No treatment Ebola, high prices for hepatitis C drugs: Time to change the pharmaceutical research system

When there is a profitable market, such as that for hepatitis C in the US and Europe, medicines are marketed at extremely expensive prices. Countries such as Egypt, which has a high burden of hepatitis C, cannot afford such high prices.

Ebola and hepatitis C are both examples of the monopoly ownership system that allows pharmaceutical companies to control R&D and the price of medicines.

The medicines currently under investigation for Ebola have raised a number of ethical questions. Some of the medicines, including ZMap, used by American, British and Spanish patients who have caught Ebola in West Africa, have not yet gone through clinical trials. It is not clear whether the medicines can treat Ebola effectively and safely, and there is minimal knowledge about their side effects.

Given that the medicines are still at the experimental stage, they do not exist in sufficient quantity to treat all patients. Some say that health workers should have priority because they are most at risk and they are the ones at the forefront of the outbreak. The Gulf States are reported to be planning to buy the experimental medicine in case their citizens become infected^[1].

There are currently 17 diseases identified by the WHO as “neglected diseases” because of the lack of investment in R&D to prevent or treat them[2]. Thanks to civil society advocacy, there is now a spotlight on the plight of people affected by neglected diseases, so that more public and philanthropic funding is available. Yet Ebola and other haemorrhagic fevers have not even made it onto this list, which includes diseases such as bilharzias and leprosy. It is now painfully clear that a new list is much overdue.

Large companies will not invest in R&D for rare and neglected diseases, due to the limited scope for profit. Current R&D for Ebola medicines is carried out by small biotechnology companies and is financed with public money. Throughout the history of medicine, public funding has played an essential role in developing breakthrough medicines, including for the treatment of HIV, tropical diseases and cancer. Yet this role has been ignored in favour of promoting strict intellectual property rules, so that the choice of targets for R&D is left to the market where monopoly protection will reap the greatest profit. It is neither ethical nor sustainable to leave decisions and financing for R&D to be dictated by the commercial interests of pharmaceutical companies.

Marijn Dekkers, the CEO of Bayer, gave the game away when he said: “We did not develop this medicine for Indians. We developed it for western patients who can afford it”^[3].

The hepatitis C virus infects an estimated 180 million people around the world who mostly live in middle-income countries[4]. However, there are enough infected patients living in more affluent countries to make the market sufficiently profitable to attract pharmaceutical companies.

Recently, a new class of medicines has been developed which acts directly on the virus and has a cure rate of over 90%. One of these medicines is sofosbuvir (Sovaldi), developed by Gilead and sold at US $1000 per pill. The 12 week treatment course would cost US $84,000 – a price totally unaffordable in low and middle-income countries. Even high income countries are facing difficulties in paying such an exorbitant price. Some US insurance companies are instructing doctors to limit prescriptions of this medicine to specific patients. The French health minister has called on Europe to collectively negotiate a better price saying that the current cost would have grave implications for the French health system. This is the first time that the US and EU payers have widely and publicly questioned prices of new medicines[5].

By setting such a high price, Gilead has profited over US $5 billion from sales between January and June 2014[6]. The company has offered Egypt and Mongolia (both have a high burden of hepatitis C) a price of US $900 for a 12 weeks course to be used in the public sector only[7]^,[8]. Yet even at such a reduced price, treating 5 million patients (less than half the estimated number of infected people) would cost Egypt US $4.5 billion - almost 2/3 of the country’s total current health budget of US$ 7.22 billion for 2014/15[9].

While pharmaceutical companies use the cost of R&D to justify the high price of medication, this claim cannot be verified, as there is no transparency about the real costs to companies. The claim also ignores the contribution of public funding in preliminary research, and sometimes in clinical trials.

The history of HIV has clearly shown that the most effective mechanism to decrease prices of medicines is through generic competition. In the year 2001, the world ignored the millions dying of HIV when the price of the triple cocktail treatment was US $10,000 per patient per year. Now that generic competition exists in this market, the price has now dropped to around US $100, which has enabled 10 million people to now be on treatment. At the initial high price, these people would have been dying or dead.

Unfortunately, such competition will be difficult because the World Trade Organization’s Trade Related Agreement of Intellectual Property Rights (TRIPS) Agreement enables monopoly rights over new medicines. As a result, the company that developed the drug, and thus owns the patents, can charge whatever price the market will bear. However, governments can use mechanisms such as compulsory licensing, which are legal under TRIPS, to break the patent monopoly and allow generic companies to compete and manufacture medicines marketed at lower prices.

Ebola and hepatitis C are examples of diseases that would be treatable if the global system of incentives for R&D was designed with the interests of public health in mind. Instead, priorities and financing decisions for R&D are left to the market so that pharmaceutical companies continue producing the medicines that can make the highest profits rather than the therapies that are desperately needed for public health. As a result, new medicines will continue to be sold at the highest prices, and won’t be affordable to patients in developing countries and increasingly to patients in affluent countries.

The time has come for all countries to commit a percentage of their GDP to medical research, providing a fund for the development of health technologies that would benefit all. Such a financing mechanism would give the decision on priorities for R&D and on affordability of prices back to the public, where it belongs.

References

[1] http://www.newtoday.ae/world/61848.html accessed 21 August 2014

[2] http://www.who.int/neglected_diseases/diseases/en/ accessed 21 August 2014

[3] http://keionline.org/node/1910 accessed 23 August 2014

[4] http://www.who.int/bulletin/volumes/90/7/11-097147/en/

[5] http://www.globalhealthcheck.org/?p=1630

[6] http://investors.gilead.com/phoenix.zhtml?c=69964&p=irol-newsArticle&ID=1950450&highlight= accessed 2 September 2014

[7] http://www.reuters.com/article/2014/03/21/hepatitis-egypt-gilead-sciences-idUSL2N0MI1ID20140321

[8] http://www.infomongolia.com/ct/ci/7948 Accessed 1 September 2014

[9] FY 2014/2015 state budget announced, analysts weigh in Daily News Egypt 26 May 2014http://www.dailynewsegypt.com/2014/05/26/fy-20142015-state-budget-announced-analysts-weight/accessed 2nd September 2014

Source: Ahram Online