Andrew Hill, Anton Pozniak and James Freeman, Chelsea and Westminster Hospital

Lead Authors: Andrew Hill, Anton Pozniak, and James Freeman
Organization: Chelsea and Westminster Hospital
Country: United Kingdom

Recent analyses have shown that several other major diseases could be treated for very low costs –

1. A 12 week course of treatment for Hepatitis C with generic sofosbuvir (Sovaldi, Gilead) is now on sale in India for under $500, versus the US retail price of $84,000. We have estimated that the cost of mass produced sofosbuvir should fall to under $100 per treatment course in 2016. There are over 150 million people infected with Hepatitis C worldwide, with 700,000 deaths per year. Sofosbuvir in combination with daclatasvir has cured over 90% of people with Hepatitis C in clinical trials. The combined cost of these two drugs could fall below $150 per 12 week treatment course this year. The basic patents on these drugs expire in 2029, but voluntary license agreements allow mass generic production at low costs.

2. A year of treatment with imatinib (Gleevec, Novartis) to treat Chronic Myeloid Leukaemia (CML) is being sold in India for $800, versus the US price of $108,000. We have estimated that imatinib could be mass produced for between $128-$216 per person per year. There are 48,000 new cases of CML each year worldwide. The patent on imatinib has just expired in the USA.

3. A year of treatment with entecavir (Baraclude, Bristol-Myers Squibb) to treat Hepatitis B is being sold in India as a generic for $427, versus the US originator price of $15,000. We have estimated that entecavir could be mass produced for $36 per person per year. Only 0.2 grams of drug are required for a year of treatment, as the dose is only 0.5 milligrams per day. There are over 350 million people infected with Hepatitis B worldwide, with 686,000 deaths from this disease in 2013 alone. The patent on entecavir has already expired in many countries.

4. Generic erlotinib to treat non-small cell lung cancer is being sold in India for $1900 per year, versus the US price of $79,000 from Roche. We have estimated that generic erlotinib could be mass produced for $240 per person per year. There are 440,000 new cases of this type of lung cancer each year, which would be eligible for treatment with generic erlotinib. The patent on erlotinib expires in 2020.

Estimating minimum costs of drug production

Pharmaceutical companies do not normally publish information on the true cost of production of their treatments. Previous estimates of production costs from pharmaceutical companies have been shown to be far higher than the final costs of production from generic companies. For example the HIV drug atazanavir was initially offered for sale in low income countries by Bristol-Myers Squibb for $2000 per person-year; the same drug is now mass produced by generic companies for under $200 per person-year. Likewise, Gilead initially estimated that sofosbuvir would cost at least $1100 per 12 week course to manufacture – the same drug is now being produced in India for under $100.

Estimation of minimum production costs is from two main sources:

1. There is a database showing exports of drugs from India to other countries – this is called www.indiainfodrive.com, and shows the costs per kilogram of “Active Pharmaceutical Ingredient”, or API. This is the actual drug in its pure form, before being formulated into tablets or capsules. If we know the cost of a kilogram of API, we can then estimate the cost to produce a course of treatment, including a profit margin to the generic company to ensure sustainable high-quality supplies. The costs of formulating drugs, bottling and packaging are normally insignificant compared to the cost of producing the API. There are similar databases available for generic treatments produced in China.

2. For drugs not yet manufactured in India, analysis of the route of chemical synthesis, the raw materials used in the synthesis, and the yields from each step in this process can be used to estimate production costs. These estimation methods are more approximate, but have been shown to be reliable for estimating costs for Hepatitis C drugs, which are now being produced for prices similar to those predicted from analysis of chemical synthesis. ,

Implementation Project plan

Our proposal includes seven key stages. This project could be coordinated by a team of scientists in association with WHO, and would need an annual budget of at least $2 million. Results would be updated on a website and regular publications to show the costs of production of all important medicines.

1. Analyse the true costs of production for all drugs in the World Health Organization’s “Essential Medicines List”, and then supplement this with analysis of the top 50 selling treatments worldwide. The Essential Medicines List can exclude treatments because their comparative cost-effectiveness is insufficient, but the WHO does not always have access to information on the underlying costs of mass production, which can often predict cost-effective generic versions. These estimated prices should then be agreed and validated with the largest generic companies, as happened with antiretroviral treatment for HIV.

2. Re-analyse cost-effectiveness models to show which treatments could be introduced in low or middle income countries for mass treatment at prices close to the cost of production. At current published prices, many treatments may currently not be cost-effective for use in low or middle income countries. However this situation could change significantly if the true cost of production were used, with an appropriate royalty to the originator company if the drug is still on patent.

3. Organise meetings with national health authorities to educate them on the true costs of production of medicines, and then gain agreement on the potential to treat a range of diseases at the new low prices, based on revised cost-effectiveness analyses.

