NGO Response to Abbott’s announced $1000 price for Aluvia
in Low- and Lower-Middle Income Countries
April 10, 2007
Health GAP, Student Global AIDS Campaign, American Medical Student
Association, and Essential Action applaud that Thailand’s compulsory
license, generic competition, WHO intervention, and activist pressure have
forced Abbott to offer a further 55% reduction in its tiered price for low-
and lower-middle income countries. However, as clarified further below,
the price discounts still do not go deep enough or wide enough, and Abbott
has still withdraw Aluvia and six other medicines from the Thai
registration process in retaliation for Thailand’s lawful exercise of its
right to issue compulsory licenses for priority medicines for government,
non-commercial use.
Abbott’s new price announcement confirms the importance of generic
competition and the necessity of using compulsory licenses to curb
abuses of monopoly power by pharmaceutical companies. Abbott’s
price-discount announcement is mostly due to: (1) Cipla’s recent
announcement (April 1, 2007) to undercut Abbott’s price and offer
Aluvia at $1560/pppy, (2) Thailand’s decision to issue a compulsory
license in response to the unaffordable price charged by Abbott in
Thailand other low- and lower-middle-income countries of $2200/pppy,
and (3) increased civil society and political pressure exerted upon
the company in the last four weeks following its decision to
de-register seven medicines from the Thai market.
Abbott has not yet agreed to reverse its illegal and unethical
withdrawal of seven registration applications from the Thai drug
regulatory process, including the application for Aluvia, the
heat-stable form of Kaletra that is most appropriate for use in a
tropical country like Thailand. Abbott may have violated Thailand’s
competition law by withdrawing these products; it has certainly
violated patients’ human right of access to essential life-saving
medicines.
Although this price is lower than what has been currently offered by
generic manufacturers, it is still twice the access price of the
medicine(s) in least-developed and African countries ($500/pppy), and
will exert a heavy financial burden upon low-income and lower-middle
income countries seeking to achieve universal access and treatment.
Abbott should provide Kaletra/Aluvia at one, no-profit price to all
developing countries.
Although Abbott’s price is temporarily lower than the price offered
by generic manufacturers, it is highly likely that generic prices
will drop below $1000/pppy as an increasing number of patients
require 2nd line anti-retrovirals, as generic producers reach
economies-of-scale, and as generic versions of Aluvia are WHO
pre-qualified and are thus purchasable with Global Fund money.
Abbott’s price discount to Thailand, like its prior discount to
Brazil, is primarily designed to reduce market demand that might
incentivize efficient generic production.
Abbott must not be permitted to blackmail Thailand into withdrawing
any compulsory licenses in exchange for a promise to renew its
registration application for Aluvia. Thailand’s decision to issue
compulsory licenses was fully consistent with World Trade
Organization intellectual property rules and obligations and with
Thai law. Likewise, the Ministry of Health should not be forced to
withdraw its compulsory licenses for efavirenz or Plavix.
Even if Abbott is offering a lower price for Kaletra/Aluvia, it does
not necessarily mean that Thailand should withdraw, or not execute,
its government use license. There are strong reasons that Thailand
may wish to keep its compulsory license to ensure alternative sources
of supply, to develop and support domestic and/or regional
pharmaceutical capacity, to incentivize generic competition, and to
subsequently procure lower-priced generic versions that are
WHO-prequalified and registered in Thailand.
Thailand should only purchase Kaletra/Aluvia from Abbott to ensure
no-stock outs and reliable access across the country, and should not
enter into any long-term, binding contract that would make Abbott the
country’s sole supplier for multiple years and preclude future
use/access of generic versions. A prior decision by the Brazilian
government to enter into a long-term contract with Abbott for
Kaletra/Aluvia has exerted a severe financial burden upon the
National AIDS treatment program, and the Brazilian government now
pays a price of $1596/pppy that is 60% higher than Abbott’s new $1000
price.
The World Health Organization should be staunchly defending and
supporting Thailand’s decision to issue a compulsory license, and
should be providing technical support and assistance to the Thai and
other governments to enforce and implement compulsory licenses.
Any price negotiations conducted by the WHO should be done alongside
and through national governments, and not done secretly with
pharmaceutical companies. Any price negotiations or transactions
with the pharmaceutical industry should be open, transparent and
inclusive to avoid any appearance of impropriety or undue influence
of the pharmaceutical industry upon the UN body.
Sponsors of this statement are seeking additional sign-ons. Contact Brook
Baker: b.baker@neu.edu 617-373-3217.
