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
It is all too technical. It cannot be a media story. It is about acronyms like TRIPS and the negotiation was taking place in an obscure place called the TRIPS council in Geneva. Therefore the injustice practiced by the richest nations against the poorest ones goes unnoticed except by dedicated NGOs who are worried about the poorest people in this world. So what is this story about?
In 1995, the World Trade Organisation (WTO) was created and with it, the Trade Related Aspects on Intellectual Property Rights (TRIPS) which dictated that all WTO members adopt Western-style intellectual property standards irrespective of a country’s status of development or industrial progress. Luckily the TRIPS negotiators realised that the poorest nations – the least Development Countries (LDCs) – do not have the capacity to implement such complicated regimen so they were granted a “waiver” or a transition period until 2006, after which they were to implement the agreement.
Needless to say that by 2006 LDCs did not have the capacity to implement -let alone to benefit from – TRIPS. So the WTO granted them another extension till 2013. This extension will expire by the end of this month. Given that the LDCs still do not have the capacity to implement TRIPS, Haiti, on behalf of the LDCs applied to the TRIPS council for an extension as they are entitled by the agreement itself. Rather than having yet another extension for an arbitrary number of years, the LDCs requested unconditional extension until a country develops enough to cease to be an LDC. The proposal was unequivocally rejected by the richest nations.
During the negotiation of the LDCs’ request, the US and EU took a very tough and inflexible position. Firstly they tried to impose a conditionality that requires LDCs to maintain existing levels of TRIPS compliance, even if these work against their development needs. Such conditionality is not required by the TRIPS agreement itself !
The US and EU also pushed hard for a limited extension of only five to seven and a half years. Such a short extension would not allow LDCs to develop the basic prerequisites (e.g. qualified personnel, a scientific and technological base, a functioning market, and regulatory systems) that would enable them to implement, let alone to benefit, from the TRIPS Agreement.
Citizens of LDCs, most of which are in sub-Saharan Africa, are the most vulnerable people in the world. More than half lives on less than $1.25 per day. The early implementation of TRIPS agreement would have a grave impact on access to medical technologies, educational resources, seeds and climate change adaptation technologies.
I personally think that it is shameful that the US and EU oppose the reasonable request of the LDCs and put undue pressure on them to accept the US/EU conditionalities that work against the interests of ordinary people in countries such as Niger, Somalia, and Malawi.
Mohga Kamal-Yanni is a Senior Health and HIV Policy Adviser at Oxfam GB
Because imitation is the best form of flattery, here’s my version of Duncan Green’s ‘From Poverty to Power’ “links I liked”:
A report on the contribution of the BRICS countries (Brazil, Russia, India, China and South Africa) on global health and development notes their overseas development aid has grown 10 times faster than the traditional G7 donors in the past 5 years. Despite their own domestic development problems, the BRICS are increasingly becoming a significant global force for financing development in poorer countries.
In recognition of the importance of government subsidies for achieving universal coverage, the federal government of Nigeria is to start paying the premium contributions of pregnant women and children under 5 years under the country’s National Health Insurance system.
The India government is rolling out a pilot scheme for a universal health package. The pilot will provide access to free generic drugs in at least one district in every State in the country. This move is expected to provide a huge relief to millions of poor people in India who spend a larger share of their meager income on medicine.
The Kenyan government plans to add outpatient services to the NHIF benefit package. Strangely, this move is aimed at reducing fraud and cost rather than improving access. Questions remain if current capacity of health service can support such expansion, and whether this will make any real improvements in access for the people given its objectives. In a related development, the NHIF has adopted capitation payment system, and has also raised contribution rates (premiums) paid by scheme members.
The Swedish government has appointed an Ambassador (Dr. Anders Nordström) to champion its work on helping poorer countries achieve MDG goals 4, 5 and 6 (child mortality, maternal health, and HIVAIDS and malaria. The appointment is in recognition of the importance global health on Swedish overseas development agenda and the need to strengthen efforts at achieving the health related MDGs as the deadline looms very large.
Meanwhile the Spanish government is to cut about 10% of its budget for health as part of broader measures to reduce the country’s budget deficit.
These are exciting times for health care reform in India. Last year in his Independence Day Address the Prime Minister declared that health would be accorded the highest priority. Going a step further, the government outlined plans to increase public financing of health from 1.2% of India’s GDP to 2.5% and there have been many recent press statements on this. Of course actions will speak louder than words.
In November 2011 the High Level Expert Group submitted its report to the National Planning Commission, describing a vision where every citizen should be entitled to essential healthcare services that will be guaranteed by the Central government. The report shows how it is feasible for India to establish a UHC system within the next ten years. In response the PM has let it be known that he wants the Planning Commission to take steps to help the government offer free universal health care, as proposed by the group. Very welcome plans are already apparently in motion to provide free medicine for all through Public Health Facilities under the National Rural Health Mission.
The Public Health Foundation of India has just launched a dedicated website to drive forward progress on Universal Health Coverage (UHC) in India. The website showcases the recent groundbreaking report of the Planning Commission’s High Level Expert Group on Universal Health Coverage. It features background documents, commentary, and expert interviews and serves as an interactive space for UHC publications as well as national and global events.
The High Level Expert Group report includes the following key recommendations:
The UHC India website could not have been launched at a more appropriate moment. This month the National Advisory Council, led by Sonia Gandhi, will consider the recommendations of the High Level Expert Group, which is indicative of a key milestone in the push for a system where all Indian citizens, regardless of their economic, social or cultural backgrounds will have the right to affordable, accountable and appropriate health services.
