Select Committee on International Development Minutes of Evidence

Examination of Witnesses (Questions 380 - 399)



  380. How did you arrive at the preferential price?
  (Mr Cochrane) Essentially, and this comes on to the next question as well relating to the initiative we have now been leading with respect to the treatment of adults as well as of children, in terms of the pricing, because our pricing is very similar or identical for this new programme, these are our best prices. We believe we need to have a price which is sustainable and a programme which has to be sustainable. We cannot continue just to give drugs away because there are 25 million people in sub-Saharan Africa who are HIV-positive, and therefore we have to have a programme which is sustainable, which will stand the course of time, which is going to ultimately lead to an extended life for the individuals involved. You obviously do have to take these medications all of your life if you are HIV-positive as an adult. For a mother to child it is only three weeks, or it can even now with some drugs be down to one day. There is some very interesting work going on on another drug, not one of ours, which may show you just need to give a single dose to a mother and a single dose to the child when it is born, and that has been shown to reduce the level of infection quite radically.

  381. Do you accept that even with preferential pricing the Government of South Africa, for instance, claims that the programme remains unaffordable?
  (Mr Cochrane) In general, governments and countries who have got GDPs of the order of 500 dollars per head are not able to afford 2 dollars a day which, by great arithmetic, arrives at 700 dollars per annum. So the answer is, of course, those are unaffordable prices for the general population. If you look at the particular instance of South Africa and mother-to-child transmission, we are talking about a total cost of treating all mothers who are seen to be HIV-positive in their pregnancy to be of the order of £9 million, of which the drug cost would amount to about £2.7 million. If that is unaffordable from the South African Government's point of view, then I am sure there would be donor agencies who would be prepared to meet that.

  382. Glaxo Wellcome joined a new multisectoral collaboration with four other pharmaceutical companies, have the other four other companies yet agreed preferential prices for their drugs and have any retrovirals yet been purchased at preferential prices under these new initiatives?
  (Mr Cochrane) We made this announcement on May 11th and you have seen the joint statement of intent. All companies individually have had discussions with UNAIDS and the World Health Organisation on the individual pricing they are prepared to offer under these agreed schemes, but we must be very, very careful here in terms of competition law that we are not seen to be a club fixing prices. Therefore it is essentially very important that those discussions are between the United Nations and the individual company and are specifically to these programmes. We, in Glaxo Wellcome, announced our price in the public domain because we believed it was very important to move the debate on from a debate, "The pharmaceutical industry will pick up all the costs" to exactly this debate which you are coming to and saying, "Even at these prices, this needs to be a partnership programme". We need the first world involved in that partnership programme, we need individual companies involved, and we need the individual governments in sub-Saharan Africa particularly to be deeply involved in it.

  383. How does the preferential price under the May 2000 proposals compare with that previously announced for Retrovir back in 1998, as a percentage reduction from full price? Does that new price still provide a profit to Glaxo, or a loss, or does it represent either full or marginal cost?
  (Mr Cochrane) The new programme which we announced in May extends it not just to Retrovir but to two other drugs—to Epivir and to a combination of drugs called Combivir. The whole treatment of HIV, as I am sure you are aware, has evolved over the years from being single agents, as it was five or ten years ago, to now being combinations of agents. The gold standard is three or four drugs but two drugs together do indeed have some quite significant effect and are clearly better than a single drug by itself. What we have announced now in May of this year is extending our original programme from Retrovir to include these other two drugs. We have also announced this price which we have said is our best price. We believe it is at a substantial discount to the world market price, it is a discount of about 85 per cent to the world market price, and we believe that is a sustainable price, we believe it has to be sustainable so we can continue to manufacture, continue to supply for the lifetime of any individual who starts taking our medications.

  384. Can I just talk you through the way you recover the cost of your research? Obviously, part of the cost of drugs, wherever you sell them, will be needed to recover your often huge development costs. If you are selling more of these drugs, presumably the price can come down substantially, so are you going to be able to recover your development costs for these drugs within the timescale of your patent.
  (Mr Cochrane) In broad terms, we would be seeking to recover the investment in research and development through our sales in the United States, through our sales in Europe, and through our sales in sophisticated markets. The whole reason we have now got into this partnership is I think fairly simple to see, and you have heard it for the last two hours. We have a huge disease happening today in sub-Saharan Africa, 25 million people are affected by it, and as day follows night the vast majority of them will die. We have got drugs which do extend life, which would clearly help people in the quality of their lives and also the length of their lives. There is first world money in terms of World Bank, the World Health Organisation, the European Commission, the British Government, the American Government, and we surely should be able to broker something which will actually make sure the drugs got to the people who need them. That has been the essence of what has driven us in this partnership in May. It has not been in an effort to recover any money for research, it has not been in an effort to increase our profits, it has been in an effort to ensure that people who are suffering this terrible disease can have a longer and better life over the next X years.


