PharmExec Blog

Why Won’t Andrew Witty Take the Dive? (Updated 7/30/10)

AIDS: An epidemic without end. It’s mostly fallen off the front pages—who has time or money or compassion for a decades-old global health crisis when we’ve got our own global economic crisis?—except for every two years when the International AIDS Conference comes around. The one held in Vienna last week earned some ink, but the big news was an old story: The help once promised is not on the way.

Wealthy nations that donated many billions to create the Global AIDS Fund in 2001, pledging universal access to treatment by 2010, still owe billions. So two out of every three HIV patients—some 10 million—in most of Africa and much of Asia, Russia, Eastern Europe, and even Latin America still can’t afford drugs. Without them, they are doomed to terrible deaths.

As for the 5 million on the standard three-drug cocktails, a growing number are developing HIV resistance, and they need a second (or third or fourth or … ) combination of new drugs or old drugs or anything.

And what about the children? Only half of the 20 or so HIV drugs on the market are available to kids.

The inconvenient truth about AIDS is, the drugs cost a lot, and you have to take three at once for the rest of your life, and when the forever-mutating virus finds a way around your cocktail, you have to take three new drugs. In the US, the total lifetime cost of HIV drugs for one person averages about $750,000.

Yet almost miraculously, a global activist movement forged an uneasy coalition over the past decade with the UN, HIV drugmakers, generics shops, and the developing world (led by big-daddy donor the US) around the shining belief that every person with HIV had the right to effective treatment, no matter the price. But the will energizing that belief is flagging.

One possible bright spot in Vienna was the launch of the Medicines Patent Pool by UNITAID, an international drug-purchasing agency for HIV, malaria, and tuberculosis. Three leading HIV drugmakers—Merck, Gilead, and Tibotec—were said to show “considerable interest” in licensing their entire HIV portfolios to the pool, not excluding best-selling, state-of-the-art products like Merck’s novel Isentress, Gilead’s fixed-dose combo Truvada, and Tibotec’s resistance-busting Prezista. Bristol-Myers Squibb and Abbott were said to be warming to the pool, but ViiV Healthcare, an HIV joint-venture between GlaxoSmithKline and Pfizer intended to restore the British firm’s early leadership in the AIDS market, remains ice cold to the pool party.

The patent pool idea materialized for AIDS advocates as the most practical mechanism to spur investment in the large-scale development of generic versions of not only the best HIV drugs but—equally essential—new fixed-dose combinations and formulations that Gilead, Glaxo, and the rest, left to their own incentives, have shown no interest in producing. Yet only a tiny fraction of people in the developing world have access to these drugs—they’re second-class patients on suboptimal therapy, but beggars can’t be choosers, right?

Once the innovator company contributes its IP to the pool, which will be funded and run by UNITAID, copycat companies will manufacture and market the antiretrovirals at affordable prices. As generics competition heats up, drug costs will fall further. Currently, first-line triple-drug therapy using branded products costs between $600 and $1,000 in places like South Africa, while generic competition has cut older first-line treatment to $87. For second-line cocktails, in the absence of generics, the prices are 17 times more expensive. 

In return for their compassion, the branded firms will get 5 percent royalty on all sales—chump change for Big Pharma, but more than they are already making by not selling these new drugs, combinations, and formulations to millions of people who can’t pay for them anyway. Plus, with free patents in the pool, generics-makers won’t have to entangle the pharmas in wasteful lawsuits.

A patent pool may not be the perfect solution, as the HIV drugmakers’ fear of commitment, even after long, drawn-out discussions with UNITAID makes plain. But self-interests clash, and then a compromise is struck. Above all, Big Pharma is loath to give aid and ammunition to its enemy, the generics industry. Yet for the mountains of men, women, and children with untreated HIV who are sick, the status quo is a death sentence. That is the ultimatum driving UNITAID—and it appears that Merck, Gilead, and Tibotec get it. 

But Glaxo doesn’t. This snub may seem surprising, given CEO Andrew Witty’s conspicuous display of concern for neglected diseases and the health of the world’s poorest since he took the job two years ago. In his most earnest, caring, and new kind of pharma CEO mode, Witty won weeks of glowing headlines for his big speech at Harvard last year about how the industry had to become a catalyst for positive global change—and he proceeded to make a series of Glaxo pledges to the developing world, including “a more flexible approach to IP,” a 75 percent discount on drug prices, and the re-investment of 20 percent of sales in local infrastructures.

He liked the idea of a patent pool so much that he started his own—the Least Developed Country Patent Pool. “We need to make sure nothing gets in the way of access, least of all price,” he said, earnestly and caringly.

