re-treated and with MDR-TB or with HIV co-infection, were treated daily with tablets containing heat-killed M. vaccae, a related strain, concurrently with either first- or second-line TB drugs.  After a month, 77.8% of the treated patients as opposed to 19% among placebo recipients had no M. tuberculosis in sputum smears (a standard measure of active infection).  Moreover, the same results were seen in the treatment-failed TB, MDR-TB, and HIV-TB groups.  The implication is that, due to a shorter treatment time, the “V7 vaccine” will reduce the chance of drug resistance and, due to oral dosing and low-cost, will be more available.  The press release also mentioned two studies, evidently done by other companies, Immodulon of the UK and Anhui Longcom Biologic Pharmacy Co., Ltd. of China, that showed efficacy with injectable forms of M. vaccae with drugs in treating MDR-TB, so V7 may work on these infections.

I tried to learn more about Immunitor and Immune Networks Ltd., but did not find much information.  Immune Networks has a cranky website with broken links (IN) and is apparently a publicly-owned company whose stock trades on the OTC/Vancouver Stock Exchange for pennies per share.  Immunitor has a functional website (Immunitor), developed the technology for making tablet forms of vaccines, and was apparently privately owned until IM bought 50% of it with stock in February 2011 (Globe Newswire).  Immunitor also says it has four products on the market and five in development (Products).  On the other hand, Immune Networks says it is delinquent in its regulatory filings due to financial constraints and is suing a contractor (IN Home).  But apparently, someone in the National Research Council of Canada likes them because the joint company received a unspecified grant under a cooperative research agreement in November 2011 (PR Web release).  More recently (this month, July), Immunitor’s principal investigator, Dmytro Butov, noted that a Phase III trial will start in the near future (Online PR).

While “out in left field” means to be nonsensical or absurd, “out of left field” means without warning, a surprise.  I am hoping that for the Archivel and Immunitor immunotherapies, the latter is more apropos.

AIDS Aid (Maybe)

In my last post (“Thanksgiving”), I wrote about the progress reported recently by Bionor, a small Norwegian company, in testing its therapeutic vaccine for HIV/AIDS (Bionor Nov PR).  Given that yesterday was World AIDS Day, I thought I would continue in that vein and look at the other (too few) companies that are working on these vaccines.  [In case you missed it, this year’s World AIDS Day theme is universal access, a good idea when treatment saves lives; the Day is on December 1 because back in 1988 a PR guy saw a news lull between elections and Christmas (Wikipedia article on WAD).]  As I noted previously, therapeutic vaccines are intended to be given to HIV-positive individuals to increase cell-mediated immunity to both lower HIV viral load (viruses in the blood) and resist other potentially life-threatening pathogens and were once thought to be a dead end due to clinical failures in the 1990s (Nature article).  This past year a handful of companies have reported promising early-stage clinical results.

The US company of the group is Argos Therapeutics of Durham, NC, (Argos) which is a 1997 spinout from Duke University and has raised about $120 million in private capital in four rounds (TechJournal article) in addition to receiving a $21 million NIH contract for platform development in 2006 (Argos platform) which is also funding the development of their HIV vaccine.  The company’s approach is “personalized immunotherapy,” meaning a patient’s dendritic cells (antigen-presenting immune system cells) are harvested, transfected with the target cell or virus RNA, and then re-injected to boost the immune system response (an ex vivo vaccination).  The upside is that the therapy is specific to all the genetic variants found in the patient; the downside is its costly and not suited for resource-limited settings.  Argos’s lead product is for treating metastatic renal cell carcinoma which likely explains the investor enthusiasm.  The FDA recently approved a similar approach, Dendreon’s Provenge for prostate cancer (a cancer of old guys who are likely to die of something else).  Provenge extends survival about three months and costs about $93,000 per treatment or $23,000 per month of additional life (Xconomy article) or about what it costs to treat 133 HIV-infected Africans with antiviral drugs for a year.  Argos’s HIV product, AGS-400, substantially decreased viral load in a Phase IIb trial involving about 40 patients who were temporarily not on antiretroviral drug therapy (Biotech Now article, Biotech Now article).

