An AIDS Drug Feud

[Guest guest]

An Aids Drug Feud

Indian generic pharmaceutical manufacturer CIPLA is under attack for its prices

in India Jean-François Tremblay

September 24, 2007 Volume 85, Number 39 pp. 66-68

A curious feud has broken out between Cipla, an Indian generic drugmaker that is

the leading supplier of AIDS drugs to international agencies, and the AIDS

Healthcare Foundation (AHF), a U.S.-based nongovernmental organization (NGO)

that operates a network of AIDS clinics and campaigns worldwide for more

affordable AIDS drugs.

In ads printed in leading Indian newspapers last month, AHF accused Cipla of

selling one of its AIDS drugs in India for twice the price Cipla sells it in

Africa. The drug in question, Viraday, is a once-a-day cocktail of three

antiretroviral (ARV) drugs. One of the drugs in the formulation is tenofovir

disoproxil fumarate, a compound invented by Gilead Sciences that is protected by

patents in many countries but not in India.

Cipla because it's the largest supplier of antiretroviral drugs, " says

Chinkholal Thangsing, head of AHF's Asia-Pacific bureau in New Delhi. AHF may

attack other Indian generics producers in the future, Thangsing says, but it

started with Cipla because " we can't go after many targets all at once. "

Founded in Los Angeles in 1987, AHF has the motto, " Fight for the Living and

Care for the Dying. " It has repeatedly sued leading pharmaceutical companies

around the world to force them to lower prices on their ARV drugs. AHF claims to

be the largest AIDS organization in the U.S. According to its annual report, it

operates 24 outpatient centers and pharmacies in the U.S. as well as 39 health

care centers in developing countries, including India.

Cipla is probably most famous for its offer in February 2001 to sell a cocktail

of ARV drugs to humanitarian organizations for less than $1.00 per patient per

day. This groundbreaking action led to a flurry of initiatives by major drug

companies to lower the prices of their ARV drugs in developing countries.

Today, in terms of the number of treatments it produces, Cipla is the world's

largest supplier of ARV drugs. It is notably a leading supplier to the

J. Clinton Foundation, which buys Cipla drugs for distribution in developing

countries. After Bill Clinton visited a Cipla plant in India last year, he

commented that " Cipla's commitment to the expansion of care and treatment for

people living with HIV/AIDS in the developing world is commendable. "

Another major buyer of Cipla's ARV drugs is Doctors Without Borders (DWB). The

group publishes an annual guidebook describing the various AIDS treatments

available worldwide and the prices at which they are sold. AHF used the

information in this guidebook to attack Cipla's pricing policy in India. Tido

von Schoen-Angerer, the director of DWB's medicine campaign, tells C & EN that

he's perplexed by AHF's attack on Cipla. Although Cipla did provide DWB with a

quotation for selling Viraday in Africa, he says the company has, so far, only

sold the product in India.

A drug can be sold at all sorts of prices, von Schoen-Angerer notes.

Cipla, for example, adjusts its prices according to where a country sits in the

United Nations Human Development Index. India ranks as a country that enjoys

" medium " development, whereas many African countries are ranked as " low. " In

addition, von Schoen-Angerer says, groups that buy AIDS drugs for Africa tend to

do so in huge quantities that may trigger a volume discount. Within India

itself, he believes, drug companies sell at different prices to government

hospitals, private hospitals, and NGOs.

AHF's Thangsing responds that whether or not Cipla actually sells Viraday in

Africa is immaterial. The price that Cipla quoted to DWB is evidence of how low

it can go. Thangsing says he'd like to see more clarity in Cipla's pricing

policy. He adds that quantity discounts can be achieved in India merely by

forming a buyers' group of several NGOs.

Thangsing says he does not know what price Indian public hospitals pay for the

drugs they buy from Cipla. The government provides treatment for about half of

India's AIDS patients. But he says it is obvious that Cipla charges

conspicuously less when it exports to Africa than when it sells in India, even

if quantity discounts in African orders are considered.

