Q&A on New Pricing Agreements
Q. Why is CHAI working with these specific companies? Is CHAI limiting competition by not working with others?
A. CHAI welcomes the opportunity to work with all manufacturers, generics and innovators. CHAI agreements are not exclusive, which means that additional suppliers are free to enter the marketplace and compete on these products. The introduction of new products to the marketplace through agreements with CHAI actually helps define the need for those products, paving the way for a competitive landscape in the future.
Q. How do these new prices compare to existing prices in the market?
A. Today’s total price of $475 for all three pill components of a full second-line regimen is the first time second-line therapy has been available for under $500 per patient per year. This price is $115 less than the next-lowest-priced second-line regimen, a LPV-based regimen that is available to members of the CHAI Procurement Consortium at a ceiling price of $590 per patient per year. When the three components are made available by Matrix in a single package next year, the pricing will fall to $425, 28% lower than the LPV-based regimen. The average price paid for the comparable LPV-based regimen in 2008 in relevant markets (low and middle income) was nearly $800.
Rifabutin will be available at $1 per dose, or $90 for a full course of therapy over six months (since rifabutin is given once every other day). This price will reduce the overall price of rifabutin-based treatment for TB-HIV co-infection to below that of the traditional rifampin-based treatment for the first time. The price difference will be nearly $200, or 33%, for the six-month course of treatment for both TB and HIV/AIDS together.
Q. How do reduced prices improve the quality of care?
A. Reduced prices enable countries to use products with preferred clinical outcomes that may have previously been inaccessible due to high costs. The high cost of second-line therapy has discouraged some countries from prioritizing the provision of these drugs to patients who experience first-line treatment failure. It is expected that the lower prices for second-line ARVs and rifabutin achieved through the agreements announced today will enable countries to devote more attention and resources to this area, which is critical for sustaining the quality of care for patients.
Q. Are there any hidden or additional costs that purchasers will need to pay?
A. In general, CHAI prices are “ceiling” rates, meaning CHAI partner suppliers must quote at or below these rates in response to tenders. The ceiling prices themselves are in “Free Carrier” (FCA) terms, meaning that they do not include applicable shipping and handling charges from the point of export. It is common for the prices of ARVs to be reported on an FCA basis. Shipping and handling fees add to the FCA price of a product. In addition, some purchasers choose to use procurement agents such as UNICEF, IDA or Crown Agents, which typically adds 5-10% to the price. These costs are not particular to products and prices offered under CHAI agreements.
Q. Will CHAI procure these products?
A. CHAI will begin procuring ATV and RTV for beneficiary countries as part of the UNITAID Second-Line Program once the products undergo quality assurance review by UNITAID. Though the Second-Line Program will begin phasing out at the end of this year, UNITAID has granted an extension of funding through 2011 for these specific formulations to encourage rapid uptake in beneficiary countries. This continued funding will cover ATV and RTV single formulations; the co-pack of ATV, RTV, and TDF+3TC; and a fixed-dose combination of ATV and RTV if/when that becomes available.
CHAI will not procure rifabutin, but is working closely with Pfizer and local treatment programs to identify need and ensure its adoption and uptake.
Q. Will others be able to procure these products at the negotiated prices?
A. Members of the CHAI Procurement Consortium will also be able to procure these products at CHAI’s negotiated prices, subject to the quality assurance requirements of those purchasers and patent laws of the recipient countries. Matrix has submitted dossiers for ATV and RTV to the WHO Prequalification Programme and WHO Expert Review Panel (ERP). Once approved by the WHO ERP, these products can be purchased by governments using funds from the Global Fund to Fight AIDS, Tuberculosis, and Malaria.
Pfizer is extending the reduced pricing for rifabutin to emerging markets that include all of the CHAI Procurement Consortium plus additional countries.
Q. How does CHAI ensure that the products they support are of high quality?
A. All of the products included in today’s announcement have either been approved by or submitted to a stringent regulatory authority such as the WHO or U.S. FDA. In the case of generic products, submissions to the WHO or FDA include data establishing bioequivalence to originator products, based on tests by research laboratories that have been successfully audited by the WHO and/or FDA.