Of more interest to me is Genetic Immunity of Budapest, Hungary (GI), founded in 1998 by former NIH researcher and now Semmelweiss University professor, Julianna Lisziewicz.  GI apparently has friend, family, and angel investor funding including a $2 million “bridge” investment (loan?) in 2007 (GI press release). The company’s lead product is DermaVir Patch consisting of: (1) a novel and proprietary plasmid DNA antigen that expresses the majority of HIV genes and doesn’t replicate or integrate; (2) a new “nanoparticle” formulation that targets dendritic cells and protects the plasmid from degradation; and (3) a new topical vaccine administration device, called DermaPrep Patch (NanoMed Cluster description).  Despite the risk inherent in a product that depends on three novel and unproven technologies, GI’s Phase II trial in 36 infected but untreated patients resulted in decreased viral load and increased HIV-specific memory T-cells (Another GI press release).  DermaVir is the company’s lead product, and it has  preclinical programs for Chlamydia and papilloma virus infections and allergy (GI pipeline).  Where GI will get the funding for further development is a question.  The company is in the process of merging with another company that its founders also founded, the US-Italian ViroStatics (Virostatics), to form Immunacia, “a multinational biopharmaceutical company dedicated to developing treatments that partner with the immune system to improve human health” (GI About).

My favorite of the bunch, though, is FIT Biotech Oy which was established in 1995 and has 25 employees at its base in Tampere, Finland, and a 12-person r and d group in Tartu, Estonia (FIT).  The company is funded by its founders, local private investors, and grants from the Finnish National Fund for Development and Innovation and the European Commission (FIT presentation).  The basis of the company’s HIV vaccine is a proprietary DNA vector called the Gene Transport Unit which is loaded up with a lots (7?) of HIV-specific antigens (FIT technology) and, when injected into a patient, should stimulate multiple antigen presentation and a strong T-cell response (Wikipedia DNA vaccine article).  The vaccine, called FIT-06, evidently also uses a liposomal delivery system licensed from ImmunoVaccine Technologies of Canada (Medical News article).  Their Phase II study in 60 previously-untreated patients in South Africa reported decreased viral load and increased CD4-postive T-cell levels (FIT press release).  Interestingly, FIT Biotech’s business model appears to be based on developing vaccines for neglected diseases, including tuberculosis, dengue, and malaria, and not-so-neglected HIV (a preventative vaccine) and influenza (Another FIT press release).

So what are the take-home lessons?  1) Biopharmaceutical product innovation is a long hard slog and only for the dedicated and self-motivated (these companies have been at it for 12-15 years).  2) And it may require concatenation of multiple novel technologies.  3) It is possible to reach Phase II trials of vaccines with relatively modest funding (like under $10 million).  4) The powers-that-be in AIDS research focus HIV vaccine development funding on conventional paths and ignore (or downplay) unconventional approaches (c.f., “These early trials involve small numbers of people,” says Carl Dieffenbach, head of the NIAID AIDS division. “It would be wrong to foster false hopes.” [Nature article]).  5) There are three companies in this space that are good investment opportunities (promising clinical results and low prices), Bionor, Genetic Immunity, and FIT (I exclude Argos whose current investors likely want 5X), and foundations, product development partnerships (PDPs like the International AIDS Vaccine Institute), and big pharma companies should get on board quickly.  6) There may be light at the end of the tunnel.

Thanksgiving

The existence of the Human Immunodeficiency Virus (HIV) and the disease it causes, Acquired Immunodeficiency Syndrome (AIDS), is a good demonstration of the capability of evolution to find exceedingly successful designs.  As a retrovirus, HIV becomes a permanent feature of the infected person’s genome.  It infects and kills slowly immune system cells, the helper T cells, macrophages, and dendritic cells, that are critical for cell-mediated immunity, thus disabling a person’s primary defense (Wikipedia article).  Its lethality is secondary to infection (death is due to other opportunistic pathogenic organisms or cancer) and slow, allowing lots of time for the virus to be transmitted to other hosts.  Its main mode of transmission, sexual intercourse, is the result of a basic human psychological drive.  HIV could only be worse for humankind if it were more easily transmitted (like through exhaled air) or if it infected germ cells (sperm and eggs).  For those with an anthropomorphic bend, HIV is a good demonstration that God is either highly moral (punishing people for having sex), immoral (giving people sexual desire and then punishing them), or amoral (and a damn good designer).