  385. What worries me about that, Mr Cochrane, which I think is very laudable, is that if you are going to forgo so much of your recovery of the research and development through prices, will that not discourage you from undertaking further research in this area?
  (Mr Cochrane) Absolutely not, because our current sales in sub-Saharan Africa are extremely low; very, very low indeed. So if you charge—

  386. You mean for all your drugs?
  (Mr Cochrane) No, I was talking about HIV drugs. Our current off-take of HIV drugs is very, very low indeed. Why? Because, in essence, there is not the infrastructure in place to be able to treat those patients, there are no committed governments in place who really want to do something about it—and we have heard about that this morning as well—there is not a secure distribution in place to get the drugs into the patients. At the end of the day the sales of our HIV medicines in sub-Saharan Africa today are very, very low indeed. This programme is really designed to increase the access to our medications which, with committed governments, a secure distribution system, with decent medical infrastructure—nurses, doctors, on the ground—we could then get people living longer but it will not and should not have any effect on our research and development in this area.

  387. So you will recover that sufficiently from the developed countries' sales?
  (Mr Cochrane) In broad terms, yes.

  388. So you are doing it at marginal cost or something of that kind.

Mr Robathan

  389. This is not my specialist subject either. Anti-retroviral drugs—
  (Mr Cochrane) ARV.

  390. ARV drugs. We heard a lot earlier today, as you will know, about denial. Am I right in thinking these ARV drugs are no good once AIDS has developed? It is only when someone is still in the HIV-positive stage before the development of AIDS that they are effective?
  (Mr Cochrane) The earlier you take these drugs, the better. In fact you should take them as soon as you are infected, as soon as you know you are infected, because you will maintain your immune system for longer the earlier you take them. That is not to say that it is not worth taking them at the end stage. If you go back ten or 20 years, when this virus was first investigated, there was a huge amount of debate and doubt as to whether these medications actually worked. Why? Because they were giving them to terminally ill patients who were going to be dying within weeks or days, and people thought, "They are going to cure me if I take them two or three days before I am going to die." The answer is, of course, it is too late at that point, your immune system is completely wrecked and they have little or no effect. So the simple answer is that the sooner you take them the better. They still can have some effect, even when you are showing symptoms of the disease, they can prolong your life, there is plenty of good clinical trial data which shows that, but they will have less beneficial effect than they would if you had taken them earlier.

  391. Having heard about this denial and people refusing to be tested even, is it not difficult to get the drugs to the people who need them because they may be positive but are unwilling to accept that?
  (Mr Cochrane) It is difficult but it is a challenge which I think we now should be facing and we should now be acting together in partnership to try and do something about it. That is where we are.

  Chairman: Incentivise people getting HIV tested. We want to come on to the vaccine now.

Mr Jones

  392. The International AIDS Vaccine Initiative recommends that a radical distinction be made "from the outset between the prices charged [for drugs] in different markets." What they are saying is that this should be centred on tiered pricing where the poorest countries pay only the marginal cost of producing the vaccines, and the richer countries' populations bear the full cost of research and development. What do you think about that recommendation?
  (Mr Cochrane) Broadly in agreement.
  (Mr Walker) The whole point about the IAVI's approach to the development of vaccines is to be honest and up-front about the intellectual property issues which have so complicated debates around making access to treatments available. The way IAVI has done that is, when working with private sector companies but also with educational facilities and so on, to form a number of vaccine partnerships which they have put together which generally link science in the north with science in the south, bringing together investment to speed up the research process. But those partnerships from the very beginning have made clear, and IAVI makes clear in all its relationships with these partnerships, that their aim is to provide a vaccine which is safe, effective and affordable in the majority world where it is most needed. The approach has been to provide and agree quite innovative intellectual property agreements from the outset which suggest that IAVI will be able to make available those vaccines when they are available at a no more than cost plus 10 per cent in majority world countries, although agreeing with private sector companies that those vaccines can be made available at whatever rate they wish to charge in the richer north. From the discussion earlier, I think it is important to say that something like 95 per cent of pharmaceutical sales in the world are accounted for by America, Europe, Japan, Australia, and really in terms of recouping R&D costs the third world—Africa, Asia—has not really been factored in previously, and yet there are still stand-offs because of the sensitivities around the intellectual property which have complicated the debates we had today. So moving those things into the open and discussing them from the outset I think is definitely a step forward, and I think the work IAVI has done in that area is certainly beginning to be echoed in other areas around treatments and other technologies as well.


  393. But you will also be aware of the fierce arguments about pricing of drugs which goes on throughout the developed world by pharmaceutical companies and governments, so it is matter of negotiation.
  (Mr Cochrane) It certainly is.

