It’s not very often that we hear of a new medicine that actually cures a serious disease. This year, World Hepatitis Day comes with the exciting news of sofosbuvir; the new hepatitis C medicine with a cure rate of over 90%. Sofosbuvir can be used on its own in the form of one pill per day for 12 weeks. Existing treatments rely on a combination of daily oral ribavirin and weekly Interferon injections for around 48 weeks. The effectiveness of these old medicines is far below 90%, and they also carry painful side-effects in addition to the hassle associated with weekly injections.
So a new cure is good news? Unfortunately there is a big catch. The medicine is not affordable, even in high income countries. At the current price US $1000 per pill, the US public purse may have to pay over US $300 billion if the 3 million infected people are to be treated. For example, it would cost the state of Oregon $360 million to treat its infected population. This would deplete the $377 million that the Oregon Medicaid program spent on all prescription drugs for its 600,000 members in 2013. US insurance companies are rationing treatment and are telling doctors not to offer the medicine for all the patients that need it – keeping it only for very specific cases.
The situation in Europe is not much better. The cost of a 12-week treatment is €50,000 (US$68,000). The French health minister warned that such a high cost would have a negative impact on the French social security system, and called on the EU to collectively negotiate a lower price for sofosbuvir.
If cost is a major problem in the wealthier countries, then the impact of treatment price in middle-income and low-income countries will be even more dire. The majority of hepatitis C infected people – 80% – live in these countries. Countries with an infection prevalence rate higher than 10% are: Egypt at 14%, Cameroon 13.8%, Burundi 11.3%, and Mongolia 10.7%.
Clearly, none of these countries can afford the current high price. Gilead has entered into a deal with the Egyptian government to provide a 12-week course of treatment at US $900 per patient for the public sector. At 14% prevalence in a population of over 82 million people, the potential number of people living with hepatitis C in Egypt is around 11.5 million. To treat even just 5 million patients would cost Egypt the equivalent of nearly two-thirds of its total health budget (US $4.5 billion out of the current total health budget of US$ 7.22 billion for 2014/15). This cost is in addition to other drugs – pegylated interferon and ribavirin – which are needed in combination with sofosbuvir to reach the 90% cure rate for genotype 4, which is the strain of hepatitis C prevalent in Egypt.
Yet the price does not have to be this high, as illustrated in two ways. Firstly, a study by researchers at Liverpool University looked at the total real cost of the active pharmaceutical ingredients and the cost of manufacturing of the new direct anti-viral medicines class, of which sofosbuvir is one. They estimated the cost of a 12-week course of treatment with the combination of sofosbuvir and daclatasvir as US $78 per person.
Secondly, evidence shows that the price of medicines is slashed by generic competition. HIV treatment is a case in point: in 2000, at the height of the public outcry campaign against high medicine prices, it was very difficult to persuade any government or donors to pay for treatment, and millions of people in poor countries were left to die. The price of triple therapy for HIV was US $10,000 per patient per year. That was clearly unaffordable to patients, governments, and donors at the time. Thanks to generic competition from Indian companies, the price dropped almost overnight to US $360 per patient per year or US $1 day. Continuation of competition has resulted in the current price of triple therapy for HIV of approximately US $100 per patient per year.
Now that Trade Related Aspects of Intellectual Property Rights (TRIPS) is implemented in almost all countries, including those with manufacturing capacity such as India, it is much harder to scale up generic competition. However, TRIPS includes some flexibilities, which countries can use to help lower prices. For example, India’s patent law has a clause on “pre-grant opposition”, which allows any interested groups to challenge a patent application before the patent is granted. Civil society organisations have used this clause for sofosbuvir and therefore currently, it does not have a patent in India (although the final decision is awaiting a court ruling).
Compulsory licensing is an important legal TRIPS tool for governments to ensure affordable prices of new medicines. Use of this tool in India decreased the price of sorafenib (Nexavar) for the treatment of liver and kidney cancer from over US $5,500 per month to US $175. In 2008, Thailand issued compulsory licenses for 3 cancer medicines, leading to a big drop in prices. For example, the price of one tablet of 2.5 mg of letrozole was slashed from the original Novartis price of US $£7.35 to the generic price of US $0.19-0.22 – a price differential of 30 times.