Yet the UNITAID pool? Not his cup of tea. “HIV isn’t a neglected disease,” Witty said, explaining that while his pool is intended for malaria and other diseases long underfunded R&D, HIV is positively humming with innovation. ViiV Healthcare alone has promised to turn out a new drug every year starting in 2012.

No doubt Glaxo and other HIV drugmakers have other issues with the UNITAID pool agreement: ViiV reportedly opposes the inclusion of the BRIC nations, with their fast-growing middle-class; opposes the administration of the patent pool by UNITAID; and opposes the creation of what may turn out to be an independent public/private R&D enterprise, with its competitive potential. About all this, an advocate is tempted to say, “Tell that to the people who are dying for want of your drugs.” 

Medecins sans Frontiers, Oxfam, and some 15 other public health nonprofits have been dogging Witty to get in the pool, with letter, petitions, and public statements. (Witty’s AIDS-is-not-a-neglected-disease dismissal could be parodied nicely on an activist T=shirt.) “He is wrong,” MSF immediately responded, arguing that innovations that meet the specific medical needs of the HIV populations of the least developed countries—cheap new fixed-dose combinations, say, and pediatric formulations—are being neglected by Big Pharma because the market for such products in rich nations is so small. Generic manufacturers—the logical innovators—are discouraged from investing in the development  because of the patents. If the Glaxos of the industry aren’t up for the emergency, shouldn’t they just get out of the way?

The top priorities for UNITAID’s HIV pool are a protease inhibitor for children and a new combination of Gilead’s Viread and an experimental Tibotec compound. These don’t require billion-dollar, decade-long, cutting-edge R&D prowess—a Chinese or Indian copycat shop can whip them up once free IP lowers the manufacturing bills. And as for Witty’s pledge of a 75 percent discount on drugs, MSF said that over the past decade most antiretrovirals became affordable in poor nations only when the price fell by at least 95 percent.

Otherwise, MSF and other advocates have applauded Witty for his new global health initiatives. What activist would be so cynical or paranoid as to believe that Witty got the jump on the patent pool idea to steal UNITAID’s thunder or to deflect fallout from his own rebuff? Still, on the very day when the British government publicized a big study exhorting drugmakers to join the UNITAID venture, Witty turned up in, of all places, a dusty village in rural Uganda. He went there to make AIDS pledges, including $80 million to develop pediatric HIV formulations. Life is full of crazy coincidences. 

But all the pledges and patent pools in the world won’t bend the curve of the plague without the overdue funding from US and other rich (or rich enough) nations. By 2030, there will be 500 million people with HIV in Africa, Asia, Eastern Europe, and Latin America who need the drugs. 

