Despite the progress, the overall picture of HIV treatment in the developing world is spotty, with only about 12 percent of those who need ART receiving by at the end of 2004. The World Health Organization's (WHO) ambitious "3 by 5 Plan" to treat three million people by the end of 2005 is likely to wind up treating about 1.2 million. Disbursements from the GFATM are lagging. One bright spot is the fast-growing PEPFAR program, which is ahead of schedule in bringing 470,000 people under care by June of 2006.
Although low cost generic drugs made these gains possible, it is becoming increasingly clear that the infrastructure -- the facilities, staff, equipment and supplies -- needed to assure the quality and sustainability of these fledgling treatment efforts is not available at a similar discount -- where it is available at all. And, even as these programs struggle to their feet, economic developments and legal changes in the Indian patent laws that made generic drugs possible, threaten to knock them back down. The continued expansion of ARV therapy in Africa and elsewhere is at risk of collapse unless problems with funding, staffing, administration and drug supply are addressed. Despite the good start, the lives of millions of people with HIV remain at risk unless sustainable solutions to these problems are found.
As the propaganda war slipped away from them, the pharmaceutical companies turned to lawsuits before finally capitulating and grudgingly offering their branded drugs at no-profit prices or through charity programs. It may be that they ceded ground because they realized that the only battlefield that mattered was in the domain of international trade law, where they enjoyed overwhelming superiority.
The big drug companies obstructed affordable generic medicines not because they feared the loss of markets -- there was essentially no market in Africa -- but because they feared losing control of their patent monopolies: their intellectual property. And it was not even intellectual property in Africa that was the great concern, since few companies had bothered to patent their drugs there. More likely they were terrified of seeing the example spread elsewhere. Compulsory licensing in Brazil; generic production in India; the threat of re-importation of low cost or charity drugs from Africa to the European markets were portents of doom. What if consumers in the United States began demanding affordable medicines? It is the principle of ownership, everywhere, with no limits on monopoly control that has been the real battle prize.
In 2004, a number of drugs that were certified by the WHO under its prequalification program were removed from the list, which caused ripples of uncertainty in the patient community and titters of glee from the pharma lobby. Some of the drugs were de-listed voluntarily after the WHO uncovered discrepancies in the reports of bioequivalence testing, clinical studies designed to prove that the generic version of a drug delivers the same amount of medicine to the blood that the brand name does. The story goes that one of the Indian research organizations contracted to perform these studies simply evaluated a single patient then essentially photocopied the result to make up the 15 or so tests the study required. Whether the drug company was neglectful or complicit in this fraud is unclear. Nevertheless, the bioequivalence data on all drugs performed by this research company fell under suspicion and several Indian drug makers withdrew their products from the WHO prequalification list until the studies could be repeated and verified.
Prequalification is a valuable status to have. Many government programs are unable to evaluate the quality of drugs and rely on the WHO to identify reliable sources. But the WHO program has its limits. Currently, it only inspects the production of the finished form of generic ARVs but not the factories that produce the bulk drug product, called the active pharmaceutical ingredients (API).
The U.S. PEPFAR program has set even higher standards for the drugs it will spend taxpayer dollars on. PEPFAR says it will only pay for drugs that are good enough for Americans; those that have been approved by the FDA. Generally, the Indian companies don't object to this, seeing FDA approval as the ticket to greater market acceptance. Many critics, however, saw FDA involvement as a redundant barrier erected to protect the U.S. pharmaceutical industry -- after all, the head of its international AIDS effort is the former chief of the Eli Lilly pharmaceutical company. Still, the U.S. government has said that generic drugs will be acceptable to PEPFAR as long as they have been okayed by the FDA. The first of the Indian generic drugs will soon have cleared this hurdle and critics will be watching to see if they will join the brand name drugs dispensed by PEPFAR doctors in Africa and elsewhere.