Obviously pharmaceutical companies and rich countries who support them do not like any government using this legal TRIPS tool. When Thailand issued compulsory licenses for medicines to treat HIV, cardiovascular disease, and cancer, it came under tremendous pressure from the US and the EU to stop. Last year there was pressure by US businesses and Congress for the US government to take actions against India over its intellectual property regime.
The fundamental problem is the system of intellectual property rules which allows big companies to hold a monopoly on the price of medicines, thus giving them the power to set high prices. Moreover, financing for research and development (R&D) is still dictated by commercial interests rather than public health needs all over the world. Pharmaceutical companies are ferociously lobbying for stricter and stricter intellectual property protections as the only way to stimulate R&D and to ensure they can maintain their monopoly to set prices.
The price of the new hepatitis C medicine has given more momentum to the rising global movement that is challenging the high prices of new effective medicines for diseases ranging from cancer to cystic fibrosis. As long as the cost of R&D is linked to drug pricing, pharmaceutical companies will continue to price medicines to ensure maximum profit, even if it means decreased access for people who need it. This is a public health travesty. .
The un-affordability of the most effective medicine that can cure hepatitis C today highlights the critical need to de-link financing for R&D from the price of medicines, and for finding new ways to finance R&D so that effective medicines are available at an affordable price to all who need them.
 Forthcoming: New effective hepatitis C medicines must reach all patients. PLOS
World Hepatitis Day: Celebration of a new cure or commiseration for those who can’t afford it?
مهجة كمال ي
Translated into Arabic by Nagy Kamal Yanni
قليلاً ما نسمع عن دواء جديد يشفي فعلا ًمن مرض خطير. لكن في هذا العام يأتي اليوم العالمي للالتهاب الكبدي مع الأخبار المثيرة عن دواء سوفوسبوفير الجديد لعلاج التهاب الكبد سي. ويحقق الدواء نسبةشفاء عالية-أكثر من 90٪ ويستخدم في شكل حبة واحدة يوميا لمدة 12 أسبوعا بدون حقن. متفوقاً عن العلاجات الحالية التي تعتمد على مزيج من ريبافيرين عن طريق الفم يوميا مع حقن الإنترفيرون أسبوعيا لنحو 48 أسبوعا. وفعالية هذه الأدوية القديمة أقل بكثير من 90٪، كما ان لها آثارا جانبية مؤلمة بالإضافة للمتاعب المرتبطة بالحقن أسبوعيا.
فهل يمثل هذا العلاج الجديد أخباراً سارة؟ للأسف هناك مشكلة كبيرة- فالدواء ليس في متناول الجميع، حتى في البلدان ذات الدخل المرتفع . فطبقاً للسعر الحالي -1000 دولار أمريكي للحبة الواحدة- قد تضطر الميزانية الأمريكية لدفع أكثر من 300 مليار دولار لعلاج كل المصابين والذي يقدر عددهم ب 3 ملايين شخص
. فعلى سبيل المثال، فإن ولاية اوريجون ستتكلف 360 مليون دولار لعلاج سكان الولاية المصابين بالمرض مما يستنزف برنامج الولاية الطبي (377 مليون دولار) والمخصص للصرف علي جميع الأدوية لحوالي 600 ألف مواطن أعضاء في برنامج الولاية لعام 2013 . ونظرا لغلو سعر سوفوسبوفير، فقد قررت بعض شركات التأمين الامريكية تقنين العلاج وأعطوا تعليمات لأطبائهم بألا يقدموا الدواء لجميع المرضى الذين في حاجة إليه – وأن يصفوا الدواء فقط لحالات محددة جدا.