Last week though, there was news deserving of thanksgiving.  Bionor Pharma, a small, public company in Oslo, Norway, announced progress in its effort to development a therapeutic vaccine for treating AIDS.  The intent of the vaccine is not to prevent infection but complement drug therapy (Antiretroviral Therapy or ART) by helping the immune system fight the infection and recover to the point where it can resist the opportunistic infections.  Such a vaccine may also allow for decreased doses (less expensive, less likely to induce drug-resistant HIV variants, fewer and/or less severe side effects) or interrupted dosing (ART involves multiple drugs and twice daily dosing).  On November 18, Bionor announced that a secondary analysis of Phase IIB trial data found that the vaccine, called Vacc-4x, caused an “unexpected statistically significant reduction in viral load (amount of HIV virus)” (Bionor Nov PR).  The finding was “unexpected” since previously on October 1, the company had announced that the study was not successful in meeting its original goal of increasing the number of CD4-positive T cells  (a standard measure of clinical improvement) (Bionor Oct PR).  In addition to reversing the previous 300% decline in the company’s stock price (Bloomberg article, Bloomberg article), the results are good news for the resource-limited parts of the world where the vast majority of the 35 million people diagnosed with AIDS, and millions more undiagnosed, live and where access to drugs is compromised.  According to the report in Fierce Biotech (FB article), the results drew praise from a number of unaffiliated HIV/AIDS experts and led Bionor’s CEO, an admittedly biased source, to state:  “A possible application of Vacc-4x is a combination therapy with repeated ART-Vacc-4x together with analytical treatment interruptions in order to establish a functional cure [my emphasis].”

Interestingly, Bionor’s progress with Vacc-4x is the latest in a handful of Phase II clinical successes with therapeutic vaccines, three of which were reported at the summer’s International AIDS Conference (Nature article).  Apparently, therapeutic AIDS vaccine trials failed in the early 1990s and the conventional wisdom among the AIDS research “leaders” (i.e., those who have been successful in getting funding from governments and foundations) is that they don’t/won’t work.  For example, the International AIDS Vaccine Institute, with an annual budget of more than $100 million from the Gates Foundation and other sources, is expressly looking only for a preventative vaccine (IAVI), and IAVI’s CEO, Seth Berkley, whose salary is more than $500,000 per year (Charity Navigator), made no mention of therapeutic vaccines or their recent progress his November 18 talk at the Harvard School of Public Health (Harvard Gazette article).

Fortunately, the market-driven, biotech product evolution leads to entrepreneurs and entrepreneurial scientists starting companies based on ideas that run contrary to the conventional wisdom, so therapeutic vaccines may succeed.  Perhaps the managers of the companies pursing these vaccines will be encouraged by Bionor’s experience and will design trials to find and quantify “unexpected” therapeutic success.  Further, I hoped they are able to use the success to attract investment to continue development since a therapeutic vaccine will be especially important in global health and the preventive vaccine cartel seems have a strong grip on the sources of late-stage funding.  For the record the other companies mentioned in the Nature article are:

Knickers in a Twist

A few AIDS aid advocates have their knickers in a twist.  Back in December 2009, the executive board of Unitaid, the Swiss-based drug access and global health advocacy organization (Unitaid), approved an implementation plan, two yeas in the making, for a “Medicines Patent Pool” intended to facilitate the licensing of HIV/AIDS drugs and decrease their prices to public-sector purchasers (Exec Summary Patent Pool Plan).  The pool administrators will invite any company with relevant patents (they have identified 9 companies and 19 drugs) to donate that IP and will grant nonexclusive licenses at no/low royalty rates to qualifying manufacturers who, in turn, will flood the market with low-cost, high-quality drugs and drug combinations that are increasingly needed to treat the estimated 6.7 million needing treatment (about two-thirds of the total, Unitaid AIDS).  Two weeks ago, a Unitaid spokesperson was cited as saying that three companies (Merck, Gilead, and Tibotec [owned by Johnson and Johnson]) “are in advanced talks” and “we are now talking about how rather than whether,” while one (ViiV Healthcare, whose largest shareholders are Pfizer and GlaxoSmithKline) is “the least interested in making this work” (Reuters article).  In my experience public statements about ongoing negotiations are in bad form and may be counter productive, but needless to say these comments add to the pressure directed at the innovator companies, especially GSK.  Medecines Sans Frontiers has a multi-pronged campaign aimed at the companies (Make It Happen), Oxfam has called for their participation (Oxfam PR), an undersecretary of state in the UK government has chimed in (Lancet comment), and at least one blogger is firing at “greedy Glaxo” (Pharmexec blog).

