TB CAB, TAG open letter to Cepheid

Re: GeneXpert machine and Xpert MTB/RIF cartridge pricing, extended warranties and business in Russia and the People’s Republic of China






The Global TB Community Advisory Board (TB CAB) and the Treatment Action Group (TAG) sent an open letter to Cepheid raising the following concerns:

1) high Xpert MTB/RIF cartridge and GeneXpert instrument concessional pricing;

2) costs associated with warranty;

3) high pricing in the public sector in Russia; and

4) the costs of the GeneXpert modules and cartridges, lack of registration of the Xpert MTB/RIF cartridges, and greater efforts to broaden access to Xpert MTB/RIF particularly in all CDC, TB Control and Prevention Centers and infectious diseases hospitals in China.

The letter requests that Cepheid:

1. further decrease the price of Xpert MTB/RIF cartridges (below US $9.98 per cartridge) given the large volume already purchased and increased procurement projections for 2014 and beyond, particularly in light of the new WHO policy update

“More than a year after the initial but insufficient price reduction, and with sales increasing exponentially, we urge you to decrease the price of cartridges below US $9.98 based on volume-related thresholds.”

2. decrease the price of GeneXpert instruments from US $17,000-17,500 for high burden countries

“As instrument sales have similarly risen, with over 1,800 instruments purchased under concessional pricing, we urge you to lower the price of GeneXpert instruments as well. Following up on previous communication in April 2012, we remain disappointed that the price of GeneXpert instruments has not been reduced as requested from the high price of US $17,000 and $17,500.”

3. provide extended warranties free of charge due to the impact the company’s proposed price increases will have on national TB and HIV programs

“We find it unacceptable that Cepheid should profit from extended warranties in high burden countries due to high module failure rates and for a technology partly developed by public funds. Cepheid must remove any additional warranty costs.”

4. clarify the differential pricing for Xpert MTB/RIF cartridges in Russia and outline the company’s plans to rectify the situation to ensure that the Russian public sector can access the negotiated buy-down price of US $9.98 per cartridge

“We are concerned that machines and cartridges purchased for public institutions, but outside of the existing public procurement mechanism, are now subject to extortionate prices. We call on you to ensure that all public institutions go through the public procurement mechanism to ensure access to the negotiated buy-down price.”

5. clarify the differential pricing for GeneXpert modules and Xpert MTB/RIF cartridges in China

“China is one of the countries eligible for concessional pricing for GeneXpert modules (US $17,000-17,500 per module) and cartridges (US $9.98 per cartridge). In China GeneXpert IV costs RMB1,100,000 (US $180,623.97), GeneXpert II costs RMB700,000 (US $114,942.53) and the cartridges are being sold for RMB300 (US $49.26). We would like to know why the modules are at such exorbitantly high costs and why cartridges are almost five times the concessional price?”

6. provide details on company's plans to register Xpert MTB/RIF cartridges in China

“The GeneXpert I, GeneXpert IV and GeneXpert XVI were all registered in 2011 at the Chinese Food and Drug Administration but to date the Xpert MTB/RIF cartridges have not been registered. We would like to know your projected timeframe and plans for registration of the cartridges in China?”

GeneXpert MTB/RIF has contributed to advances in the diagnosis of tuberculosis (TB) and drug-resistant TB around the world. The use of Xpert MTB/RIF is critical as a diagnostic tool in the fight against TB. In various settings GeneXpert MTB/RIF has contributed to an increase in multidrug-resistant tuberculosis (MDR‐TB) diagnosis, increasing the chance of appropriately treating and curing more people.

The letter can be downloaded from here.

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By TB CAB, Treatment Action Group

Published: Jan. 8, 2014, 3:53 p.m.

Last updated: Jan. 23, 2014, 3:48 p.m.

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