Abbott offers price cut to thwart Thai compulsory license on Kaletra

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Abbott, the manufacturer of Kaletra, has offered to cut the price it charges the Thai public health system for the drug in a bid to dissuade the Thai government from pursuing a compulsory license that would allow a generic version to be imported from India. The announcement came last Friday in a joint statement from Abbott and the Thai Ministry of Public Health.

Kaletra is a fixed dose protease inhibitor combination containing lopinavir and ritonavir, and is recommended by the World Health Organization as a second-line drug.

According to the Xinhua news agency, Abbott has offered to cut the price of Kaletra from $347 a month to $167 a month, bringing the Thai price into line with the price at which Abbott currently offers to the drug to lower-middle-income countries (around $2200 a year).

Glossary

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.

representative sample

Studies aim to give information that will be applicable to a large group of people (e.g. adults with diagnosed HIV in the UK). Because it is impractical to conduct a study with such a large group, only a sub-group (a sample) takes part in a study. This isn’t a problem as long as the characteristics of the sample are similar to those of the wider group (e.g. in terms of age, gender, CD4 count and years since diagnosis).

bid

Abbreviation of a Latin term meaning twice daily.

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).

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.

Further negotiations will take place in one month; the Thai government is known to be looking for further savings. According to Medecins sans Frontieres, importing a generic version of Kaletra could reduce the cost to $120 a month and save $24 million a year, although the Thai government has made no statement on the price it expected to pay for a generic version.

The Abbott offer is the latest development in an increasingly aggressive strategy of cost containment being pursued by the Thai government, which began in November 2006 with the announcement of a compulsory license for import of a generic version of efavirenz, which is manufactured as Stocrin by Merck & Co.

On January 29th 2007 the Thai Ministry of Public Health announced that it would issue compulsory licenses for Kaletra and for Plavix, an anti-platelet medication that reduces the risk of unstable blood clots in people with heart disease.

In a letter to US congressional representatives, US Trade Representative Susan Schwab admitted that the Thai government was within its rights within the provisions of the 2001 Doha declaration to issue compulsory licenses “to address effectively significant public health emergencies,” but criticised the Thai government for failing to involve patent holders in negotiations prior to issuing compulsory licenses.

The failure to negotiate was also criticised by the incoming Director-General of the World Health Organization, Margaret Chan, who urged negotiation with the manufacturers.

However, critics of US government trade policy point out that the TRIPS agreement of 1994 does not require a public health emergency to be declared, and does not require the Thai government to negotiate with manufacturers before issuing a compulsory license if the use is not for profit.

Today Thailand’s Health Minister Mongkol na Songkhla told Reuters that Thailand was studying whether other compulsory licenses should be issued, and made clear that the Thai government saw the threat of compulsory licensing as a key means of forcing pharmaceutical companies to lower prices of antiretroviral drugs.

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