Evil companies behaving badly or yet another well-meaning but misguided bureaucratic morass in the AIDS aid industry (of which there seem to be too many; see my posting of April 15, 2010, and a recent opinion piece, Business Daily opinion)?  As a former licensing professional, I looked at some of rationale for pooling offered by Unitaid:   that the pool will reduce transactions costs (time and money spent writing agreements), the resulting drugs will have lower prices, and the pool will be attractive to the participants (licensors and licensees).  I’m not convinced.  First, for big pharma, transaction costs are less than pocket change; licensing is more about finding trusted partners who will have access to IP, technology, and know-how.  Further, at least two of the HIV drug innovator companies already have a proactive, no/low royalty, HIV drug licensing programs.  As part of its Access Program since 2006, Gilead  has provided nonexclusive licenses to multiple generic manufacturers (Gilead Fact Sheet and Gilead HIV Drug Access).  GSK has stated that Viiv is and will pursue “widespread licensing” (GSK Access) and CEO Andrew Witty has said the licenses have been and will continue to be royalty-free (January 20, 2010, In Vivo blog, and July 17, 2010, PRI report).

Second, more products don’t a priori mean affordable prices since even the generic companies need to be profitable and there for the price of any drug will stabilize around some point due to market forces and the cost of manufacture and distribution.  Right now the generic versions of Gilead’s Truveda, a second-line therapy, costs about $100 per patient per year, according to an article in Forbes, but this price is still too high for MSF to treat all its clinic’s patients (Forbes article).  The article also says that, according to Unitaid, the pool would bring the price down to $86 per year.  So 14% more patients could be treated on the same budget; is that enough?

Third, patent pooling works best when there are many suppliers of similar products who will gain slightly more (or not lose much) market share and still stay in business.  This seems not to be the case with the Unitaid pool since there are only nine suppliers, and fewer if one parses the market by drug type (e.g., first-line vs. second-line).  Certainly, Unitaid had a lot of advice on these issues, but maybe should have listened more carefully to the “several” companies that were consulted (the full plan has not been released with its Appendix 2 list of who was consulted).  Clearly, an analysis of all the issues is beyond the scope of this posting, and, when I have time, I will read Unitaid’s cost/benefit study (Cost Benefit study); an analysis by Van Gelder and Stevens of the International Policy Network, which points out a number of flaws (Empty Patent Pool); and a study of ARV medicines markets (Waning et al. 2010).

Overall, Unitaid is one global health group that is taking a new direction toward achieving effective and sustainable drug access.  They have supported the efforts of the Clinton Health Access Initiative (CHAI; see my posting of June 3, 2010) including:  creating a market through purchaser aggregation, improving demand forecasting, building stockpiles of needed drugs, and conducting business-like negotiations.  And they are applying their approach to drugs for TB and malaria.  Unitaid put $26 million to date into the Global Drug Facility for TB drugs, which ended in 2009, for a drug management system and stockpile (Unitaid TB).  In malaria, they have committed $130 million over next 2 years to the Affordable Medicines Facility- malaria for drug purchases  (Unitaid AMFm; see my posting of June 10, 2010).

Unfortunately, the organization relies on OPM (other people’s money in the form of involuntary donations through a tax levied on airline tickets) and passes through most of its budget to other organizations where it is diluted considerably before having an effect.  I think they need to clarify and stick to their mission and resist the advice of their “expert” advisors from the academic/government/NGO complex to add more projects and associated bureaucracy.  I’m afraid their emphasis on the patent pool, the likely prolonged negotiations (there are many issues to be worked out), likely dissatisfaction of all parties with the final outcome (typically the result of a negotiation), and animosity generated toward the innovator pharma companies will divert their attention from the real needs:  discovery of effective drugs, lowest possible cost possible manufacture, a competitive market, effective treatment protocols, and an effective diagnosis, treatment, and care system.

I hope the knickers get untwisted.