CHAI will also ensure that all products supplied through its partnership with UNITAID are of high quality through a comprehensive quality control process. This will include random testing of product samples in independent labs to ensure that the chemical composition of the drugs match the specifications. For purchases of these products made directly by members of the CHAI procurement consortium, CHAI recommends using similar ongoing quality control measures.
Q&A on Second-Line HIV/AIDS Treatment
Q. What are second-line antiretrovirals (ARVs)?
A. The initial cocktail of antiretroviral drugs given to an HIV-positive patient (a “treatment-naïve” patient) is referred to as “first-line” therapy. Over time, HIV can develop drug resistance and first-line medications may fail to control the level of HIV in the body. When this occurs, there is a need to switch the patient to a new combination of ARVs that together comprise “second-line” therapy. In developing countries, standard second-line regimens include a class of ARVs known as protease inhibitors which are primarily responsible for the efficacy of second-line treatment.
Q. Why do second-line ARVs cost more than first-line ARVs?
A. Protease inhibitors are typically bigger and more complex than first-line drugs at a molecular level, and are therefore more expensive to manufacture. These drugs are also often dosed at higher levels; dosage is directly related to pricing because the need to produce a larger amount of active ingredient per day of therapy increases costs and therefore prices. Finally, there has historically been more limited competition in the marketplace for second-line drugs, though this is starting to change. The UNITAID Second-Line Program has helped to create a guaranteed market for second-line medicines that has induced new manufacturers to enter the market for these products. Together, these features help to explain the greater cost of second-line medicines.
Q&A on Atazanavir/Ritonavir (ATV/r)
Q. What advantages does atazanavir (ATV) offer over other medicines currently available?
A. Atazanavir is one of two protease inhibitors recommended most strongly by the WHO. The combination of atazanavir and ritonavir (ATV/r) offers a number of advantages over other protease inhibitors, and specifically over the combination of lopinavir and ritonavir (LPV/r), the other protease inhibitor highly recommended by the WHO. First, ATV/r is less expensive than LPV/r and other options, largely because the daily dosage of ATV is substantially lower than that of lopinavir (LPV). This price advantage will allow countries to maximize the impact of their treatment programs by treating more patients within existing budgets. Second, ATV allows for a significantly more convenient dosing regimen. ATV-based second-line therapy will require taking three pills once per day, as compared to LPV-based regimens that require 5 or more pills taken twice daily. Increased convenience of dosing is often associated with higher levels of patient compliance to the dosing instructions, and thereby with greater levels of treatment effectiveness.
Q. Why is ritonavir (RTV) significant for the treatment of HIV?
A. RTV (further abbreviated as /r when combined with a protease inhibitor) is an agent that, despite having limited clinical effect against the HIV virus, makes ATV and other protease inhibitors more potent and improves their ability to control HIV.
The formulation of RTV available from Matrix, being announced today, is the first commercially-available, stand-alone version that does not require refrigeration. This “heat-stable” (HS) version is critical in developing markets where refrigeration is not readily available for the storage and transportation of medicines.
Q. Are ATV and RTV currently available in developing markets? Are patents an issue?
A. ATV is currently available in developing markets, but its use to date has been limited by the lack of an accompanying heat-stable formulation of RTV. Despite this barrier, numerous countries have adopted ATV/r as a preferred option in their national treatment guidelines in anticipation of improved product formulations and lower pricing. This trend is expected to accelerate now that a heat-stable version of RTV is available.
Neither ATV nor RTV is patented in India, such that Matrix is able to produce both products in India without infringing any patents. Meanwhile, countries' ability to purchase ATV and RTV from Matrix will depend on local patent status, which varies by country. Within the Clinton Foundation Procurement Consortium, all least-developed countries, most low-income countries, and some middle-income countries will be able to purchase ATV and RTV from Matrix under the agreement announced today.
