Global Fund tiered pricing panel for ARVs, other health commodities raises questions

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Zambia didn’t look much different the day after the World Bank changed its status from low-income to middle-income than it did the day before, Global Fund Executive Director Mark Dybul noted in his keynote address to a Georgetown University gathering in December. Dybul, who was discussing the shift in development aid “from paternalism to partnership,” in the midst of the replenishment conference for the Global Fund to Fight AIDS, Tuberculosis, and Malaria, was pointing to long-term challenges facing Zambia and other countries battling the epidemics.

A little more than a week later, though, according to this post on Intellectual Property Watch, an activist from Zambia at the International Conference on AIDS and STIs in Africa expressed concern to Dybul over a Global Fund initiative that could affect the country precisely because of its economic reclassification. At issue was Dybul’s mention in his Executive Director report for the Global Fund’s thirtieth board meeting of a plan “to help expand access to essential health commodities through a multi-tiered pricing framework.” The idea, according to the report would be to “help ensure a sustainable marketplace and maximize availability across countries of all income levels.”

The problem, according to this post  by Dr. Suerie Moon of the Harvard Global Health Institute, is that tiered pricing, setting different prices for the same drugs depending on the economic status of the country they are going to, has been shown less effective keeping medicines affordable than encouraging competition from generic medicines. Putting the decision for pricing in the hands of pharmaceutical companies, Moon writes, could put medicines out of reach in middle income countries.

This, in turn, raises the question of exactly what a middle income country is. While Dybul had a point that Zambia didn’t look any different the day before its 2011 elevation to middle income than it did the day after, the country had seen changes during the preceding year. The largest shopping center in the capital city got its first escalator, for one thing. But power failures still leave homes as well as clinics without electricity in the capital city, and across the country on a daily basis. In addition, stock-outs of antiretroviral medicines and commodities that include HIV testing kits have continued. And, as this response from Medecins Sans Frontieres to the plan points out, most of the people living in poverty across the planet reside in middle-income countries. The MSF piece says that while generic competition dropped the price of HIV drugs nearly 90 percent in the last decade, tiered pricing has led to middle income countries paying in excess of 60 percent more for an antiretroviral drug than low-income countries. It is a cost, MSF says, that can’t be maintained by countries with large numbers of people living in poverty with HIV.

Moon and MSF both indicate that a more meaningful task for the  “blue-ribbon task force” Dybul mentions would be to seek new ways to improve drug access in middle-income countries. The Intellectual Property Watch post quotes MSF Access Campaign HIV/TB advisor Sharonann Lynch saying that Dybul met with activists at ICASA and indicated the Global Fund would consider their concerns, making this an issue to watch in the next months.

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