A Clinton Twist On Price Negotiation: Hillary’s Role With PEPFAR

Former President Bill Clinton's convention speech cites his wife's experience with driving down cost of HIV therapy supported by the AIDS relief program.

Presidential candidate Hillary Clinton has experience driving down the costs of HIV drugs – for use overseas – from her time running the President’s Emergency Plan for AIDS Relief (PEPFAR) as Secretary of State. Ex-President Bill Clinton referred to that success in ex-US price negotiations in the litany of her change-making accomplishments during his July 26 Democratic Convention speech.

“Nobody ever talks about this much, but it is important to me,” Clinton said towards the end of his description of accomplishments. “She tripled the number of people with AIDS in poor countries whose lives are being saved with your tax dollars, most of them in Africa, going from 1.7 million lives to 5.1 million lives. And it didn’t cost you any more money.”

Ex-President Clinton described the strategy for treating more people on a fixed government program budget as shifting more use to lower cost products. “She just bought available FDA-approved generic drugs,” he explained, adding a twist with an eye to the domestic issues likely to be more relevant in the upcoming general election: the strategy is “something we need to do for the American people more.”

Given the heightened sensitivity to pricing threats in the current election cycle, ex-President Clinton’s comments have scare value. If nothing else, they underscore the experience and interest of both Clintons with tackling drug prices and finding workarounds. (Also see "Clinton Vs. Trump: Three Scenarios For Biopharma" - Pink Sheet, 25 Jul, 2016.)

That said, extrapolating the success in driving down prices for PEPFAR products to drugs used in the US is a big leap.

The PEPFAR program is a special case, one started not by the Democrats but by the George W. Bush Administration. It has its own rules – permitting FDA to approve products specifically for use in the program and not for use in the US. There are, in fact, almost 190 products that have “tentative” approval from FDA to qualify for PEPFAR use.

The PEPFAR approval process has created a market for some US producers overseas. Mylan has been a major supplier of antiretrovirals to the ex-US market. The company says that “more than 50% of patients in the developing world receiving treatment for HIV/AIDS rely on a Mylan product.”

Mylan has also built ties with ex-President Clinton’s global drug development and delivery efforts through the program as part of its efforts to develop a new dosage level for a three-component fixed combination called TLE400 (tenofovir disoproxyl fumarate 300 mg; lamivudine 300 mg, efavirenz 400 mg).

Mylan said that it had partnered with the Clinton Health Access Initiative (CHAI) to develop TLE400. The pricing objective is a product that can be delivered to outside funding agencies and donors at $99 per patient per year.

Previously, a three-component product with a higher dose of efavirenz (600 mg) had been available from Mylan (Matrix) and three Indian firms: Aurobindo, Cipla and Hetero. (The Hetero product had its “tentative” approval status revoked by FDA in May of this year because of quality production concerns.)

Mylan’s collaborative effort with CHAI re-emphasizes the continued activity of both Clintons on drug pricing and suggests some of the positive working relationships that may have formed between drug firms – albeit generic specialists – with ex-President Clinton’s global health work and Hillary Clinton’s time at the State Department.

And that in turn suggests that it is worth watching whether Bill Clinton’s suggestion that the PEPFAR experience could be applied to the US was just a throwaway line – or the first warning shot of a different approach to controlling prices in some drug classes.

From the editors of the RPM Report.