ellen ‘t hoen, msf oslo 8-11april who-wto workshop differential pricing 1 differential pricing:...
TRANSCRIPT
Oslo 8-11April WHO-WTO Workshop Differential Pricing
1Ellen ‘t Hoen, MSF
Differential Pricing: Concepts and Issues
----Affordable Medicines for
Developing Countries
Ellen ‘t Hoen
Médecins sans Frontières
Access to Essential Medicines Campaign
www.accessmed-msf.org
Oslo 8-11April WHO-WTO Workshop Differential Pricing
2Ellen ‘t Hoen, MSF
Factors Affecting Access to Essential Medicines
R&D
Production
Approval
Quality
Distribution
Drug information, rationale use
Diagnosis/prescription/monitoring
Price
Compliance
Pharmacovigilance
Oslo 8-11April WHO-WTO Workshop Differential Pricing
3Ellen ‘t Hoen, MSF
Global Pharmaceutical Market 2002 $406 billion
Source www.ims-global.com/insight/report/global/report.htm
1.3%
5%
Market projected to
grow 7.8% annually
Oslo 8-11April WHO-WTO Workshop Differential Pricing
4Ellen ‘t Hoen, MSF
Strategies for Lowering Drug Prices
• Differential/tiered pricing (market segmentation) by big pharma
• Local production under voluntary licensing agreements
• Global procurement and distribution system
• Increased competitiveness in the pharmaceutical market
Oslo 8-11April WHO-WTO Workshop Differential Pricing
5Ellen ‘t Hoen, MSF
Differential/tiered Pricing • Relies on spontaneous and voluntary lowering of
prices
• Drug firms prefer low volume –high price strategy
• Requires separation of markets
• Comes with strings attached or hidden agendas
• Does not encourage sustainability or self reliance
• Might hamper other, more sustainable approaches
Oslo 8-11April WHO-WTO Workshop Differential Pricing
6Ellen ‘t Hoen, MSF
Local Production Under Voluntary Licensing
• Based on voluntary agreements (will??)
• Requires manufacturing capacity agreements should allow for export
• Encourages technology transfer and pharmaceutical industrial development in the South
• Companies: TT requires strong IP protection
• Practice: Voluntary licenses more likely when strong CL system exists
Oslo 8-11April WHO-WTO Workshop Differential Pricing
7Ellen ‘t Hoen, MSF
Global Procurement and Distribution System
• Experience and expertise with vaccine procurement exists (UNICEF)
• Might work for specific diseases/ products
• Requires a long term commitment
• Does not solve structural problems
• Might negatively affect local manufacturing capacity
• Regulatory barriers (pre-qualification) and patent barriers in certain countries (exceptions)
Oslo 8-11April WHO-WTO Workshop Differential Pricing
8Ellen ‘t Hoen, MSF
Increased competitiveness
• Proven effective
• Encourages sustainable solutions and industrial development
• Requires flexibility in implementation and a pro public health interpretation of the TRIPS Agreement
• Does TRIPS offer enough flexibility?
Oslo 8-11April WHO-WTO Workshop Differential Pricing
9Ellen ‘t Hoen, MSF
Cost per capsule or tablet (US $)
2.00
1.31
2.90
1.551.851.72
1.04 0.830.28 0.08
0.51
0
1
2
3
4
5
Indinavir400 mg
Saquinavir200 mg
Lamivudine150 mg
Stavudine40 mg
Zalcitabine0.75 mg
Didanosine100 mg
1996 1997 1998 1999 2000
Competition Is Highly Effective in Reducing Prices
Source = UNAIDS, B. Samb, 2000, quoted in WHO-Health Technology and Pharmaceuticals, Revised Drug Strategy, April 2000
Competition (2 to 6 producers per product)No competition
Oslo 8-11April WHO-WTO Workshop Differential Pricing
10Ellen ‘t Hoen, MSF
Generic CompetitionSample AIDS triple-combination: lowest world prices
(stavudine (d4T) + lamivudine (3TC) + nevirapine)
0
2000
4000
6000
8000
10000
12000
Brand
Generic
Oslo 8-11April WHO-WTO Workshop Differential Pricing
11Ellen ‘t Hoen, MSF
0
500
1000
1500
2000
2500
3000
July2000
Aug Sept Oct Nov Dec Jan Feb Mar abr-01
US
$ Brand
Generic
Brazil: $2767
Cipla: $800Cipla: $350
Hetero: $347
Brand: $10439
Brand: $931
Brand: $712
…?
…?
Oslo 8-11April WHO-WTO Workshop Differential Pricing
12Ellen ‘t Hoen, MSF
Price Development of Hepatitis B VaccineChange in Prices Over Time of Hepatitis B Vaccine (Plasma-Derived and
Recombinant DNA) offered to Developing Countries (lowest prices obtained) from Denise DeRoeck)
0
5
10
15
20
25
30
35
40
1981 1983 1985 1987 1989 1991 1993 1995 1997 1998 1999
US
$ (
FO
B)
plasma-derived rDNA
Merck, then Pasteur sole producers
Indonesia int'l tender & bid ($.95/dose)
Philippines tender (plasma): $.65
Current plasma price (.45-.57/dose)
Merck sole producer of rDNA
Korean firms (Chiel, KGCC) acquire tech. And enter market
Biogen DNA patent expires in most of world
Asian & other producers enter rDNA market; price drops to close to $0.54-0.69/dose
Int'l Hepatitis B Task Force formed (1986)
PAHO's first HBV contract (for rDNA at $0.82/dose)
Oslo 8-11April WHO-WTO Workshop Differential Pricing
13Ellen ‘t Hoen, MSF
Recommendations 1/3
• Not one single solution – mix of strategies that are mutually supportive
• Enforceable regulation to encourage equity pricing and prevent parallel re-importation in the EU, north America and Japan
– Example: EU directive on equity pricing that ensures that equitable priced drugs cannot be put on the EU market
Oslo 8-11April WHO-WTO Workshop Differential Pricing
14Ellen ‘t Hoen, MSF
Recommendations 2/3
• Global procurement strategies for selected drugs
– Designed to encourage and improve generic production
– Overcome regulatory barriers: need for international pre-qualification activities
– Overcome IP barriers: exceptions for globally procured goods
Oslo 8-11April WHO-WTO Workshop Differential Pricing
15Ellen ‘t Hoen, MSF
Recommendations 3/3• Actively encourage competition
– Recognise the role of generic manufacturing
– Support to expand and upgrade generic production in developing countries
– Take away barriers in the regulatory systems
– Encourage technology transfer – targeted at countries that have production capacity
– Encourage voluntary licensing agreements
– Fast track compulsory licensing
• Launch debate on how to reconcile TRIPS requirements with health needs
Ellen ‘t Hoen, MSF
Médecins sans Frontières Access to Essential Medicines Campaign
WWW.ACCESSMED-MSF.ORG
Visit Our Web- Site for additional information
(and to sign the
“DROP THE CASE” petition)
Oslo 8-11April WHO-WTO Workshop Differential Pricing
17Ellen ‘t Hoen, MSF