Q. Will ATV/r be available in a single pill like LPV/r?
A. Right now, ATV and RTV are only available as separate pills. Matrix has announced today that they are in the process of developing a co-packaged product that would include the separate pills of ATV and HS RTV, along with a third pill – a fixed dose combination of tenofovir (TDF) and lamivudine (3TC) wherein the two drugs of TDF and 3TC are combined into a single pill. This co-packaged product would include all drugs comprising a full second-line treatment regimen. CHAI has nicknamed this product a “second-line-in-a-box”; it will become available in 2010 and will represent a significant step forward in convenience for patients taking second-line ARVs.
Several companies are also pursuing the development of a fixed-dose combination of ATV and RTV (ATV/r), which will combine ATV and RTV into a single pill for the first time. The timeline for availability of this product is not clear since product development challenges have already delayed progress toward product launch. CHAI is hopeful that it will become commercially available sometime within the next two years.
Q&A on Rifabutin and HIV-TB co-infection
Q. What are the connections between HIV and TB and why are they so important?
A. TB is the leading cause of death among HIV-positive patients. The WHO recently reported that over one third of all patients with HIV are also infected with TB, resulting in 1.4 million active cases of TB-HIV co-infection and over 450,000 deaths in 2007. Around 80% of these patients live in sub-Saharan Africa.
Q. What is the significance of rifabutin to the treatment of HIV-TB co-infection?
A. Rifabutin was developed and commercialized in the 1990s. It is clinically similar to an older TB medicine called rifampin. However, rifampin has an unfavorable effect on protease inhibitors whereby it substantially enhances the body’s metabolism of the protease inhibitors, resulting in sub-therapeutic levels in the blood. To counteract this effect, physicians will often increase the dosage of RTV to further boost the protease inhibitors. This has the effect of restoring the protease inhibitors to therapeutic levels but also has some negative consequences. The high levels of RTV and rifampin together result in high levels of liver toxicity. Furthermore, the cost of treatment goes up significantly due to the higher dose – and therefore higher cost – of RTV. Rifabutin does not have this same effect on protease inhibitors and therefore products lower toxicity, lower cost, and improved treatment outcomes. For these reasons, rifabutin is recommended for the treatment of TB in patients using protease inhibitors for their HIV/AIDS therapy.
Q. Other than rifabutin, what options exist to treat TB in patients on second-line HIV/AIDS treatment?
A. One option is to not treat the patient’s HIV infection for the six months it takes to cure TB. Clinical trials, however, have shown that delaying HIV treatment for six months leads to a 55% higher mortality rate. Another option is to take the second-line ARVs and the standard TB medicines along with a significantly higher dose of RTV, as described above. This option results in high levels of liver toxicity in 30% of patients and requires regular blood tests to monitor patient health.
Q. Why focus on rifabutin now?
A. With the greater than fifteen-fold scale-up of HIV treatment in developing countries over the past seven years, only recently has there been a significant number of patients who are both being treated with second-line ARVs and who live in countries with a high prevalence of TB. The need for rifabutin in these populations is expected to grow rapidly as the number of patients on second-line HIV/AIDS treatment continues to increase. In recognition of this growing problem, the WHO recently added rifabutin to the Essential Medicines List, which is expected to influence national treatment programs to recommend its use. Pfizer and CHAI are working together to respond to this need proactively by making rifabutin more broadly available immediately.
Q. Have other major health agencies endorsed the use of rifabutin? Are countries already using rifabutin for TB-infected patients on second-line HIV/AIDS treatment?
A. Yes. In addition to the WHO, the US CDC has also recommended the use of rifabutin in patients taking protease inhibitors. Although a number of countries have adopted or are in the process of adopting rifabutin into national treatment protocols, rifabutin is not yet widely available in emerging markets. As part of the agreement between the Clinton Foundation and Pfizer, Pfizer has agreed to seek all necessary government approvals to rapidly launch rifabutin in ten of the highest burden countries, including Brazil, India, South Africa and seven other African countries that together represent over 80 percent of developing world needs.
Q. How many patients need rifabutin?
A. Between 6,000 and 10,000 patients need rifabutin today, though the number is expected to more than triple over the next 5 years.
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