Colombian Government Refuses Request to Issue Compulsory License on Expensive HIV/AIDS Drug

On May 22, 2009, Colombian civil society organizations learned that the Colombian Ministry of Health decided not to declare access to HIV/AIDS medicine lopinavir + ritonavir (LPV/r) a matter of public interest. The ministry’s decision halts government consideration of a compulsory license request, initiated in July 2008, that would introduce price-lowering competition with Kaletra, Abbott Laboratories’ brand-name version of the drug.

Colombian networks of people living with HIV/AIDS are criticizing the health ministry’s process in considering the request – which seems to have deeply engaged Abbott while excluding treatment advocacy groups and the organizations that filed the request – and are describing the decision as a missed opportunity to work toward the U.N. Millennium Development Goals.
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The government argues insurers are required to provide Kaletra to those who need it, and so price is not a primary factor impeding access. But Kaletra’s high price passes on unnecessary costs to consumers, taxpayers and people living with HIV/AIDS, and diverts healthcare investments from critical priorities – for example, access to other needed medicines and universal HIV/AIDS coverage. Colombian civil society groups also note high medicine prices exacerbate inefficiencies and failures in the health and insurance systems, and make it too expensive to find alternatives when coverage failures do occur – therefore prices do impede access to treatment.

The decision also follows a government order establishing maximum prices for Kaletra at $1,067 per person, per year for the public sector, and $1,591 for the private sector, down from around $3,400 and representing average price reductions around 54% – 68%. This price ceiling is a direct result of the compulsory license request, and according to government figures will save the healthcare system about $10.2 million U.S. per year.

Price, then, clearly does matter to the Colombian government – just not enough to challenge Abbott’s monopoly. At least, in the ministry’s words, “for the moment.”

The announced price reductions are significant, represent an overdue challenge to Abbott’s pricing practices, and signal a positive shift in civil society groups’ ability to influence health policy.

But the health ministry seems to be treating monopoly price reduction as a substitute for competition. It is inadequate in this regard. New Clinton Foundation agreements with three generics firms offer LPV/ r for $470, and Peru recently obtained LPV/r from Eske Group – a Cipla affiliate – for the low price of $396. Colombia will continue to pay considerably more than a competitive market would bear. Further, Colombia’s new public sector price – roughly equivalent to Abbott’s monopoly price in other regional markets – applies to only a small percentage of Colombia’s market (possibly, it seems, even less than 8%). In practice, Colombia will continue to pay more than its neighbors, even those that share the dilemma of an Abbott monopoly.

To date it is unknown whether Abbott has agreed to sell Kaletra at Colombia’s new price. Competition remains the only way Colombia can access the far better generics prices, and ensure prices continue to fall with time. Deep cost savings enable health programs to scale up treatment.

To that end, the Colombian HIV/AIDS groups have called for supervision of savings obtained through the price reduction, and concomitant investments in sectors of the medicines provision system most prone to failure.

Colombian treatment advocates richly deserve congratulations, and thanks, for significantly reducing Abbott’s prices and shaking up Latin America healthcare politics. They’re not content with this, though – the groups are already investigating avenues of appeal and further proposals to introduce generic competition.

To download the Colombian health ministry’s decision (Resolución 001444 – in Spanish), click here: Resolucin01444Kaletra8-05-09DEFINITIVA.doc

To download the Annex to the decision document (Technical Committee Report – in Spanish), click here: Resolucin01444ANEXODEFINITIVO.doc

Colombian civil society groups’ analysis and press release regarding the decision (in Spanish) can be viewed on the web here, or downloaded here: ColombianCivilSocietyResponse052609.doc

An archive of articles on the compulsory licensing request (in Spanish) can be found here.