Price-negotiations for new-generation antibiotics against drug-resistant TB will of little use in improving affordability
Sakthivel Selvaraj & K Srinath Reddy
Globally, 6 lakhs new drug-resistant tuberculosis (DR-TB) cases are reported, and among them 2.4 lakhs succumbed to premature deaths last year. Nearly, 1.47 lakhs Indians reported DR-TB, with one-fifth of them succumbing to the disease annually. After a gap of five decades in emergence of new antibiotic therapies, the new generation TB drugs (bedaquiline and delaminid) offer hope. Both these drugs are in the final stage of clinical trials, showing promise on safety and efficacy. Patients with drug-resistant TB require a combination of both these drugs.
Currently, in India, bedaquiline is administered to nearly 1,000 patients, based on donations from Janssen. Similarly, Otsuka, is providing delaminid as donations to a tiny number of patients. Both these medicines are given to patients through the government TB control programme. In 2019, the company-initiated donations of these drugs to the small patient group will end. Janssen and Otsuka, which have patents, are currently producing them, but the prices at which new medicines are likely to be supplied will be beyond the reach of even the middle-class. As per media reports, bedaquiline and delaminid are expected to be priced at over 5 lakhs per patient for a treatment spanning 18 months.
The need for providing these medicines at an affordable price, if not free, is far more critical now than ever, given the growing burden of drug-resistant TB strains that will result in death and disability besides financial ruin. Households face catastrophic spending from their meagre annual incomes, while governments will face even larger expenditure in their budgets if they are to procure these drugs from patent-holding manufacturers.
What options are available before the government? With the donations set to expire soon, the drug-makers must be looking for price negotiations with the government. Donations can only be temporary solutions, as are price negotiations. Price negotiations can delay access to medicines and can make medicines unaffordable, as demonstrated by the recent experiences of Latin American countries and Thailand. Price negotiations are expected to reap a discount of no more than 15-20%. Any bulk purchasers with adequate budgets can extract such a discount easily.
The government, therefore, has a compelling case for exercising extreme urgency provisions [Indian Patent Act 1970 (amended in 2005) provision 92(3) iii] in view of no alternative equivalent therapies available currently in India. However, this requires an application from a domestic company underscoring its capacity to produce it at an affordable rate.
The backlash, in the form of litigation by powerful pharma drug-makers on generic manufacturers, Natco and Cipla, which supply the generic version Nexavar—after a compulsory licence was issued by the government, is still fresh in the minds of local producers. They are, therefore, reluctant to take a plunge. As a tactical step, domestic manufactures have started tying up with patent manufacturers to secure voluntary licences to produce generic versions of the new molecules. The royalties are staggering and the resulting price is still way beyond the reach of common masses.
That leaves the government with a final option of invoking the case for public non-commercial use [under the amended Patent Act of 1970, Provision 92 (3) (ii)]. Thailand, Malaysia, Brazil and many other countries used similar provisions to provide HIV/AIDS drugs for patients at public health care facilities. During 2001, the US government had used the national emergency provision in Anthrax case to exercise CL provisions, arguing that demand would be greater than supply of patented medicines.
If the government were to invoke public non-commercial use provision, will the domestic manufacturers be willing to take on the challenge? Given past experience and going by media reports, they are unwilling to do so. Therefore, public sector drug-makers appear to be the only option that the country can bank upon. Do public sector pharmaceutical companies have the capacity to take on the challenge? While IDPL and HAL are on the brink of closure, there are other public sector undertakings (such as Karnataka Antibiotics and Pharmaceutical Ltd), which are currently profitable and can be tasked with this responsibility. However, a rapid and significant investment and augmentation of plant capacity is required so that they are designed to produce new, complex molecules.
The need for expanding public sector capacity is even greater now given the vulnerabilities caused by India’s reliance on import of API (Active Pharmaceutical Ingredients for making formulations) from China and other countries. The domestic pharmaceutical companies will not only be rendered vulnerable to closure but also the population’s health will suffer the most if disruptions in supply or cost escalations destabilise access to APIs.
Moreover, since private pharmaceutical companies are moving to circumvent drug-price control mechanisms by simply stopping production of key essential drugs, the imperative of strengthening public sector drug makers has become extremely critical. The High-Level Expert Committee on Universal Health Coverage in 2011 made a robust case for intervening and strengthening the government-run pharmaceutical companies. While the role of private entities in production and supply of drugs has been largely beneficial thus far, essential and life-saving medicines’ production and supply cannot be left to the vagaries of market forces. Public sector capacity will be our best defence against non- availability and non-affordability of essential drugs.
Authors are with the Public health Foundation of India. Views are personal