4. Publicise the results on the true costs of medicines when mass produced. In these results, the costs for producing generics could be compared with local prices. There are many examples of medicines being sold as generics, at prices far above their cost of production, even after expiry of the patent. For example, Sun Pharmaceuticals has just launched generic imatinib in the USA at the annual price of $47,000 versus $1775 in India for the same generic drug produced by the same company. Companies which change more than 5 times the cost of production for generics could be identified in a database and open-access website, covering the list of medicines in the EML and the Top 50 selling drugs.

5. Ensure that the quality and clinical efficacy and safety of generic mass produced drugs can be supported with published evidence. There is a widespread belief that generic drugs may be somehow inferior to those from originator companies, not bioequivalent, or even counterfeit. Bioequivalence data should be routinely published, together with clinical trials evaluating efficacy and safety outcomes on generic treatments. Currently it can be unclear which generic companies are producing high quality products, and results from quality controls and company audits for “Good Manufacturing Practice” need to be transparent.

6. When one drug in a group used to treat the same disease becomes generic, re-evaluate the cost-effectiveness of all other higher-priced drugs in the same class - their prices may no longer be justified. For example, the patents on several key treatments for HIV either have already expired or are about to expire.

7. Where a globally important drug or set of drugs is still far from patent expiry, set up a system of voluntary licensing to allow mass production of the treatment for use in low and middle-income countries, with royalties paid to the originator company.

Impact on public health
The public health benefits of expanded treatment access are potentially very large. One in three people do not have assured access to essential medicines worldwide, and in low income areas in Africa and Asia, only one half have access.

Depending on the number of diseases which could be successfully treated, there is the potential to save millions of lives each year.

• Potential impact in cancer treatment
Global cancer mortality was 8.2 million deaths per year in 2012 and is rapidly rising, with most disease burden lying occurring in low- and middle-income countries (LMICs). , Survival rates in LMICs are significantly worse than in high-income countries (HICs). However, a recent survey found that only 15% of patients in low and middle income countries in Southeast Asia have access to a standard set of cancer medicines.

• Potential impact in tuberculosis treatment
There were 9 million new cases of TB in 2013, of which 480,000 were multidrug-resistant (MDR-TB).(4) Treatment success rates are 86% for drug-sensitive TB, 48% for MDR-TB, and 22% for extensively drug-resistant TB (XDR-TB). While the FDA approved bedaquiline for the treatment of MDR-TB in 2012, fewer than 1,000 patients have been treated. Linezolid, a key drug for the treatment of XDR-TB, is sold by Pfizer at $68 per pill in South Africa, when a generic version is available through the Global Drug Facility at $6.90 a pill.

• Potential impact on treatment of diabetes
The global burden of diabetes is estimated at 347 million people. New oral diabetic control medicines are increasingly attracting interest from generic manufacturers, with recent cases of patent disputes heard in Indian courts. In Mozambique, Zambia, Mali, Nicaragua, Vietnam and Kyrgyzstan, the annual cost for insulin exceeds the average public sector pharmaceutical expenditure per person by a factor of 40.

Impact on human rights
It has repeatedly been affirmed that access to affordable medicines is an essential component to the human right to health. This system could ensure that people in a range of countries consistently have access to a wider range of treatments, and that their personal income is no longer a barrier to treatment access.

Evidence:
The references included in the bibliography show the methods used to estimate the minimum cost of treatment for Hepatitis B, Hepatitis C, certain cancers and Tuberculosis. The predictions of costs to treat Hepatitis C, originally made in 2013, have been shown to be reliable given recent sales prices for mass produced Hepatitis C treatments in India. In the past, similar predictions of the minimum cost of treating HIV have been shown to be reliable.

Bibliography and References

Key references on calculation of minimum costs of treatment:

Hill A, Gotham D, Cooke G, et al. Analysis of minimum target prices for production of entecavir to treat hepatitis B in high- and low-income countries. J Virus Erad 2015;1:103–10

Hill A, Khoo S, Fortunak J, et al. Minimum costs for producing hepatitis C direct-acting antivirals for use in large-scale treatment access programs in developing countries. Clin Infect Dis 2014;58:928–36. doi:10.1093/cid/ciu012

Hill A, Simmons B, Gotham D, Fortunak J. Rapid reductions in prices for generic sofosbuvir and daclatasvir to treat hepatitis C. J Vir Erad 2016, 2: 28-31

Hill A, Gotham D, Fortunak J, Meldrum J, Erbacher I, Martin M et al. Target prices for mass production of tyrosine kinase inhibitors for global cancer treatment. Brit Med Jour Open 2016, 6: e009586

Hill A, Gotham D, Fortunak J et al. Target generic prices for mass production of novel treatments for tuberculosis. European AIDS Conference, Barcelona, Spain October 2015.



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Hill A, Khoo S, Fortunak J, et al. Minimum costs for producing hepatitis C direct-acting antivirals for use in large-scale treatment access programs in developing countries. Clin Infect Dis 2014;58:928–36. doi:10.1093/cid/ciu012


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