Abbott announces Kaletra price cut for lower middle-income countries, makes new offer to Thailand

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Abbott announced today that it will cut the price of Kaletra (lopinavir/ritonavir) in 40 lower middle-income countries to $1000 a year following discussions with World Health Organization Director-General Margaret Chan. It also made a new price offer to the Thai government, which has been planning a compulsory license in order to import generic lopinavir/ritonavir.

Abbott has been strongly criticised for its pricing of Kaletra in lower middle-income countries. Although the drug has been offered at $500 a year in sub-Saharan African countries and lower income countries in Asia, the drug was previously offered at a cost of $2200 a year in lower middle-income countries.

“This price is lower than any generic price available in the world today for this medicine and is approximately 55 percent less than the average current price for these countries,” the company said today in a press statement.

Glossary

middle income countries

The World Bank classifies countries according to their income: low, lower-middle, upper-middle and high. There are around 50 lower-middle income countries (mostly in Africa and Asia) and around 60 upper-middle income countries (in Africa, Eastern Europe, Asia, Latin America and the Caribbean).

generic

In relation to medicines, a drug manufactured and sold without a brand name, in situations where the original manufacturer’s patent has expired or is not enforced. Generic drugs contain the same active ingredients as branded drugs, and have comparable strength, safety, efficacy and quality.

Food and Drug Administration (FDA)

Regulatory agency that evaluates and approves medicines and medical devices for safety and efficacy in the United States. The FDA regulates over-the-counter and prescription drugs, including generic drugs. The European Medicines Agency performs a similar role in the European Union.

second-line treatment

The second preferred therapy for a particular condition, used after first-line treatment fails or if a person cannot tolerate first-line drugs.

Countries that qualify for the new discounted price are:

  • Asia/Pacific: China, Fiji, India, Indonesia, Marshall Islands, Micronesia, Mongolia, Pakistan, Papua-New Guinea, Philippines, Sri Lanka, Thailand, Tonga, Vietnam.
  • Central Asia and CIS: Armenia, Azerbaijan, Belarus, Georgia, Jordan, Kazakhstan, Kyrgyzstan, Moldova, Syria, Tajikistan, Turkmenistan, Ukraine, Uzbekistan.
  • Eastern Europe: Albania, Bosnia and Herzegovina, Serbia and Montenegro, The FYR-Macedonia.
  • Latin America and Carribean: Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Jamaica, Nicaragua, Paraguay, Peru, Suriname.

Abbott said that its decision to cut the price for middle-income countries had come after WHO director-general Margaret Chan approached the company “to discuss how to improve affordability and access while maintaining incentives to support developing new medicines”.

A spokesperson for WHO told aidsmap that the approach by WHO had been made after the Thai compulsory license was first proposed, “given the recognition that we need to increase access to second-line therapies, and to Kaletra in particular. There have been lots of careful discussions to reach this conclusion.”

However, Abbott’s action appears to some observers to represent a robust attempt to outflank the Thai government’s threat to its intellectual property rights and so head off similar compulsory licensing actions in other middle-income countries, especially Brazil.

WHO has been under pressure from advocacy organisations to take a strong line with Abbott over its pricing policy and its reaction to the Thai government’s decision to issue a compulsory license for Kaletra.

Margaret Chan drew criticism earlier this year after she was reported to have expressed concern about the disruption of the balance between compulsory licensing and the intellectual property rights of pharmaceutical companies. The WHO director-general later told the Thai government that WHO supported Thailand’s right to issue compulsory licenses.

However, in a press release issued today, Abbott stated: “Abbott and World Health Organization (WHO) Director-General, Margaret Chan, have agreed on a balanced approach to provide Kaletra/Aluvia (lopinavir/ritonavir) capsules and tablets to more patients in the developing world, while supporting continued long-term biopharmaceutical research and development.”

“Abbott is taking this action in order to further increase access and address the debate around pricing of HIV medicines: by increasing affordability while preserving the system that enables the discovery of new medicines. The patents of scientists and inventors must exist so that there are incentives for sustained research and development.

Without this system, the miracle drugs the world enjoys today, including HIV medicines, would not exist.”

“Specifically, with regard to Thailand, Abbott appreciates and fully respects the suggestion of Director-General Chan that more work needs to be done with the government of Thailand to achieve a positive outcome.”

Abbott said today that the company “will immediately begin discussions with individual countries where Abbott’s patents are respected to maximize the number of patients that can be provided Kaletra/Aluvia capsules and tablets at this new price,” a clear warning to the Thai government that the price reduction will only be available if compulsory licensing of Kaletra is abandoned.

The company had previously withdrawn a license application for heat stable lopinavir/ritonavir tablets (Aluvia), saying that it would not introduce new medicines in Thailand while the Thai government continued with its compulsory licensing policy.

Associated Press reported today that Abbott had offered to lower its price Kaletra from 5,938 baht (US$181) per patient per month to 3,488.20 baht (US$107) per patient per month in Thailand, “which could end up being cheaper than its generic version," according to Dr. Siriwat Tiptaradol, secretary-general of Thailand's Food and Drug Administration.

"Abbott did not say that they wanted us to revoke the compulsory license. There was no condition. They were just here to offer the price reduction so that people can have access to their medicines," Dr. Suchart Chongprasert, another Thai FDA official, told The Associated Press.

Abbott’s offer substantially undercuts the price of $1440 per year that the Thai government hoped to pay for a generic version of the drug, and is a large discount on the price offered just two months ago ($167 per month).