أما الوضع في أوروبا فهو ليس أفضل منه في أمريكا، فتكلفة العلاج لمدة 12 أسبوعا هي 50 ألف يورو (حوالي 68 ألف دولار). حتي أن وزيرة الصحة الفرنسية حذرت من أن مثل هذه التكلفة العالية سيكون لها تأثيراً سلبياً على نظام الضمان الاجتماعي الفرنسي، ودعت الاتحاد الأوروبي للتفاوض بشكل جماعي للوصول لأقل الأسعار
وإذا كانت التكلفة هي مشكلة رئيسية في البلدان الأكثر ثراء، فإن تأثير ارتفاع سعر العلاج في البلدان المتوسطة الدخل والمنخفضة الدخل ستكون له عواقب وخيمه. حيث يعيش فيها غالبية المصابين بالتهاب الكبد سي – 80٪ من المصابين. والبلاد التي لديها معدل انتشار العدوى أعلى من 10٪ هي: مصر في 14٪، الكاميرون 13.8٪ ، بوروندي 11.3٪، ومنغوليا 10.7٪ .
وغني عن الذكر أن هذه الدول لا تستطيع تحمل الأسعار الحالية المغالي فيها. وقد دخلت شركة جلياد في مفاوضات مع الحكومة المصرية لتقديم كورس للعلاج مدته 12 أسبوعا بسعر900 دولار لكل مريض يتم علاجه في المستشفيات الحكومية . وإذا كانت نسبة الإصابة في مصر هي 14٪ من السكان البالغ عددهم أكثر من 82 مليون شخص، فإن العدد المحتمل للمصابين بالتهاب الكبد C في مصر قد يصل إلي 11.5 مليون شخص . وبهذا فإن علاج حتى 5 ملايين مريض فقط قد يكلف مصر ما يعادل تقريبا ثلثي ميزانية الصحة الإجمالية (4.5 مليار دولار أمريكي من إجمالي 7.22 مليار دولار أمريكي لعام 2014/2015) . وهذه التكلفة بالإضافة إلى نفقات الأدوية الأخرى (ريبافيرين وبجيلاتد انترفيرون) وهي التي يجب استخدامها مع السوفوسبوفير للوصول إلى نسبة شفاء 90٪ للنمط الجيني رقم 4، وهو نمط التهاب الكبد C المنتشر في مصر.
ومع ذلك فإنه ليس من المحتم أن يكون سعر الدواء بهذا الغلو وذلك لسببين. السبب الأول هو أن باحثون في جامعة ليفربول أجروا دراسة عن التكلفة الحقيقية لعدد من الأدوية الجديدة المضادة للفيروسات والتي تشمل سوفوسبوفير وقد تضمنت الدراسة بحث تكاليف المكونات الصيدلانية الفعالة للدواء وتكلفة تصنيع الأدوية. وقدرت الدراسة أن تكلفة دورة علاج مدتها 12 أسبوعا مع مزيج من السوفوسبوفير والدكلاتاسفير sofosbuvir وdaclatasvir هو 78 دولار أمريكي للشخص الواحد .
والسبب الثاني هو أن الأدلة تشير إلى أن أسعار الأدوية تنخفض بواسطة منافسة الأدوية الجنيسة . فقد كان ثمن علاج فيروس نقص المناعة البشرية في عام 2000 مرتفعاً جداً وذلك في ذروة حملة احتجاج شعبي ضد ارتفاع أسعار الدواء، وكان من الصعوبة بمكان إقناع أي حكومة أو جهة مانحة بدفع تكاليف العلاج، وبذلك تُرِك الملايين من الناس في البلدان الفقيرة للموت .فقد كان سعر العلاج الثلاثي لفيروس نقص المناعة البشرية حوالي 10 ألاف دولار أمريكي لكل مريض سنوياً. ومن الواضح أنه لا يمكن أن يتحمل المرضي ولا الحكومات، ولا الجهات المانحة في ذلك الوقت مثل هذه النفقات. ولكن بفضل منافسة الشركات الهندية بالأدوية الجنيسة، فقد انخفض سعر العلاج الثلاثي بين ليلة وضحاها إلى 360 دولار لكل مريض في السنة أي بمعدل دولار أمريكي يوميا. وقد أدى استمرار المنافسة إلي السعر الحالي للعلاج الثلاثي وهو حوالي 100 دولار لكل مريض سنويا.