The manufacture of bulk drug APIs is measured in tons. For example, a ton of lamivudine will treat about 8,000 persons for one year. If all eight million people who need treatment were to take lamivudine, they would consume nearly 1,000 tons per year. The world's current capacity for the production of bulk lamivudine is about a third of that. Drugs with high daily doses require much more physical product than drugs with lower doses. For example, an individual taking nelfinavir consumes about two pounds per year whereas the yearly dose of stavudine is only about three-quarters of an ounce.
Increasing and sustaining the industrial capacity to produce sufficient quantities of APIs at competitive prices has yet to be addressed. While there is currently sufficient capacity to supply APIs for the drugs most often used in the developing world, that capacity is lagging for badly needed second-line drugs such as efavirenz and tenofovir.
Tenofovir is an attractive replacement for stavudine or AZT because of its potency and minimal side effects profile. But tenofovir is not yet available from the Indian generic makers and it is questionable if it will be if it turns out to be protected under the new Indian patent regime. Tenofovir is available as second-line therapy in some PEPFAR and other programs, supplied under Gilead's no-profit program for countries that can't afford it otherwise. Gilead has taken steps to increase its capacity to provide the developing world with tenofovir and its fixed-dose combination of tenofovir and FTC. They have recently licensed a South African generic maker to supply the 95 countries in its no-profit access program. As one of the fastest growing ARV makers over the past few years, Gilead can afford to be generous, but one wonders about the sustainability of no-profit pricing in the long run. Voluntary licenses with modest royalty payments to the patent holder would be a better approach, some think. Multiple manufacturers might create more competition and drive prices down by stimulating greater demand for the raw materials. Yet some fear that competition would also increase the incentive to cut corners on quality.
Currently, the no-profit price of Gilead's tenofovir is about $25 a month, which compares to a price of about $3.30 for generic d4T from India. But with reports starting to stream in about d4T-associated facial wasting in Thailand and peripheral neuropathy in Kenya, when does the cost of the cheapest drugs become too great?
We may be seeing the emergence of two tiers of treatment in Africa: PEPFAR, with its newer, less toxic drugs and full service monitoring, and the generic-based programs that use less monitoring and older, cheaper drugs with more side effects. Both are keeping people alive, but one is a rich program and the other is struggling with limited means. If PEPFAR leaps ahead as the largest treatment provider in Africa, the trickle-down benefits may eventually appear in the other efforts as staff is trained and knowledge transferred to more people. But critics charge that PEPFAR is already sucking the life out of some government programs by luring trained staff away with higher pay. Nevertheless, retaining staff is a huge structural problem that is not easily solved. A recent news report claimed that 1,000 nurses leave Kenya each year for jobs in Europe. It could be that a well-to-do program like PEPFAR that pays superior wages may ultimately help keep talent in the country.
Economies of scale may bring the price of generic drugs down to Clinton levels, even without the conditions of sale required under its cash-on-the-barrelhead terms. But if companies do not receive payment, then they will have little incentive to continue offering their products. Several Indian generic companies have complained that certain African governments are slow to pay and that the cost of bearing this risk must be passed along to their other customers. Also, corruption persists as a problem in Africa. Some countries require a local agent to purchase and receive the drugs for resale to the government. This is an opportunity for big markups and kickbacks to government officials with little transparency of the final price paid for the drugs.
There are still some barriers to reaching the lowest possible price for ARVs -- import duties, taxes, local distributor markups -- but it's not clear that even halving the cost of drugs will increase the numbers treated at this point. Low cost generics primed the pump and made AIDS treatment in Africa conceivable, but even free drugs won't make it into bodies without the supporting infrastructure. In mother-to-child transmission programs, it appears that the cost of providing single-dose nevirapine, a simple protocol now recognized to be fraught with problems, is not much less than sustaining a program to provide more complex protocols, or even continuous treatment. Yet it was the single-dose plan that allowed the bureaucrats and investors to consider treatment in these difficult settings possible at all.