I’d Love to Change the World

This week two sound bites from the 18th (or in superbowlish:  XVIII) International AIDS Conference underway in Vienna (AIDS Conference) caught my ear.  The first was our former president Bill Clinton who was widely quoted in the media:  “In too many countries, too much money goes to pay for too many people to go to too many meetings … every dollar we waste today puts a life at risk.”  And in his address at the same meeting, Bill Gates also mentioned a need to improve efficiency in AIDS aid:  “If we push for a new focus on efficiency in both treatment and prevention and we continue . . . to create new tools, we can drive down the number of infections dramatically and start writing the story of the end of AIDS.”  (e.g., Washington Times article).  Of course, concern about the inefficiency in the world war on HIV/AIDS and in international aid in general is not news (see my spin in postings of January 1 and April 15, 2010), and, of course, their comments will generate much commentary by the academic and professional global health experts, mostly con since they compose the largest segment of  the professional grant-getters and meeting-goers.  Are there more efficient methods?

By chance, the Bills’ quotes coincided with me reading about a relatively new direction in international aid:  giving money directly to people to help them meet their daily expenses, to save up for an income-generating effort, to encourage healthier behavior, or to provide a service more typically given by a charity organization. Drake Bennett in an article in last Sunday’s Boston Globe (“Free Money”, Boston Globe article) provides a survey of the some of the programs that have involved hundreds of millions of recipients and billions of dollars in dozens of nations (e.g., Brazil, Mexico, India, China, South Africa) over the past ten years.  Some of the cash transfer programs are conditional (e.g., recipients or family members must attend regular preventive health checkups or school), others are more like pensions or child-support payments.  According to the proponents and several academic studies he cites, the demonstrated benefits include improving the health and education of poor children, increasing microenterprise, improving crop yields, and expanding consumption and markets.

As an example of the potential efficiency in this type of direct aid, as reported in the New York Times at the end of last year, a program in Malawi that made direct payments to families to care for related and unrelated  orphans was found to be 10-12 times more cost-efficient than orphanages (as measured by the number of children being cared for) (NY Times Dec article).  Another NYT article reported on a cash transfer program the Bills may like given their statements at the AIDS conference; it reduced the prevalence rate of HIV/AIDS from 3 to 1.2 percent in young Malawian women when they and their families received small monthly payments if they stayed in school (NY Times Jul article).   This study, as well as one run in Tanzania in which adults were paid to reduce their unsafe sex (World Bank PR (World Bank press release), were conducted by the Bank’s Development Research Group.  The Group’s main preoccupation is generating reams of macroeconomic statistics for the Bank’s customers and donors, but they also direct a Knowledge for Change Program (World Bank program) which has a mission to support  “data collection, analysis, and research supporting poverty reduction and sustainable development.”  Actionable stuff similar to the work of Abdul Latif Jameel Poverty Action Lab at MIT, “Translating Research Into Action” (Poverty Action Lab).

But I can hear the fingers wagging already:  giving poor people money creates dependency and saps their will to work.  My suggestion to the waggers is first to get a better idea of who are the world’s poor and how they make the most of the limited resources they have.  I’m no expert but recommend a recent (but somewhat biased) documentary called “Good Fortune” that was shown on non-commercial television recently (WGBH programs).  Then read about the longest running and largest cash transfer  programs, Programa Bolsa Família (PBF), which covered 11.1 million Brazilian families (46 million people) living below the poverty line in 2006.   In his June posting from Maceio, Brazil, Seth Kugel gives a detailed description of how several families use the minimal subsidies of the PBF (Global Post story).  A study he cites and is worth skimming is by the International Policy Center for Inclusive Growth that concluded that the PBF has a “nil average effect on probability of working and a marginal reduction in the supply of labor hours,” i.e., no moral hazard dependency (IPC report).  The World Bank, one of the BPF’s partners, has also found the PBF to be effective, and efficient, reaching 94% of the country’s poorest citizens (40% of the population) (World Bank PBF).  If one wants an example in North America, there is Oportunidades, a Mexican program started in the 1990s and funded in part by the World Bank (Oportunidades website and Wikipedia article).

Clearly, cash transfer programs do not apply to making the treatment of HIV/AIDS more efficient since there are no treatment options (the struggle is just to get treatment), but they may help in changing behaviors needed for prevention and delivery of the support needed by the afflicted and their families.  International aid is resource transfer from those with more to those with less and it helps both sides for the transfer to be transparent,  efficient, and effective.  Which reminds me of the no-so-PC song “I’d Love to Change the World” by the British group Ten Years After:

Tax the rich, feed the poor

Till there are no rich no more

I’d love to change the world

But I don’t know what to do

So I’ll leave it up to you