Clinton Foundation Announces a Bargain on Generic AIDS Drugs

by Celia W. Dugger
Published at The New York Times

Former President Bill Clinton announced yesterday that his foundation had negotiated deep price reductions for generic versions of costly, second-line AIDS drugs needed when the original medicines fail, as well as for less toxic, easier-to-use first-line medicines combined in a pill that can be taken once a day.

Standing next to Thailand’s health minister, Mr. Clinton also forcefully endorsed recent decisions by Thailand and Brazil to break patents held by American pharmaceutical companies that are charging prices Mr. Clinton described as exorbitant, but that drug company officials said were reasonable.

“No company will live or die because of high price premiums for AIDS drugs in middle-income countries, but patients may,” he said.

The new prices would halve the cost of the drugs for better-off developing countries in Latin America and Asia and cut prices by 25 percent in poor countries, which were already paying lower prices, the foundation said. The second-line medicines will be bought with more than $100 million raised by a group of countries led by France. The improved first-line therapies will largely be financed by the Global Fund to Fight AIDS, Tuberculosis and Malaria and other donors.

Second-line drugs have typically cost about 10 times as much as first-line therapies. Costs have ballooned in Brazil and Thailand, which began programs to provide universal access to AIDS treatment years before African countries did, as patients have developed resistance to generic first-line treatments and have moved to brand-name second-line drugs.

The Clinton Foundation’s willingness to buy the generic drugs from the Indian manufacturers Cipla and Matrix will give developing countries leverage in bargaining with American companies for lower prices on branded antiretroviral drugs and may embolden some to follow Brazil and Thailand in overriding patents, AIDS activists said.

But developing countries still have reason to worry about retaliation from drug companies and trade sanctions by the United States. This year, Abbott Laboratories, based in Illinois, withdrew new drugs, including those for high blood pressure and AIDS, that it had planned to introduce in Thailand until the override on Abbott’s patent on the second-line drug, Kaletra.

United States trade officials last week put Thailand on a watch list for countries inadequately safeguarding the intellectual property rights of American companies, noting the overriding of drug patents.

Tido von Shoen-Angerer, who leads the campaign by Doctors Without Borders for access to medicines, said he was unsure whether the recent developments would encourage developing countries to exercise their rights under international trade rules more freely to make or import generic drugs.

“There’s a strong chilling effect from the U.S. action,” he said.

Drug company officials yesterday strongly defended their policies of charging better-off developing countries more for AIDS drugs than they did for poor countries, as well as the role of patents, which give inventor companies a monopoly on the sale of a drug, in stimulating the development of new drugs.

Jennifer Smoter, a spokeswoman for Abbott, said patents were needed “to ensure innovation in the future” but declined to respond to Mr. Clinton’s comment that “Abbott has been almost alone in its hard-line position here over what I consider to be a life and death matter.”

Abbott had been charging $2,200 annually per patient for Kaletra in middle-income developing countries, which include India, China, Brazil and Ukraine. Last month, it dropped the price to $1,000. The foundation’s new price for the generic is $695.

Jeffrey L. Sturchio, a vice president at Merck in New Jersey, says his company strives to balance providing the broadest possible access to AIDS drugs while maintaining financial incentives to attract companies to conduct research and development on new drugs.

Brazil and Thailand have overridden Merck’s patent on the AIDS drug efavirenz, an ingredient of the new, improved first-line AIDS therapies. Merck had been charging Brazil $577 annually per patient, a price it agreed to drop to $400 a year after Brazil said it was considering overriding the patent. The Clinton Foundation’s new price for the generic drug is $164.