Ten Latin American countries meeting last weekend in Lima, Peru, have signed a letter of intent with a number of pharmaceutical companies which opens the way to lower prices for antiretroviral drugs, HIV diagnostic and monitoring tests. While full details have not yet been released, the effect should be substantial: the cost of first-line triple therapy is reduced by between 30 and 92% from the best prices previously available and second-line treatments are also included. The overall impact could be to allow 150,000 more people with HIV to receive treatment in the region without increasing current levels of spending on ARV drugs, according to REDLA+, the Latin American network for positive people and others close to the negotiations.
The process, chaired by Peru's Health Minister and facilitated by WHO's regional office, the Pan-American Health Organisation, had the goal of securing lower prices for the customers in return for access for the suppliers to a larger and more predictable market. The health ministers heard from individual companies privately on the prices they could offer for particular drugs, and then set a "reference price" as a maximum figure for future purchases of each product. Companies are free to offer lower prices, although there is no expectation that there will be further discounts for bulk orders, etc.
The agreement includes conditions on quality control and bio-equivalence studies for generic companies supplying ARVs in the Latin American market, which implies coordination among drug regulators in the region to simplify their procedures and speed product registration without risking patients’ welfare.
This agreement was jointly negotiated between the governments of Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela and a number of pharmaceutical companies. Of the major international pharmaceutical companies, only Abbott (supplier of diagnostics as well as ARVs) has signed up, alongside the "generic" companies Cipla (India), Combino Pharm (Spain), Filaxis (Argentina), Ranbaxy (India), Refasa (Peru), Richmond (Argentina) and Rontag (Argentina).
Of these companies, four - Abbott, Cipla, Combino Pharm and Ranbaxy - now have ARVs "pre-qualified" for international purchase under the UNAIDS/WHO pilot scheme to assess compliance with good manufacturing practice. Full implementation of this agreement appears to depend on WHO examination of the manufacturing processes and product quality offered by all of the companies involved.
BMS, GSK, Merck and Roche declined to participate in the bidding process as they were unwilling to offer a single regional price. Effectively, the agreement now means they must match the prices of the generic companies where there is direct competition, or their products will not be purchased.
Gilead Sciences (makers of tenofovir) have also signalled their readiness to offer reduced prices in Latin America although no announcement on this has yet been made.
Similar negotiations have recently taken place between groups of pharmaceutical companies and groups of companies in the Caribbean and Central America, but until now the big international pharmaceutical companies have succeeded in excluding generic suppliers from the process.
Brazil famously secured large discounts on ARV prices through actual or threatened generic competition, as well as through bulk purchasing. Clearly, Brazil has now become the model for other states to follow. The key question will now be whether other countries will match Brazil's commitment to providing healthcare and treatment, as well as its readiness to stand up to political pressure from the USA and multinational companies.