AIDS: An epidemic without end. It’s mostly fallen off the front pages—who has time or money or compassion for a decades-old global health crisis when we’ve got our own global economic crisis?—except for every two years when the International AIDS Conference comes around. The one held in Vienna last week managed to get some ink, but the big news was an old story: The help once promised is not on the way.
Wealthy nations that donated billions to create the Global AIDS Fund in 2001, pledging universal access to treatment by 2010, still owe billions. So two out of every three HIV patients—a total of 10 million—who need drugs in most of Africa and much of Asia, Russia, Eastern Europe, and even South America still can’t afford them.
As for the 5 million on the standard three-drug cocktails, a growing number are developing HIV resistance, and they need a second (or third or fourth or … ) combination of new drugs or old drugs or anything.
And what about the children? Only half of the 20 or so HIV drugs on the market are available to kids.
The reality of AIDS is, the drugs cost a lot, and you have to take three at once, and for the rest of your life, and when the forever-mutating virus finds a way around your cocktail, you have to take three new drugs. In the US, the total lifetime cost of HIV drugs for one person averages about $750,000.
One possible bright spot at the conference was the launch of the Medicines Patent Pool [1] by UNITAID, a drug-purchasing group for HIV, malaria, and tuberculosis. Three leading HIV drugmakers—Merck, Gilead, and Tibotec—have agreed to license their entire HIV portfolios to the pool, not excluding best-selling, state-of-the-art products like Merck’s novel Isentress, Gilead’s fixed-dose combo Truvada, and Tibotec’s resistance-busting Prezista.
The patent pool idea was developed by AIDS advocates during the 15-year fight with pharma to shave a few zeros off that $750,000 price tag in the developing world, where 95 percent of all people with HIV live. A drugmaker contributes the intellectual property of its AIDS drugs for generic manufacturers to analyze, break down, and study. As copycat competition heats up, the prices come down. UNITAID estimates that a drug costing $1,000 a year could eventually go for as little as $100. In return, the branded drugmaker gets a 5 percent royalty on all sales—chump change for Big Pharma, but more than any of the companies are currently making by not selling these drugs to people who can’t pay for them anyway. Plus, with all those free patents in the pool, generics-makers won’t have to file wasteful lawsuits against pharmas.
A patent pool may not be the perfect solution, but it’s bound to be better than the status quo, at least for the 10 million AIDS patients without access to treatment. And it doesn’t threaten the almighty patent, so pharma can live with it. All told, a win-win, right?
Well, not for every drugmaker. Bristol-Myers Squibb and Abbott were said to be warming to the pool, but GlaxoSmithKline, the onetime king of the HIV market that was kicked to the curb by the protease-inhibitor innovators, remains ice cold. That may come as surprise, because CEO Andrew Witty, who after only two years on the job is routinely described in the press as “energetic,” “charismatic,” and “caring,” had seemed to like the idea so much that he started his own pool last year—the Least Developed Country Patent Pool.
Who could’ve missed the big speech he gave at Harvard, and the glowing reviews that followed, pledging to the developing world “a more flexible approach to IP” plus discounting drug prices by 75 percent, plus investing 20 percent of sales in local infrastructures, plus an open lab in Spain, plus the pool. “We need to make sure nothing gets in the way of access, least of all price,” he said, caringly.
Asked why the UNITAID pool wasn’t his cup of tea, Witty said, “HIV isn’t a neglected disease”—his patent pool is intended for diseases with a severe lack of treatments, while HIV is positively humming with innovation. Another albeit unspoken obstacle is the fact that Glaxo recently got back in the HIV game with the startup of ViiV Healthcare, pledging to deliver one new product every year from 2012 on. At the AIDS conference in Vienna, ViiV showed off its very good Phase IIb data from its lead drug, which if approved would be the first once-daily integrase inhibitor—and its resistance and potency profile might blow Isentress out of the water.
It’s true that HIV isn’t technically a neglected disease any longer, even if it remains endemic to, and epidemic in, all the same people and places neglected diseases run riot. But Witty’s distinction struck advocates as, to put it politely, academic.
“He is wrong,” said Medecins sans Frontiers (MSF), which along with Oxfam and some 15 other public health nonprofits has been dogging Witty to get in the pool. They argue that innovations that meet the medical needs of poor people with HIV—specifically affordable new fixed-dose combinations and pediatric formulations of already approved drugs—are being neglected by Big Pharma because the market in rich nations, even among people with HIV, is so small. Generic manufacturers—the logical innovators—are discouraged from investing in the development of these products because of the patents.
Do the math: First-line triple-drug therapy using branded products costs between $600 and $1,000, while generic competition has cut older first-line treatment to $87. For second-line combinations, in the absence of generics, the prices are 17 times more expensive. The top priorities for UNITAID’s HIV pool are a protease inhibitor for children and a new combination of Gilead’s Viread and an experimental Tibotec compound. These don’t require billion-dollar, decade-long, cutting-edge R&D prowess—a Chinese or Indian copycat shop can whip them up once free IP lowers the manufacturing bills. And as for Witty’s pledge of a 75 percent discount on drugs, MSF said that over the past decade most antiretrovirals became affordable in poor nations only when the price fell by at least 95 percent.
Not that MSF is claiming that Witty got the jump on the patent pool idea to steal UNITAID’s thunder or deflect fallout from his own rebuff—that’s extreme even by the paranoid standards of AIDS advocates. Still, on the very day when the British government released a study urging that all pharmas join the UNITAID venture, Witty turned up in, of all places, a dusty village in rural Uganda. Coincidence? You decide. He went there to make more AIDS pledges, including $80 million to develop pediatric HIV formulations.
Of course, without the Global Fund from the US and other rich (or rich enough) nations, all the pledges and patent pools in the world won’t make a difference. By 2030, the number of people with HIV in poor countries who are in need of treatment will be 50 million.
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2 Comments

  1. Posted July 30, 2010 at 3:13 am | Permalink

    This is just a clarification from UNITAID that, while a number of companies have been in discussions with the UNITAID Medicines Patent Pool initiative, no licensing agreements have yet been reached with any companies. For further information, please see the statement posted on the UNITAID website at: http://www.unitaid.eu/en/20100722271/News/UNITAID-STATEMENT-ON-THE-MEDICINES-PATENT-POOL.html
    Esteban Burrone, Policy Officer, Medicines Patent Pool Initiative, UNITAID

  2. 1971thistle
    Posted July 30, 2010 at 4:39 am | Permalink

    “Generic manufacturers—the logical innovators”

    Is that not an oxymoron? Surely by definition a generic manufacturer copies the innovator drug, and therefore does not innovate?

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