The Indian government has found some merit in AHF's allegations, which are being

investigated by the Monopolies & Restrictive Trade Practice Commission.

When it put up its attack ads last month, AHF claimed it was endorsed by many

Indian NGOs. One of the organizations cited is the New Delhi-based Love Life

Society, a group that provides assistance to HIV-positive people.

Its director, Francisco X. de Melo, tells C & EN that he has a staff of five

people and the help of 25 volunteers. The NGO has offices in hospitals and

provides counseling services to illiterate AIDS patients in Delhi who have

difficulty keeping up with the requirements of their drug regimens.

According to de Melo, many poor patients cannot afford Cipla's medicines,

because the government does not provide enough support.

Viraday, in particular, is a so-called second-line treatment that is not covered

by government programs. As a result, de Melo says, he strongly supports AHF's

campaign against Cipla.

Positive Women Network (PWN) is another group that is cited in AHF's ad as

endorsing the campaign against Cipla. The NGO, based in the southern city of

Chennai, provides support to HIV-positive Indian women and their children.

PWN Director Kousalya Periasamy tells C & EN that her group did not endorse AHF's

campaign and that its name appears in the ad by error.

She says she asked AHF not to include her group's name, but AHF responded that

the ad had already gone to print. She adds that her group was formed with

Cipla's financial help and that it still gets drugs from Cipla at reduced

prices. " I told AHF that if they want to be against Cipla, I want nothing to do

with this, " she says.

Cipla has been outraged by AHF's campaign. Unidentified company executives told

India's Economic Times newspaper that AHF is influenced by multinational drug

companies. Cipla, opposed to the strengthening of pharmaceutical patent laws in

India, has long been the bane of the multinationals. The paper further reported

that AHF's treasurer, Gregg H. Alton, is also a senior vice president and

general counsel at Gilead.

Gilead executives do have valid reasons to be ill-disposed toward Cipla. Whereas

11 Indian drug companies have agreed to pay a royalty to Gilead for the rights

to manufacture tenofovir, Cipla filed a petition in February demanding that

tenofovir not be granted patent protection in India, arguing that the drug lacks

novelty.

The suggestion that its agenda is controlled by major drug companies has, in

turn, infuriated AHF. Thangsing tells C & EN that it's an attempt by Cipla to

divert attention from the fundamental issue of the price differential between

the drugs it sells in Africa and India. In a statement in defense of its own

integrity, AHF said, " It is not for sale to anyone, at any price. " The statement

also refers to legal actions the group had undertaken against various

pharmaceutical companies. AHF's statement also noted that it opposes Gilead's

request for patent protection for tenofovir in India.

Further illustrating AHF's divergence from the agenda of most major drug

companies, AHF Communications Director Ged Kenslea tells C & EN that the group

opposes " the pursuit of patents for lifesaving medicines by pharmaceutical

companies in developing countries. " AHF, he adds, supports the rights of

countries to ignore drug patents when it is " necessary to protect public

health. "

As to why Alton, AHF's treasurer, also holds a senior position at Gilead,

Kenslea explains that he serves as a volunteer member of AHF's board of

directors. " AHF values the experience that he brings to the table and his

oftentimes different, but welcomed, perspective as we try to navigate improving

and expanding the availability of antiretroviral treatment globally, " Kenslea

says.

Yusuf K. Hamied, Cipla's chairman, declined to provide comments for this

article. During a short telephone conversation with C & EN, he said it would not

be appropriate for him to talk to the media because his company is preparing to

sue AHF for damage to its reputation. AHF has confirmed that Cipla has

threatened to sue it for $25 million.

With India's antitrust commission investigating AHF's allegations and Cipla

apparently intent on suing AHF for making those claims in the first place, the

feud between the two organizations will likely remain in the public eye for

several more months. It's an odd battle for two natural allies in the fight

against AIDS.

http://pubs.acs.org/cen/currentissue.html