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ASHM Report Back
Clinical posts from members and guests of the Australasian Society for HIV, Viral Hepatitis and Sexual Health Medicine (ASHM) from various international medical and scientific conferences on HIV, AIDS, viral hepatitis, and sexual health.
The production costs of generic DAAs
One of the highlights of the first day of the Glasgow 2016 HIV Drug Congress was a brilliant presentation by Dr Andrew Hill of St Stephen’s AIDS Trust in London on the cost of novel direct-acting antivirals (DAAs) for chronic hepatitis C (HCV). His group extracted data from an online database of Indian export ledgers for per-kilogram prices and volumes of DAA active pharmaceutical ingredients (APIs) exported from India over Jan-Jun 2016. Generic DAAs are being produced by manufacturers in India and a limited number of other countries under voluntary licences offered by Gilead, the originator company of Sofosbuvir; however, these countries only represent 50% of the worldwide epidemic and current high prices elsewhere limit access to DAAs both globally and in high-income countries.
Dr Hill and his research team combined the cost of per-pill API requirements with estimated costs for formulation and excipients and packaging, and finally a profit margin of 50% was added to estimate a price at which generic producers could profitably enter the market.
Their graphs of cost per kilogram of DAAs showed that production costs for these medications have been falling rapidly since 2015. The difference between generic production costs and the current price paid for non-generic DAAs in developed countries is enormous. For example, 12 week treatments of sofosbuvir can currently be manufactured for $62, sofosbuvir+ledipasvir $96, daclatasvir $14, sofosbuvir+velpatasvir $181-216. These prices include the estimated 50% profit margin for generic suppliers. In contrast, the cost of a 12 week course of sofosbuvir available via the non-generic manufacturer in the US is $49,860 – 84,000; of daclatasvir is over $50,000; of sofosbuvir+ledipasvir is $56,700 – 94,500; and of sofosbuvir+velpatasvir is $74,760.
Dr Hill made the point that the estimated generic prices for DAAs are comparable to those that allowed massive treatment scale-up in HIV/AIDs. He also commented that governments are often unaware of the degree of mark-up being charged on medications they are purchasing, although this information is in fact available via the methods his study team used. He stated that the common reaction to talk of these huge profit margins was that pharmaceutical companies need the money to invest in further research and development: his response was to state that Gilead, for example, posted a profit of over 10 billion dollars in the past year, and to pose the question: exactly how much money do such companies need to make to fund further research and development?