Colombian Ministry of Health Will Not Issue Compulsory License for Important Antiretroviral Medicine
Peter Maybarduk, Essential Action
June 3, 2009
The Colombian ministry of health has decided not to declare access to HIV/AIDS medicine lopinavir + ritonavir 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 Abbott's Kaletra.
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.
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 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.
We've heard no official word as to whether Abbott has agreed to sell 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.
Below, I've pasted a Scrip News article (in English) on the ministry's decision. Note the Scrip article states, "INVIMA, the medicines regulator, rejected applications from Ranbaxy and Focus Pharmaceuticals to register generic versions of the combination product." It's worth mentioning INVIMA stated its reason for keeping the generics off the market was Abbott's claimed patent. But Colombia has no linkage provision in its law – marketing approval in Colombia should, by law, be a pure assessment of safety and efficacy, separate from any private patent disputes. The pharmaceutical industry's monopoly politics are touching an agency where they do not belong.
The Colombian civil society groups' analysis and press release (in Spanish) can be found here:
An archive of articles on the compulsory licensing request (in Spanish) can be found here:
Previous Essential Action statements on the Colombia case are available here, here, here, and here.
We have on file the Colombian health ministry's decision (Resolución 001444) and a number of other documents relevant to the license request. We will look into posting these online. In the interim, please contact us to obtain documents, and with any questions.
Colombia says no to Kaletra compulsory licence
01 June 2009
The Colombian government will not be declaring Abbott's antiretroviral Kaletra (lopinavir plus ritonavir) to be of public interest, leaving the patent on the product intact until 2016. Civil society has accused the government of putting politics first.
The decision comes soon after the government set a price ceiling for Kaletra (scripnews.com, May 13th, 2009). NGOs had been pushing for the government to declare the drug to be of public interest and to issue a compulsory licence, claiming that Kaletra's high price barred access to the drug (scripnews.com, July 29th, 2009).However, the government rejected this, largely on the grounds that all patients who required Kaletra were covered by some sort of health insurance and did not have to pay for the medicine. This was also one of the main arguments put forward by Abbott, according to the government in its justification for the decision.
Antiretrovirals (ARVs) are included on Colombia's essential medicines list, and all health insurers – public and private – must offer these drugs. However, in Colombia there is no single ARV purchaser and different public and private institutions compete within the national health system. This leads to wide price discrepancies throughout the country, say civil society organisations.
The cost of the drug creates barriers to access, while having health insurance does not automatically give access to the ARV, maintains RECOLVIH, which represents the organisations petitioning for a compulsory licence. For example, problems arise when HIV/AIDS patients lose their jobs and also when there are delays in provision. The high level of stigma and bureaucracy involved in accessing ARVs can also deter patients from following their regime.
The government also went on to say that the main problems hindering access were to do with failures within the health system, including reaching vulnerable populations or providing adequate diagnosis. Such issues did not merit declaring the drug to be of public interest, it said.
Added to this, the financial impact of declaring the drug to be of public interest was unclear and difficult to calculate, the government said. However, this was poor reasoning, Peter Maybadurk, a spokesperson for the NGO Essential Action, told Scrip. "The government has decided not to save more money, but to protect Abbott's monopoly," he said. Although RECOLVIH estimates that the price ceiling will save the government around $10 million each year, greater savings could have been made through introducing competition, he said. "Competition could lead to even lower prices, which could free up more resources to eliminate other barriers," he added. RECOLVIH accuses the government of ignoring societal needs and basing its decision on politics. Colombia is in the middle of negotiating a free trade agreement with the EU, alongside Peru and Ecuador. It is also waiting for the US to ratify a bilateral FTA.
Moreover, the civil society groups behind the move were not given the chance to participate in the process, said Mr Maybadurk. "During the whole process, which began a year ago, the government never allowed HIV/AIDS patients to participate in the negotiation process to arrive at the price recently negotiated," says RECOLVIH. Abbott's involvement in the process is unclear.
Abbott declined to comment.Kaletra is patented in Colombia until December 2016. INVIMA, the medicines regulator, rejected applications from Ranbaxy and Focus Pharmaceuticals to register generic versions of the combination product.