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Luis Sagaon Teyssier ; Yves Arrighi; Boniface Dongmo Nguimfack; Jean-Paul Moatti

Affordability of HIV/AIDS treatment in developing countries: modeling ARV drug price determinants for a better understanding of the market functioning. Luis Sagaon Teyssier ; Yves Arrighi; Boniface Dongmo Nguimfack; Jean-Paul Moatti. Aknowledgements.

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Luis Sagaon Teyssier ; Yves Arrighi; Boniface Dongmo Nguimfack; Jean-Paul Moatti

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  1. Affordability of HIV/AIDS treatment in developing countries: modeling ARV drug price determinants for a better understanding of the market functioning Luis SagaonTeyssier; Yves Arrighi; Boniface Dongmo Nguimfack; Jean-Paul Moatti

  2. Aknowledgements This study is part of a project funded by UNITAID and developed by: The French National Agency for Research on AIDS and viral Hepatitis (ANRS-SESSTIM) AIDS Medicines and Diagnostics Service (AMDS/WHO)

  3. Objectives • To investigate in which extent originator and generic prices react differently to the same factors • To study the evolution of prices through the life-cycle of patents • Originator drugs • Generic drugs produced under license and/or taking advantage of TRIPS flexibilities

  4. Data • Global Price Reporting Mechanism (AMDS/WHO) http://apps.who.int/hiv/amds/price/hdd/ • Period of analysis: 2003-2012 • 30.904 transactions of Adult ARVs • 126 countries • 21 ARVs ; 15 FDC/Co-blisters (57 formulations) • 12 Sources providing information on transactions: • Global Fund (35.8%); SCMS (22.1%); UNICEF (14.3%); UNITAID (7.3%); IDA (9.7%); PEPFAR (5.6%); Mission Pharma (2.5%); CHAI (1.1%); JSI (0.4%); WHO/CPS (0.4%); MSH (0.4%); WHO (0.4%)

  5. ARV market structure • Demand-side • Donor funded ARV transactions (80%) • Supply-side • Originator segment • 8 manufacturers • 21 single and 6 co-formulations • Production: 30.5% in USA; 19.3 UK; 12.2 NL; 10.1 FR • Generic segment • 25 manufacturers • 15 single. 11 co-formulations. and 4 co-blisters • Production: 92% in India

  6. Methods: Price descriptives & OLS Econometric analysis of price determinants: • Dependent:price of patient-year treatment log(PYD) • Explanatory: • Year & Geographical group dummies • Purchased quantity of yearly doses: log(QYD) • Formulation type (single=ref., co-blister, FDC) • Target group (pediatric=1. adult=0) • Number of observed suppliers • Present in 1st line (yes=1, no=0) • Segment(originator=1, generic=0) • Gross National Income per capita (World Bank): log(GNIpc) • Drug age since FDA approval • Expiration of the reference patent (Medicines Patent Pool)

  7. RESULTS

  8. Quantities: procurement of generic yearly treatments by region Generic segment controlled by only 6 manufacturers (out of 25)

  9. Prices: ARVs recommended in 1st line by region

  10. Prices: ARVs recommended in 2nd line by region

  11. Multivariate analysis TIME TREND (ref: 2011-2012) Significant at: ***1%; **5%; *10%; Ad-R²=49,6%

  12. Multivariate analysis TIME TREND (ref: 2011-2012) REGIONS (ref: Sub-SaharanAfrica) Significant at: ***1%; **5%; *10%; Ad-R²=49,6%

  13. Multivariate analysis TIME TREND (ref: 2011-2012) REGIONS (ref: Sub-SaharanAfrica) Originator prices are 60%(p< 0.001) higher than generics Significant at: ***1%; **5%; *10%; Ad-R²=49,6%

  14. Multivariate analysis by segment Stratified estimation fits better the data (F-test=79.2 > 1.6) REGIONS (ref: Sub-SaharanAfrica) Significant at: ***1%; **5%; *10%, Ad-R²(originator)=39.3%; Ad-R²(generic)=34.6%

  15. Multivariate analysis by segment • Other significant differences: • Price differential in the generic segment according to the economic situation of the countries: 10% increase in the GNIpc is at the origin of an price increase of 0.7% • Originator prices are more sensitive to the presence of an additional supplier in the market: prices decrease in average 3.6%, while the decrease of generic prices is 2% • Generic 1st line drugs are 109% cheaper than generic 2nd line drugs; while originator 1st line drugs are only 81% cheaper than originator 2nd line drugs. • Originator drugs for potential 3rd line are 54% more expensive than originator 2nd line drugs.

  16. Price differentials through patent life cycle Ref: purchase the same year of patent expiration

  17. Price differentials through patent life cycle Ref: purchase the sameyear of patent expiration

  18. Main conclusions • Procurement policies should account for the different functioning of originator and generic segments • The important price-differentials between geographical regions highlight different strategies adopted by originator and generic manufacturers • Fluctuation of the price of generics under license through the patent life-cycle demonstrates that patent protection may also impair the delivery of newer generics

  19. Thank you! Contact: luis.sagaon-teyssier@inserm.fr

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