1000-fold mark-up for drug prices in high-income countries blocks access to HIV, HCV and cancer drugs
29 November 2016. Related: Conference reports, Treatment access, HIV 13 Glasgow 2016.
Simon Collins, HIV i-Base
An opening lecture at the 2016 Glasgow HIV Congress challenged the current model of drug pricing by showing mark-ups that are commonly more than 1000 times higher than production costs and that make many medicines now largely unaffordable in high income countries.
The analysis was presented by Andrew Hill, an independent advisor to international health organisations but who also has worked for many of the largest pharmaceutical companies. 
Three examples of the current urgency for better pricing are PrEP, new drugs for viral hepatitis (both HBV and HCV) and the broad range of chemotherapies for cancer. Even discounting very low access to cancer treatment in low- and middle-income countries (LMIC), globally, more than five million people die annually from preventable infections due to hepatitis B and C, HIV, TB and malaria. 
This analysis, based on the bulk costs of the active pharmaceutical ingredients (per kilogram) and including 10-50% profits after allowing for manufacturing and other production costs, argues for a more affordable model for drug pricing. 
The presentation also showed the disparity of prices charged for the same drugs across similar high-income countries, with the US generally paying highest. For example, a 12-week course of daily sofosbuvir has target production costs of about €55 but currently costs €50,000 in the US and only €3,485 in Australia (based on volume discount to treat hepatitis C in Australia on a population level).
Differences between target costs for a range of HIV, hepatitis and cancer medicines compared to current prices are shown in Table 1 below. For example, the annual US vs target generic prices for commonly used ARVs are approximately $18,000 vs $161 for abacavir/3TC, $21,000 vs $67 for tenofovir-DF/FTC and $34,400 vs $110 for Atripla. The recently off-patent cancer drug imatinib (Glivic/Gleevic), used to treat chronic myeloid leukaemia, has a US price of $106,000 but a potential generic target price of just $180.
|Drug||Current US price||Current lowest generic *||Minimum target cost||Comment / patent expiry|
|Hepatitis B (annual cost)|
|Hepatitis C direct acting antivirals (DAAs) (3 month course)|
|sofosbuvir + ledipasvir||56,700||507||96|
|sofosbuvir + velpatasvir||74,760||–||181-216|
|HIV antiretrovirals (annual cost)|
|Cancer drugs (treatment cost)|
|imatinib||106,322||790||180||Chronic Myeloid Leukaemia|
|erlotinib||79,891||1932||240||Non-Small Cell Lung Cancer|
|sorafenib||139,138||1332||1450||Renal Cell Carcinoma|
|cabazitaxel||120,613||30,810||660||Metastatic prostate cancer|
|dasatinib||10,408||1183||15||Chronic Myeloid Leukaemia|
* From India, Thailand, Brazil or South Africa.
In some high-income countries, including the UK, it is legal to important generic medicine for personal use (defined as a three-month course. This has become increasingly used to enable the only access to PrEP and HCV medications, often supported by community websites and buyer’s clubs.
Three other posters at Glasgow 2016 present new data on effectiveness of generic medicines. A pharmacokinetic analysis of generic PrEP used by gay men at the Dean Street clinic supported the used of several FDA-approved generic formulations that are easily available online. 
Two other posters reported high HCV cure rates reported by users of two international online buyer’s clubs. [5, 6]
In addition to making large profits from this inflated approach to pricing medicines in high-income countries, many of the largest manufactures avoid billions of dollars in US tax by registering profits in offshore accounts. In 2015, Pfizer, Merck, J&J, Amgen, Abbott and BMS avoided USD $ 20, 16, 14, 9, 7 and 7 billion dollars respectively. 
This study was based on a growing body of work that has been presented by Dr Hill and colleagues at other major conferences. At AIDS 2016 in Durban he connected pricing to other global health targets by showing that $90, $90, $90 are achievable goals to treat HIV and HBV for a year and to cure HCV in LMICs. 
High-income countries should not be planning health care based on LMIC prices while medicines are in patent – wealthier economies can and should pay more for medicines. But the excessive greed shown by the current prices is destabilising drug pricing globally and more importantly blocking access to treatment that people need now. As such, the personal use of generic versions of in-patent drug is easy to support.
Two years ago at Glasgow, Dr Hill reported how the availability of new generic ARVs could save the UK more than £1.25 billion over five years. 
- Hill A. Treatment for cancer, HIV and viral hepatitis in Europe using low cost generic drugs: what could be done? Glasgow Congress on HIV Therapy, 23-26 October 2016 (Glasgow 2016). Webcast:
- GBD 2013 Mortality and Causes of Death Collaborators. Global, regional, and national age-sex specific all-cause and cause-specific mortality for 240 causes of death, 1990-2013: a systematic analysis for the Global Burden of Disease Study 2013. Lancet. 2015; 385: 117-171.
- India Info Drive. Global export import data.
- Wang X et al. InterPrEP: internet-based pre-exposure prophylaxis (PrEP) with generic tenofovir DF/emtricitabine (TDF/FTC) in London analysis of pharmacokinetics, safety and outcomes. Oral abstract O315.
- Hill A et al. High sustained virological response rates using imported generic direct-acting antiviral treatment for hepatitis C, imported into Australia, UK, Europe and North America. HIV Glasgow, 23-26 October 2016, Glasgow. HIV Glasgow, 23-26 October 2016, Glasgow. Poster abstract 256.
- Hill A et al. Efficacy of generic direct-acting antiviral treatment for hepatitis C, imported into Russia and Eastern Europe. HIV Glasgow, 23-26 October 2016, Glasgow. Poster abstract 261.
- Citizens for Tax Justice, 2016.
- Hill A et al. Mass treatment programmes for HIV and hepatitis. Presented at ITPC satellite session MOSA3301.
- Hill A et al. Predicted saving to the UK National Health Service from switching to generic antiretrovirals: 2015-2019. International Congress of Drug Therapy in HIV Infection, 2 – 6 November 2014, Glasgow. Oral abstract 0-216.