وبعد تطبيق اتفاقية “الجوانب المتصلة بالتجارة من حقوق الملكية الفكرية (تربس)” في جميع البلدان تقريبا، بما في ذلك تلك التي لديها القدرة التصنيعية مثل الهند، فقد أصبحت منافسة الأدوية الجنيسة أكثر صعوبة. ومع ذلك، فإن اتفاقية التربس تتضمن بعض المرونة، والتي يمكن أن تستخدمها البلدان للمساعدة في خفض الأسعار. فعلى سبيل المثال، يحتوي قانون براءات الاختراع في الهند علي بند بشأن “المعارضة قبل منح براءة الاختراع”، والذي يسمح لأي مجموعة مهتمة بالطعن في طلب البراءة قبل منحها. وقد استخدمت منظمات المجتمع المدني هذا البند للطعن علي طلب براءة الاختراع لدواء سوبوسبوفير. وبالتالي فإنه حتي الآن لم تمنح الهند براءة الاختراع للدواء (وينتظر القرار النهائي حكم المحكمة).
ويمكن للحكومات استخدام مرونة الترخيص الإجباري -وهي أداة قانونية هامة في اتفاقية النتربس-وذلك لضمان أسعار معقولة من الأدوية الجديدة. وقد استخدمت الهند الترخيص الاجباري لدواء سورافينيب (نيكسافار) sorafenib (Nexavar) لعلاج سرطان الكبد والكلى فانخفض سعره من حوالي 5500 دولار أمريكي في الشهر إلى 175 $ في الشهر . وفي عام 2008، أصدرت تايلاند تراخيص إجبارية لثلاثة أدوية لعلاج السرطان، مما أدى إلى انخفاض كبير في الأسعار. فعلى سبيل المثال، تم تخفيض سعر القرص الواحد من عقارلتروزول letrozole 2.5 ملج من السعر الأصلي لشركة نوفارتيس وهو 7،35 دولار إلي من 0،19 الي 0،22 دولار- أي أقل 30 مرة من السعر الأصلي .
ومن الواضح أن شركات الأدوية والبلدان الغنية التي تدعمهم لا تفضل استخدام الحكومات لمثل هذه الأدوات القانونية الموجودة في اتفاقية التربس. فعندما أصدرت تايلاند التراخيص الإجبارية لأدوية علاج فيروس نقص المناعة البشرية وأمراض القلب والأوعية الدموية، والسرطان، فإنها وقعت تحت ضغط هائل من كلا من الولايات المتحدة والاتحاد الأوروبي حتي تتوقف عن استخدام الترخيص الإجباري . وفي العام الماضي كانت هناك ضغوط كبيرة من قبل الشركات الأميركية والكونجرس علي حكومة الولايات المتحدة لكي تتخذ إجراءات صارمة ضد الهند بسبب نظام الملكية الفكرية الهندي .
وتقع المشكلة الأساسية المؤدية لارتفاع أسعار الأدوية الجديدة في نظام قواعد الملكية الفكرية التي تتيح للشركات الكبيرة احتكار أسعار الأدوية، وبالتالي تمنحهم القدرة على التحكم فيها. وعلاوة على ذلك، فإن تمويل البحث والتطويرR&D) ) للأدوية لا تزال تمليها المصالح التجارية بدلا من الاحتياجات الصحية العامة في جميع أنحاء العالم. وتضغط شركات الأدوية بشراسة لحماية الملكية الفكرية ولجعلها أكثر صرامة باعتبارها السبيل الوحيد لتحفيز البحث والتطوير وللتأكد من أن هذه الشركات قادرة على المحافظة على احتكارها للتحكم في الأسعار.
وقد أعطى سعر الدواء الجديد التهاب الكبد سي المزيد من الزخم إلى الحركة العالمية المتصاعدة ضد ارتفاع أسعار الأدوية الجديدة الفعالة في مكافحة الأمراض ابتداء من السرطان إلى التليف الكيسي cystic fibrosis وطالما استمر ربط تكلفة البحث والتطوير بتسعير الأدوية، فسوف تستمر شركات الأدوية في تسعير الأدوية بما يحقق لها أقصى قدر من الأرباح، حتى لو كان ذلك يعني انخفاض إتاحة الأدوية للأشخاص الذين هم في حاجة إليها.
