Latin American Countries Set Up Joint Procurement Mechanism For Drugs
This article was originally published in SRA
Pharmaceutical companies wanting to sell high cost drugs in Latin America may find themselves talking with multiple countries at once to find a single acceptable price.
Mercosur member and associate countries are wielding their collective might to secure lower prices through a new negotiation mechanism supported by the Pan American Health Organization/World Health Organization1.
Mercosur health ministers have already announced an offer from Gilead to supply its hepatitis C drug Sovaldi (sofosbuvir) and next up for discussion are likely to be costly cancer medicines.
Last year, health ministers from Mercosur member states (Argentina, Brazil, Paraguay, Uruguay and Venezuela) and associate countries (Chile, Bolivia, Peru, Bolivia, Ecuador and Suriname) met with pharmaceutical companies to discuss the prices of essential medicines.
Gilead sat down at the negotiating table and has offered to sell its hepatitis C drug Sovaldi (sofosbuvir) to all participants at the current lowest price in the region. This is the price that Brazil currently pays - $81.85 per tablet, says PAHO.
The firm told Scrip Regulatory Affairs that it is waiting for a final decision on whether the offer would be accepted. "Gilead presented a pricing structure for Sovaldi that would facilitate a significant increase in the numbers of patients who can be treated and cured of their disease," said Norton Oliveira, the firm's vice-president of access operations and emerging markets, Latin America.
PAHO supported the negotiations as an observer, by providing technical assistance ministers and through the PAHO Strategic Fund, which supports the joint procurement of medicines and health technologies.
According to Argentina's health ministry, the talks on hepatitis C were a success. It also said that ministers are also interested in a deal on securing a lower price for Harvoni (sofosbuvir plus edispravir). Nevertheless, the Argentinean ministry warned that other companies were not playing fair.
It complained that Bristol-Myers Squibb offered its hepatitis C drug Daklinza (daclastavir) at a price that was 580% higher than the price paid in Brazil. BMS confirmed to Scrip Regulatory Affairs that it had "extended a price-offer letter for the purchase of Daklinza 60 mg". It added that in its response to Mercosur, the firm had emphasized that it was "open to further discussions on treatment strategies aimed at eradicating hepatitis C in South America. An essential component of this would be broad access to treatment."
Meanwhile, according to Argentina's health ministry, a deal was struck with the Indian firm Hetero, which will provide the HIV/AIDS drug darunavir at $1.27 per tablet2. Previously the lowest price available to any country was $2.98. The drug is to be purchased through the PAHO Strategic Fund and will be available to any PAHO member that participates in the fund.
The new price negotiation mechanism seems to be here to stay. "This is a clear example of South-South collaboration towards universal health," said James Fitzgerald, Director of PAHO's department of health systems and services. He added that countries and companies had worked together to facilitate access to medicines." It's a first step and one that signals greater collaboration in this area in the future." PAHO says that high cost oncology medicines will be up for discussion at the next meeting.
Concern about medicine prices in the region has been mounting and companies have come under heavy fire for the prices they charge. "These high-cost medicines are so expensive that they threaten the sustainability of health systems as well as the Pan American commitment to universal health," said Carissa Etienne, director of PAHO, at a recent PAHO meeting.
Joint action on pricing is on the rise elsewhere too. Bulgaria and Romania have announced joint procurement plans, and Belgium, the Netherlands and Luxemburg are working on a pilot to negotiate better prices for orphan drugs. The latter goes beyond joint procurement and aims to give some buy in for companies too.
Companies have mixed feelings about joint price negotiations. They risk lower prices but can also promise bigger volumes through access to a bigger pool of patients. Gilead, for one, did not seem worried by the talks. "We welcome the proactive and meaningful dialogue on joint procurement with the Pan American Health Organization. Price negotiation is a core component of our access approach in South America," it said.
References
1. PAHO press release, Nov. 17, 2015, www.paho.org/hq/index.php?option=com_content&view=article&id=11441%3A2015-mercosur-estados-asociados-concretaron-mecanismo-de-compra-de-medicamentos-de-alto-costo-con-apoyo-ops&Itemid=1926&lang=en
2. Argentine health ministry release, Nov. 13, 2015, www.msal.gob.ar/prensa/index.php?option=com_content&view=article&id=2964:mercosur-y-estados-asociados-definieron-compra-conjunta-de-un-medicamento-para-tratar-vih&catid=6:destacados-slide2964