For UHC to succeed political and financial commitment will be essential and much hard work is needed. This new website is an excellent resource for anyone committed to making this aspiration a reality.
Jayati Ghosh is Professor of Economics at Jawaharlal Nehru University in New Delhi, India, and delivered the Lancet Lecture 2011 at University College London on the subject of “Economic growth and women’s health outcomes: A deepening divide?” Here Ghosh gives some highlights of her lecture for Global Health Check, with a focus on the deepening divide between economic growth and women’s health in India:
Even though economic growth and human development do not always move together, GDP growth is still expected to be associated with better health conditions, for various reasons. Rising per capita incomes typically involve an improvement in food and nutrition standards among the poor, which is obviously an essential precondition for better health. Deterioration in nutrition due to poor eating habits is more likely to occur after incomes cross a certain level. Increasing national income also puts more absolute resources in the hands of governments to spend on essential public health. Even if the proportion of public health spending to GDP remains unchanged, rising per capita GDP means rising per capita public spending on health. And governments may get greater fiscal space to even increase their health expenditure as a share of GDP. Either way, this can mean greater spread and better quality of basic public health services such as clinics, hospitals, doctors, nurses and subsidised medicines. It can also allow governments to spend on infrastructure that has a direct bearing on health, such as better housing, transport and communications that reach health facilities to poor or remote areas, safe drinking water and sanitation.
So how has recent growth in one of the most dynamic parts of the global economy – India – impacted on health? In particular, how has India fared relative to other countries that are at similar levels of per capita income or are even poorer? Consider India in relation to Sri Lanka, Vietnam and Bangladesh. Of these, Sri Lanka has the highest per capita income (in US $ terms) but India has had the fastest rate of growth in the past two decades.
Despite this, India’s health indicators are either worse than or show slower improvement, than these other countries. It is useful to consider health outcome indicators for women and girls in particular, since these may be taken as the “floor” conditions of health in the society. Since gender discrimination continues to operate to reduce the access of women and girls to health services of various kinds, female health indicators are the most effective way of assessing the general progress of health conditions. Consider two basic indicators: the female infant mortality rate (IMR – number of female deaths below the age of 1 year per thousand live births of females) and the maternal mortality rate (MMR – number of women dying because of childbirth-related complications per 100,000 live births).
The female IMR In India is more than double that in Vietnam, at 51 per thousand, and it declined by only 40 per cent over the two decades – one of the slowest rates of improvement in the region. The MMR at 230 per hundred thousand in 2008 was nearly 5 times that in Vietnam and nearly 6 times that in Sri Lanka. What is even more shocking is the slow improvement – even Bangladesh has outperformed India in terms of decline in IMR, though it is a poorer country with slower GDP growth.
By contrast, Vietnam and Sri Lanka have both achieved indicators that are close to those of developed countries (female IMRs of 11 and 10 respectively in 2009 and MMRs of 39 and 48 in 2008). So obviously it is possible to get better women’s health outcomes even without reaching higher per capita income levels.
What explains the paradox of high growth and relatively poor health outcomes in India in particular? Of course India is also very regionally diverse, with some states like Kerala showing excellent health outcomes for women, similar to those in Vietnam. And three states have also shown much improved health indicators in the past two decades: Tamil Nadu, West Bengal and Maharashtra. But in the bulk of the country, female IMR and MMR are still very high and have declined very slowly.
One important reason for this is under-nutrition, which has actually worsened in recent times according to indicators like calorie consumption. Rising prices of food are making this problem worse as women and girls in poor households take the brunt of food scarcity. The declines in per capita food grain availability in the country as a whole, already show the problem, but they do not reveal the disproportionate impact on poor and more vulnerable groups.
Related to this is the distributional issue: income growth has been concentrated among the top ten per cent of the population, whose health indicators were already more like those in rich countries, and there is little improvement of consumption patterns in the bottom half. Another reason is poor sanitation, reflecting low governmental priority to critical concerns like clean drinking water and toilets. A third cause is lack of good and affordable health services for women especially in the reproductive age group. Nearly three quarters of all health spending is by households out of their own pockets, which contributes to many families falling into indebtedness and poverty.
All of these factors are crucially determined by government policy. Despite much publicly expressed concern on all these issues, the Government of India has simply not put its money where its mouth is. Public spending as a share of GDP has not increased, and per capita spending on some essential activities like immunisation and primary health centres has actually gone down.
Instead, the government has sought to provide essential health services on the cheap, using the underpaid labour of local women working for much less than the minimum wage, and not properly trained regular public employees with adequate facilities.
So the apparently growing divide between economic growth and women’s health outcomes in India is really the result of the wrong orientation of public policy. This is not inevitable: the experience of other Asian countries shows that a more positive synergy can be created. This requires a shift in economic approach, since it can be argued that it is not just that health spending has been neglected by the government. Rather, it is an outcome of an economic strategy based on corporate profitability as the main driver of growth, which in turn is associated with reduced government spending. This is because the focus on incentivising private investment reduces the capacity to tax and therefore spend public revenues, with consequent fiscal constraints; and also because the state then stays away from or even moves out of activities that may generate private profits, including medical services.
The point is that with sufficient political will, this can be changed. Health spending needs to be valued not just for its own sake, but as an essential element in an overall macroeconomic and growth framework oriented to better conditions of human life (rather than just GDP expansion). This would be part of a wage- and employment-led strategy of ecologically sustainable growth, with a focus on improving human development.