وتلك هي مهزلة الصحة العامة.
إن سعر الأدوية الأكثر فعالية والتي يمكنها علاج التهاب الكبد سي اليوم، يسلط الضوء على الحاجة الماسة للفصل بين تمويل البحث والتطوير وسياسات التسعير، وإلي الحاجه الماسة لإيجاد سبل جديدة لتمويل البحث والتطوير لإتاحة الأدوية الفعالة بأسعار في متناول جميع المحتاجين إليها.
Forthcoming: New effective hepatitis C medicines must reach all patients. PLOS
Civil society groups at the recent World Health Assembly criticized the continued focus on insurance schemes in the push for Universal Health Coverage (UHC), which all too often includes significant private sector participation. Evidence to support the claim for private sector involvement of this kind remains extremely thin and a new study by the Municipal Services Project shows it could jeopardize public health in the South.
The study compares health outcomes in Chile and Costa Rica, two countries that have come to epitomize contrasting approaches to ‘Universal Health Coverage’ in Latin America. Chile’s focus has been on insurance-based UHC while Costa Rica has built a single public health system. The research provides strong evidence to show that there are widespread and consistent advantages to promoting UHC through a strong public system that funds and provides all medical and preventive services to citizens rather than through a fragmented public-private mix.
It is important to note that both countries have achieved the lowest infant mortality rates and the highest life expectancies in the region thanks to major advances in primary care. But Chile’s health ‘market’ has led to inefficient use of resources, with higher administrative costs and more irrational medical procedures (e.g. caesareans) resulting from oligopolies and collusion among private providers.
One of the major goals of UHC is financial protection for poor households when they face illness. Yet Chileans systematically need to make higher out-of-pocket payments to get medical care in comparison with Costa Ricans. This situation is produced in part by the fact that Chileans pay for health conditions, services or products that are not covered by their insurance (e.g. prescription drugs).
In contrast, Costa Rica’s public health care system remains relatively affordable and more efficient, with total per capita health expenditure standing at US$811 compared to US$947 in Chile. Importantly, Costa Rica has also consistently prioritized preventive health care. Expenditure on prevention and public health services from 2002-2006 in Costa Rica is more than double that of Chile (6-7% vs 2-3%). This focus on prevention is more cost-effective and can yield greater public health impacts in the long term.
Using comparable data (Latinobarómetro), the Municipal Services Project study shows that twice as many people reported facing access barriers to health care in Chile compared to Costa Rica, citing distance to hospital, time to obtain an appointment, and cost of seeing a doctor as the major reasons. In addition, lack of access to health services as a result of financial barriers in Chile still stands at 4.2% compared to 0.8% in Costa Rica.
Costa Ricans continue to be largely satisfied with the quality of their healthcare services, more so than Chileans. Interestingly, LAPOP 2012 results show that most people in both countries think that government, rather than the private sector, should be responsible for health care (71.1% in Chile and 67.5% in Costa Rica).
According to the notions of “active purchasing” and “managed competition” – frequently used to promote insurance schemes – the existence of different providers competing for resources should have produced higher levels of quality at lower costs in Chile. The evidence presented in this report shows that such assumptions are not always true.
The Chilean health system is an example of how segmentation produced by the coexistence of private and public insurances is detrimental to efficiency and equity. Collusion among private providers and oligopolies are realities that are ignored in the competition argument.
Debates over the best institutional arrangements to organize universal health care are far from over, but this case study demonstrates that insurance schemes as promoted by some proponents of the UHC agenda are neither the only nor the best option.
Luis Ortiz Hernández is Professor in the Health Care Department, Universidad Autónoma Metropolitana Xochimilco, Mexico and visiting professor at Queen’s University, Canada. His most recent publication, “Chile and Costa Rica: Different roads to universal health in Latin America,” is available here.
A growing consensus for Universal Health Coverage (UHC)
The patchy progress towards meeting the health-related MDGs underlines the urgent need for countries to build free, universal health care systems. Cost is a major barrier for people to access healthcare. 150 million people facing catastrophic healthcare costs every year, while 100 million are pushed into poverty because of direct payments.
