Clinton Foundation Strikes Deal for Lower-Cost Generic AIDS Drugs in Developing World

The William J. Clinton Foundation announced this week that it has reached a deal with two pharmaceutical manufacturers that will significantly reduce the cost of certain generic AIDS drugs in the developing world. The deal applies to 16 formulations of second-line anti-retroviral drugs (ARVs), along with one new once-a-day pill that is considered the “gold standard” of first-line treatment. The drugs will be available in 66 countries throughout Africa, Asia, Latin America, and the Caribbean.

President Clinton also expressed support for the recent decisions by the Brazilian and Thai governments to break patents on certain AIDS drugs held by major U.S. drug companies. Both Brazil and Thailand have issued “compulsory licenses” to allow generic versions of the patented drugs in the interest of public health. In an appearance with Thailand’s Minister of Health, Clinton said, “No company will live or die because of high price premiums for AIDS drugs in middle-income countries, but patients may.”

The two India-based companies involved in the new agreement are Cipla and Matrix. “Seven million people in the developing world are in need of treatment for HIV/AIDS,” said President Clinton. “We are trying to meet that need with the best medicine available today, and at prices that low- and middle-income countries can afford. I applaud Cipla and Matrix for their commitment to lower the cost of new drugs at the forefront of the fight against AIDS, and I thank UNITAID for the funds that have enabled us to make these drugs widely available.”

The newly negotiated prices for second-line drugs are expected to generate an average savings of 25 percent in low-income countries and 50 percent in middle-income countries. (Second-line treatment becomes necessary when patients develop resistance to first-line treatment, but second-line therapy can cost as much as 10 times more than first-line defense.)

The new, first-line, once-a-day pill included in the agreement has been considered prohibitively expensive for use in the developing world. According to the Clinton Foundation, this drug, a combination of tenofovir, lamivudine, and efavirenz first launched in July of last year, offers “greater convenience, fewer side effects, and improved treatment outcomes in comparison to the regimen used most commonly in developing countries.” It will now be available to patients in the developing world at rates less than $1 a day, which would represent a 45 percent price reduction in low-income countries, particularly those in sub-Saharan Africa, and a 67 percent reduction in many middle-income countries.

The new announcement is likely to strengthen the bargaining position that developing countries have with the major pharmaceutical companies of the United States. However, it is still unclear how Big Pharma will react to the new Clinton Foundation deal, as well as the recent trend of breaking patents with compulsory licenses. Thailand was recently placed on the U.S. Trade Representative’s Priority Watch List. To many observers, this move was intensely pushed for by the pharmaceutical lobby as a way to retaliate against the Thai government for its decision to allow patent-busting generic drugs.

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