'Brazilian model' saves over $1 billion in anti-HIV treatment costs

Domestic production of antiretrovirals and price agreements with pharmaceuticals has saved Brazil an estimated $1 billion in anti-HIV drugs costs, according to a study published in the November 13^th edition of Public Library of Science Medicine.

This is despite the fact that price agreements with pharmaceutical countries mean that Brazil pays significantly more for some antiretroviral drugs than other middle-income countries. The investigators, from Harvard University, found that HIV treatment costs had increased significantly in Brazil in recent years, and they suggest that such increases could “foreshadow future AIDS cost trends in other developing countries”.

The study is available free online, here

Brazil has provided free and universal access to antiretroviral therapy since 1996. Patients who are ill because of HIV or who have a CD4 cell count below 200 cells/mm³ are eligible for free treatment.

It is now estimated that 180,000 of the 600,000 HIV-infected individuals in Brazil are receiving anti-HIV therapy. This level of treatment coverage is producing tangible results, with falls in the rate of mother-to-child transmission, a decline in the amount of illness and death caused by HIV, a reduction in HIV incidence, and a three-fold increase in the prognosis of HIV-positive patients.

Some antiretroviral drugs are produced by Brazil’s well-established generic pharmaceutical industry. But as a member of the World Trade Organization Brazil recognises the patents on eleven of the 18 antiretroviral drugs used in the country are covered by patents. These include newer anti-HIV drugs that are either recommended for first-line anti-HIV therapy, like lopinavir/ritonavir, or drugs that are important as later treatment options, including atazanavir and T-20.

Brazil has threatened to issue compulsory licences for some patented drugs. Although this has prompted trade disputes with the US, drug companies have entered into negotiations about the price of five antiretroviral drugs.

The country’s provision of universal free anti-HIV, local generic production and price-negotiation has been called the ‘Brazilian Model.’ In May 2007, Brazil issued its first compulsory licence, allowing the import of generic efavirenz from a manufacturer other than the drug’s patent holder showing that its approach to treatment provision continues to evolve.

Treatment guidelines in Brazil allow for the use of more antiretroviral drugs than any other middle- or low-income country. This is particularly important as the need for second- or third-line therapies is being recognised in poorer countries.

Sharp increases in HIV treatment costs were observed in Brazil in 2004 and 2005. Investigators wished to determine the clinical factors contributing to these increasing costs and to determine the economic consequences of local generic production and price agreements with drug companies. They also wished to see what the costs of antiretroviral therapy for the country could have been under a number of different scenarios.

Overall, Brazil’s expenditure on antiretrovirals doubled between 2001 and 2005, totaling $414 million in 2005. During this period, the cost of many antiretrovirals were reduced by drug companies, but increasing demand for anti-HIV treatment in Brazil offset any potential savings and actually lead to an increase in total costs. Indeed, the investigators calculated that had demand for anti-HIV drugs remained constant, expenditure would only have increased by $7 million to $211 million. However, had the price of patented drugs not fallen, Brazil’s bill for anti-HIV drugs would have been $1.2 billion more during the study period.

Brazil paid less for the patented anti-HIV drugs lopinavir/ritonavir and efavirenz than other middle-income countries, but paid some $200 per person per year more for tenofovir than similar countries.

Local production of generic versions of antiretrovirals ended up costing the country $110 million more than the use of generics produced elsewhere would have entailed.

The investigators conclude, “Brazil’s price negotiations have been most effective in lowering costs of drugs in which generic competition has emerged…the generalizability of these findings to other countries will depend on the strength of their health systems, treatment guidelines, intellectual property regimens, epidemiological profiles, approaches to scaling up AIDS treatment, differing capacities for local drug production, and on the global drug prices, all of which continue to evolve.”