Examination of Witnesses (Questions 380
- 399)
THURSDAY 29 JUNE 2000
MR JAMES
COCHRANE AND
MR SAUL
WALKER
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.
Chairman
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.
Chairman
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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