There is a growing consensus that UHC should be included in the post 2015 framework. During the 67th World Health Assembly in May 2014, UHC was one of the most discussed topics, from side events to technical briefings, including in the official meeting agenda. UN member States adopted a resolution on Health in the post 2015 agenda that states clearly that UHC is one of the core components of the post-MDGs.
But do we agree on the definition of Universal Health Coverage?
During the World Health Assembly, another important thing happened: the World Bank and WHO launched the final version of a monitoring framework for measuring progress towards UHC at country and global levels. The monitoring framework is a technical instrument, aimed at providing tools for countries to monitor their own progress towards UHC. But in the context of the intense initial negotiations on defining the health goal in the post 2015, it gives a clear political indication on what is understood by UHC and how we can measure it. The monitoring framework sets out clear commitments to reduce out-of-pocket payments and improve access to health care for the poor with two new targets:
Having clear targets and deadlines is welcome, so is the fact that the framework recognises the need to disaggregate data by gender, wealth and place of residence. This will make it possible to measure equity although a more comprehensive disaggregated data should also include age.
Abolition of user fees
We welcome that the financial protection indicator is no longer just focusing on preventing people being pushed into poverty, but on protection from out of pocket payments. Indeed, out of pocket payments are not just a problem because they push people into poverty but because they prevent people from accessing services altogether. But reducing direct payments does not automatically make health care affordable – especially if these are replaced with prohibitive health insurance premiums where membership is linked to contributions or if medicine prices remain high.
UHC should be based on the principle of social solidarity in the form of income cross-subsidies – from rich to poor – and risk cross-subsidies – from the healthy to the ill – so that access to services is based on need and not ability to pay. This means that health services must be provided free at the point-of-use. Health user fees are the most inequitable way of paying for health care – they prevent poor people from accessing lifesaving treatment and push millions of them into poverty each year. In the words of Jim Yong Kim, President of the World Bank Group “Even tiny out-of-pocket charges can drastically reduce [poor people’s] use of needed services. This is both unjust and unnecessary”
Universal health coverage must mean health coverage for all
Oxfam cannot possibly support the coverage target proposed by the World Bank and WHO. Let’s take a step back. For Oxfam, UHC is anchored in the right to health and an answer to people’s asks for Health For All. For Oxfam, UHC means Health Coverage For All. Therefore, we need a strong commitment of the international community in the post 2015 agenda on this goal.
By stating the coverage target at 80%, the monitoring framework gives to the international community the signal that UHC cannot, in fact, be universal, because it is unrealistic. We disagree.
UHC means that ALL people are able to access ALL the health services they need, without fear of falling into poverty. It doesn’t mean that all people will use the services, but that people are able to access good quality services when they need them.
Strong public services and public financing
Scaling up health care services to achieve UHC requires a strong public health sector providing the majority of services. Governments should therefore ensure that adequate proportions of national budgets are allocated to health, in line with the 15 per cent target agreed in the Abuja Declaration. It is essential that steps are taken to ensure that domestic tax collection becomes progressive, and robust, and that both individuals and companies pay according to their means. Tackling tax evasion and tax avoidance must also be a crucial priority within the new framework.
A focus on UHC in the framework provides an opportunity to accelerate progress on the health related MDGs, and address the burden of non-communicable diseases. Most critically, it is an opportunity to move towards a more comprehensive approach to deliver on the right to quality, affordable, and equitable health care coverage for all. The new framework must include a standalone goal on achieving Universal Health Coverage for all by 2030.
Charlotte Soulary works for Oxfam International as a Health and Education Policy Adviser
It is 1996 and the scene is starting with the plight of HIV hitting the news. By 2000, it was clear for all to see that the medicines available to treat this deadly disease are in the North while the disease is most prevalent in the poorer countries in the South. It was estimated that one in five South Africans was infected.
Yet 39 multinational pharmaceutical companies decided to take Nelson Mandela’s Government to court over an Intellectual Property Bill that tried to prevent patents from hindering access to medicines. Thanks to a global public campaign and patients’ advocacy, the companies were forced to withdraw their case in 2001.