Mr Worthington

  394. Can I ask a general question before getting on to the effectiveness of health systems? Something which puzzles me in terms of fighting against AIDS is the emphasis upon the male condom as a way of preventing it, and then we go into all the expensive drugs and so on. What research has been done which is female-centred, protecting women? We hardly ever hear mention of the female condom where we go, they are not available. Is this because of unacceptability? Is any research being done on any other barrier methods which would be female-centred rather than male-centred?
  (Mr Cochrane) I am the wrong person to ask that question of because—

  395. Where is this person?
  (Mr Cochrane) You would need to talk to condom manufacturers presumably and ask them.

  396. I am not really just asking about condoms. There are enormous disadvantages about the male condom from the female view-point.
  (Mr Cochrane) Sure. Prevention is the most cost effective method. How do you prevent this virus entering the body. It enters the body via fluid-to-fluid transmission, so blood transmission, semen transmission. That is how it enters. If you want to prevent it, you have to be doing things to prevent that happening, and one of the most effective ways is the male condom. I take your point too, there are many other ways of doing it as well, but I do not know and I am not the right person to ask about what research is happening in terms of female preventative measures which could be effective.
  (Mr Walker) I think the important thing about prevention is to say that a range of measures needs to be taken, and that can go from barrier methods, such as the condom or the female condom, through to things like microbicides, which it is generally agreed are a more female-centred approach, through to of course vaccines which do not impede sexual behaviour. But all of those things are technologies which need to be situated in an enabling environment. One of the problems with the male condom is that women often have difficulty in persuading their male partners to use the male condom. The reason that the female condom is therefore thought to be more acceptable often is that women have more control over the female condom, although I am not sure that is always going to be the case in that it is not an invisible barrier method which women are going to control in all situations. So you need to work on providing methods but you also need to provide the human rights basis in which—

  397. What about microbicides?
  (Mr Walker) I think they are important. There is limited research on microbicides at the moment. Unfortunately, one of the larger scale trials on nonoxynol-9, which is a microbicide which provides some protection in the lab, has been shown to not provide the protection in practice. But as a technology which would be cheap to deliver, cheap to manufacture and would be more female-centred, microbicides provide something which should be explored.

   Chairman: It would not be fool-proof, would it?

Mr Worthington

  398. I find this difficult to understand. You say there are advantages to it, yet we have these huge cost drugs which are being presented as the answer, which is of enormous advantage to the pharmaceutical companies, how much research is going into a cheaper prevention?
  (Mr Walker) I do not have the figures for microbicides but in terms of the World Bank figure from last year, the total money which was put into vaccine research was in the order of 300 million dollars. You can compare that to the money that pharmaceutical companies put into research on treatment, which is more in the range of around 2 billion dollars.[4] One problem in terms of looking necessarily to the private sector to do some of the preventative work is that the pay-off in the long-term is less attractive. With treatments, you have an on-going take-up, you have an on-going need for those products which generates profits, obviously, and that is where partnerships need to come into play, that is where you need to involve the World Bank, you need to involve DFID, the private sector in other ways and utilise some of their expertise if not some of their initial drive towards research in different areas. One of the things I would say about treatment is the other element of prevention, and all the studies—and UNAIDS has just produced a document called Global Strategy Framework around HIV which it is consulting on at the moment—make clear that one of the crucial things in any preventative strategy is to involve people living with HIV. If you do not mitigate the impact of HIV on people themselves who are already infected, you are going to have a great deal of difficulty in slowing the transmission, because you always need someone with HIV in order for there to be transmission and if these people have no support, no ability to be open about their status, no access to care and treatment, they are really factored out of the equation. So we do need some kind of provision for people with HIV, we do need a range of different prevention mechanisms.

  399. I am not quarrelling with that at all, of course you do, what I am saying is that I have not picked up a sense of urgency about looking for more female-centred prevention measures.
  (Mr Walker) If I can come back to that, this is the very reason IAVI was set up. IAVI was set up in 1996 to speed up the development of a vaccine which would be safe and effective and usable in majority world countries. Crucially it has a three-pronged approach. It wants to build the width and the breadth of current research by both funding a range of different interventions and studies itself, but also by leveraging greater input from the private sector, from governments, from a range of other players. It is interesting that the National Institutes for Health in America has just announced a major programme of vaccine research development which mirrors IAVI's approach—I think they announced it yesterday—which is doing work in Australia. So first it looks at that broadening of the research pipeline. We have already talked about intellectual property issues but how are you going to deliver a vaccine, how are you going to be able to purchase the vaccine for use in majority world countries? All of those things need to be planned now as well. In terms of whether the world has woken up to the need for these broader preventative approaches, I think it has been very slow, and the partnerships we are talking about are only now beginning to coalesce. So there is beginning to be some momentum and there are some good models now available showing how to work together. We need to be scaling those up and making sure that the initial investment that governments like Britain through DFID has made are followed through and that we will then see some parallel development—microbicides, vaccines, human rights approaches and treatment and care packages for people already infected.
  (Mr Cochrane) Can I make one point there? We have to remember that vaccines are hugely important but they will be no help at all for anybody who is HIV infected today. All they will do is prevent future infections and on any timescale we are talking about a minimum of five years before we get a vaccine, maybe longer than that. So we almost have to look at the two issues separately. Yes, we have to find vaccines, better prevention methods, which are going to help five to ten years from now, the next generation, but we have a big issue of the 25-plus million, whatever it is, today who will not be touched by vaccines.

4   Note by witness: "Accelerating an Aids Vaccine for Developing Countries: Recommendations for the World Bank" by Martha Ainsworth and Amie Batson. Co-chairs: World Bank Vaccine Task Force, February 2000. Back

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