PARIS – The math is not complicated: Take the cost of a drug’s active ingredient, add the “conversion” cost — that is the cost of turning that drug into a tablet — add costs for taxes, packaging, and tack on a 10 percent profit. The sum of that equation, Dr. Dzintars Gotham said here Tuesday, can be the affordable price tag for drugs that treat and cure some of the world’s top infectious disease killers.
Dr. Gotham reminded the audience of the impact generic drug maker Yusuf Hamied’s announcement that antiretroviral medicine could be sold for a “dollar a day” price had in 2001. First, it ushered in the era of dramatic price reductions that made global HIV responses imaginable for funders. Today? More than 19.5 million on treatment.
In 2014, Dr. Gotham’s mentor Dr. Andrew Hill of the University of Liverpool used information on similarities in chemical structure and synthesis processes of generic antiretrovial medicine to estimate the cost of sofosbuvir, the hepatitis C cure that Gilead pharmaceutical company had priced as high as $86,000 per person. The estimate — from $68 to $136 for a course of treatment — led to an obvious conclusion: a course of treatment that cured the disease, ended transmissions, averted illnesses and deaths, could be affordable.
From 2015 to 2017, Dr. Gotham, with Dr. Hill performed similar exercises to estimate the costs of producing medicines to treat HIV, hepatitis B, multidrug-resistant tuberculosis, all solid oral medicines on the WHO essential medicines list, and some cancer medicines.
Using data on exports from India on the costs of drugs’ active pharmaceutical ingredients, as well as conversion costs, taxes and profit margins, they reached price estimates. The antiretroviral medicine tenofovir, they found, for example, could be produced for $159 per kilogram. A kilogram, Dr. Gotham added, is enough to treat 9 people for 1 year. Depending on the size of the shipment, sofosbuvir, they found, could be produced for $1050 per kilogram — enough to treat and cure 30 people.
They compared their estimates to current lowest prices from Médecins Sans Frotières, Global Drug Facility and World Health Organization reports. In the case of one or two drugs, prices actually dipped below estimates. In many cases they exceeded them by double digits. While a treatment course of bedaquiline, the first new drug in nearly half a century to treat tuberculosis, and a potential treatment of last resort for hundreds of thousands of people worldwide is priced at more than $27,000 in the United States, and at a global price of a little more than $800, the drug could be produced generically for a price of $47 to $103.
Among their conclusions: $90 per person could now become a ceiling price for treating HIV, TB, hepatitis C, and hepatitis B, diseases that kill more than 4 million people a year. And asking for that is reasonable and feasible, Dr. Gotham said: India, South Africa, China, Bangladesh, Iran, and Pakistan have all used cost of production estimates in price control mechanisms.