Talk to “big pharma” and they will tell you that the South Africa court case was a landmark in their history. Some even say that such a thing would not happen again. One cannot help a cynical smile when remembering that in 2006 Novartis took the Indian government to court over the claim that India’s intellectual property law is not TRIPS compliant. Needless to say Novartis lost its case. At least this time other companies watched from a distance without giving public support for Novartis.
TAKE 2: CLACKET SECOND TIME OF THE SAME FILM
It is 2014 and the scene is of a world waking up to the growing plight of non-communicable diseases. The latest WHO report estimates that cancer cases are expected to soar by 70% over the next 20 years . Although the big talk is still about prevention (which of course is critical), very few are talking about treatment. In the current debates on post MDGs cancer is hardly mentioned and in the discussions on Universal Health Coverage one rarely hears about how to make detection and treatment (surgery, radiotherapy and medicines) available and affordable.
Roche markets a drug for cancer (Avastin) which was discovered to also cure a type of blindness affecting older people. So Roche patented another form of the drug (Lucentis) as specific treatment for the eye condition. The catch is that one injection of Avastin costs $50 while a Lucentis injection costs $2,000. Another example that recently hit the headlines is that of a new medicine to treat Hepatitis C (made by Gilead) but alas it costs $1,000 per day.
Needless to say that access to affordable medicines for HIV and other infections remains an “unfinished” agenda – the debate on medicine price is just as important today as it was in late nineties and early 2000s.
And now back to South Africa again. In February this year, a leaked document shows that the Innovative Pharmaceutical Industry Association of South Africa (IPASA) and its sister organisation in the US (PhRMA), hired a PR company to conduct a covert campaign against the South African government. The campaign intended to delay and undermine the Government’s new Intellectual Property Bill which seeks to use internationally agreed legal instruments such as the TRIPS flexibilities included in the Indian law, to enhance access to more affordable generic medicines in South Africa.
But the pharmaceutical industry does not want the South African government to take such actions to protect public health. IPASA made a submission to the DTI on the Draft National Policy on Intellectual Property in support of the current status quo.
The South African Department of Health condemned the recently leaked pharmaceutical industry strategy. The Minister of Health described the proposal as a “genocidal conspiracy of satanic magnitude”, accusing pharmaceutical companies of “conspiring against the state, the people of South Africa and the populations of developing countries” – and of planning what amounts to “mass murder”.
SO HAVE PHARMACEUTICAL COMPANIES CHANGED?
I cannot answer this question any better than the honest statement given by Marijn Dekkers, CEO of Bayer who said in reference to Bayer’s medicine Nexavar for the treatment of liver and kidney cancer:
“ .. we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product.”
These simple words tell us the whole story of multinational pharmaceutical companies’ approach to access to medicines: that they are about maximizing profits and not about contributing to advancing public health. All their talk of “putting patients at the front of our business” is just talk for public consumption to improve their PR image. The business model of multinational pharmaceutical companies – founded on maximizing profit – dictates the Research & Development agenda and the pricing and marketing pathways. Companies still refer to compulsory license, a legal instrument under TRIPS, as “essentially theft.”
We must always remember that it was this industry –chiefly Pfizer- which lobbied and succeeded in designing a global Intellectual Property system (TRIPS) and fought hard against the flexibilities and instrument included there for countries to use to protect their citizens. It is pharma that continues to lobby for stricter Intellectual Property rules in free trade agreements that further tie the hands of governments so that companies’ monopoly is extended.
So what has changed apart from adopting new tactics? Well at least some companies remembered – and perhaps did not want to repeat – the old South Africa saga and started to withdraw from the IPASA campaign plan. The Danish company, Novo Nordisk dissociated itself from IPASA and more recently Roche followed suit.
The big question remains though: when will multinational pharmaceutical companies realise the failure of their Intellectual Property-dependent business model and seek alternatives?
Dr Mohga Kamal-Yanni is a Senior Health Policy Advisor at Oxfam GB
Lesotho has a new hospital – built and operated under the first public-private partnership (PPP) of its kind in any low-income country. The IFC advice and promise was that it would cost the same as the public hospital it replaced. Instead the PPP hospital is costing the government 51% of their total health budget while providing 25% returns to the private partner and a success fee of $723,000 for the IFC.
In a report released today, ‘A Dangerous Diversion’, Oxfam and the Consumer Protection Association (Lesotho) explain how the Lesotho health PPP was developed under the advice of the International Finance Corporation (IFC – the private sector investment arm of the World Bank) and now costs the government $67 million per year, or at least three times the cost of the old public hospital. The hospital is reported by the IFC to be delivering better outcomes in some areas. But the biggest concern is that as costs escalate for the PPP hospital in the capital, fewer and fewer resources will be available to tackle serious and increasing health problems in rural areas where three quarters of the population live.
A consortium called Tsepong Ltd – among whose shareholders are South African healthcare giant Netcare – won an 18-year contract to build and run the new 425-bed hospital. Its return on investment is 25%. The PPP is the first of its kind in a low-income country and more ambitious and complex than the majority of PPPs attempted in high-income contexts. Not only is the private consortium responsible for designing, building, maintaining and partly financing the hospital, it also provides all clinical services for the contract period.
Since well before the PPP contract was even signed (in 2009) the IFC was busy marketing it a major success, proposing it as a model for other countries to replicate. In 2007, Bernard Sheahan, the IFC‘s Director of Advisory Services, said:
‘This project provides a new model for governments and the private sector in providing health services for sub-Saharan Africa and other regions. The PPP structure enables the government to offer high-quality services more efficiently and within budget, while the private sector is presented with a new and robust market opportunity in health services.’
And despite a significant body of evidence highlighting the high risks and costs associated with health PPPs in rich and poor countries alike, similar IFC-supported health PPPs are now well advanced in Nigeria, and in the pipeline in Benin. The IFC’s health PPP advisory facility has financial backing from the governments of the UK, the Netherlands, South Africa and Japan.
So why is the PPP so expensive? There are multiple and wide-ranging reasons outlined in the new report and in a previous blog authored by Dr John Lister on this site. Some of these seem inherent to health PPPs and raise serious questions about why the model was pursued in a low-income, low-capacity context. Other cost increases appear to be a result of bad advice given by the IFC.
It is accepted that borrowing capital via the private sector will always be more expensive than governments borrowing on their own account. The theoretical cost saving and value for money potential of PPP financing and delivery therefore lies in effective risk transfer to the private sector and, in turn, the effective management of that risk by the private sector in the form of improved performance and greater cost efficiency in its operations. In the case of Lesotho, this potential benefit has not been realised, and the costs are already escalating to unsustainable levels. As savings on clinical services have not been delivered, it is even more important to raise serious questions about why cheaper public financing options were not pursued.
The biggest losers of the Lesotho health PPP are the majority of Basotho people who live below the poverty line in poor rural areas, who have little or no access to decent healthcare and where mortality rates are high and rising. Amongst the most severe challenges facing the health system is the shortage of health workers. Yet while the budget line covering the health PPP will see a 116% rise in the next 3 years, the health worker budget will see below inflation annual increases of just 4.7%.
As the country‘s health financing crisis escalates, the option of reintroducing and increasing user fees at primary and secondary level facilities has already been tabled for debate. Such a devastating and retrograde move in Lesotho would further exacerbate inequality and increase rather than reduce access to healthcare for the majority of the population. World Bank President, Jim Yong Kim, recently stated that user fees for healthcare are both unjust and unnecessary. In an interview just last week in the UK’s Guardian newspaper Kim said:
“There’s now just overwhelming evidence that those user fees actually worsened health outcomes. There’s no question about it. So did the bank get it wrong before? Yeah. I think the bank was ideological.”
To ensure ideology rather than evidence is not driving the IFC’s continuing promotion of health PPPs in poor countries, our report calls for a fully independent review using peer reviewed evidence to question the appropriateness, cost-effectiveness and equity impact of this model. Oxfam and the Consumer Protection Association (Lesotho) also say that the IFC’s role in exposing Lesotho to such a high-risk, high-cost long-term contract should be investigated and, until then, the World Bank should stop all IFC advisory work in support of health PPPs.
Anna Marriott is the author of ‘A Dangerous Diversion’ and editor of Global Health Check.