Drug Regulation Innovation Patent

Hep C Drug Pricing: New Study finds Sofosbuvir globally unaffordable


Imagine waking up on the wrong side of the bed. Your skin looks yellow and you start feeling blue. Abdominal pains make you cringe, despite never having binged. The family doctor rules out jaundice and draws a blank. Your hospital-next-door churns out the blood report and you anxiously gaze into the diagnosis: “Tested positive for Hepatitis C”. You become the latest addition to a pool of around 130 million people across the globe. Initially drained of every modicum of hope, you leap in joy after stumbling upon a revolutionary drug called Sofosbuvir. A 12-week regimen is all it would take to get rid of the disease for good.  The question is: Can you afford it?

Surge Pricing

Uber and Ola aren’t the only ones taking you for a ride; depending on the country you woke up in, the 12-week Sofosbuvir regimen would cost you an equivalent of at least 1 year of your income. A new WHO-led study published by PLOS Medicine reveals that there is a major disparity in the pricing of Hepatitis C drugs across 30 countries. It further highlights the fact that they are priced at highly prohibitive rates. The final report is a result of a long and intensive research effort by Swathi Iyengar, Kiu Tay-Teo, Peter Beyer, Stefan Wiktor, Kees de Joncheere and Suzanne Hill from the WHO along with Sabine Vogler from the WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies.

These researchers conducted an extensive examination of the ex-factory price of a 12-week regimen for Sofosbuvir. They concluded that “the median nominal ex-factory price of a 12-week course of Sofosbuvir across 26 OECD countries was US$42,017, ranging from US$37,729 in Japan to US$64,680 in the US [United States.]” Furthermore, they claim that even this data is conservative since they did not take into consideration other external cost factors such as “supply chain mark-ups and other costs such as the cost of diagnosis, daclatasvir, ribavirin, and health service costs.” I’ve reproduced an extract of the price-comparison stats below:

India Buyers Club

As you can see from the above chart, the study finds that a 12-week regimen of Sofosbuvir can be available in India at $539, i.e. Rs. 35,994.93/- as per conversion rates on the date of publication of this post. On the other end of the spectrum, the Report determines that it would take an individual at least 2 years of average annual wages for a course of Sofosbuvir in Poland, Slovakia, Portugal and Turkey. The Report further claims that 15 of the 30 countries studied would require more than $5 billion to provide treatment coverage for the entire infected patient population of just their country.

In the face of such gut-wrenching prices prevailing abroad, it is no surprise that Australian resident Greg Jefferys endeavored to take treatment for Hepatitis C in India. The Caravan carried a brilliant piece featuring Jefferys’ inspiring quest for an affordable treatment. Jefferys reckoned that instead of paying $84,000 for a course in Australia, he’d get the same course for $900 in India with the total expense adding up to $3,000 after including travel, stay and other expenses. Having arrived in Chennai, he found that Gilead’s anti-diversion measures allowed access to the next bottle of Sofosbuvir only after the last is depleted over a month. Nevertheless he managed to pull a rabbit out of his hat and arranged for three bottles of Myhep, Mylan’s generic version of Sofosbuvir, for a payment of Rs. 30,000. Jefferys went on to found a not-for-profit international buyers’ club for helping people like himself get cheap access to Sofosbuvir from India. He has extensively blogged about his experiences here.

Cheap, but at what cost?

The $539 (or even $900) price-tag on Sofosbuvir in India admittedly makes it dirt cheap for the global consumer. This extraordinarily low price is owing to the voluntary licensing agreements (VLAs) which Gilead has executed with nearly 11 of its main generic competitors in India. These generics manufacture Sofosbuvir at a low cost, sell it at a decent price and pay 7% royalty. Sounds fair? Think again.

The Times of India (TOI) recently carried a piece on the escalation of drug prices in India. TOI reports that according to an editorial in the Lancet Medical Journal, Gilead’s VLAs “prohibit [the generic Indian licensees] from supplying [Sofosbuvir] to several middle-income countries with a high burden of HCV disease, which are home to over 50 million people, and high-income countries—a market where Gilead presumably wants to be able to determine the price”. Additionally, the Caravan piece reveals that Gilead egregiously requires that “the bottles [of Sofosbuvir] be sold [in Asia and Africa] only to patients who could provide “proof of identification, citizenship and residence.”

Most of these concerns would have been nipped in the bud had the drug been unworthy of patent protection in India. In fact, Deputy Controller Hardev Karar had rejected Gilead’s patent application for Sofosbuvir mainly on the ground that it fell short of satisfying the Section 3(d) test. But Karar was left with a sour taste in his mouth after the Delhi High Court ordered a fresh examination of Gilead’s application. He was also allegedly rebuked by the then Controller General Chaitanya Prasad for rejecting the application just a week shy of Obama’s Republic Day visit to India. I have previously covered these developments here.

The last nail in the coffin was the IPO’s recent decision to clear all opposition proceedings against the Sovaldi application. Prof. Shamnad has torn this decision apart inter alia for a flawed application of Section 3(d). Nevertheless, at present this means that patent owner Gilead has the complete power to stub out all generic competition. Furthermore, what is to stop Gilead from doing a Martin Shkreli for Sofosbuvir in India; especially since it is public knowledge that India is the hottest destination for accessing the drug?

A way out(?)

In order for countries to increase investment and minimize the burden of hepatitis C, the WHO-led study recommends that governments and industry stakeholders jointly develop and implement fairer pricing frameworks that deliver lower and more affordable prices. As far as India is concerned, the Delhi HC has been given the opportunity to reassess the true merit of Sofosbuvir. I-MAK and DNPP+ have challenged the patent grant for Sovaldi. Rahul has covered this challenge here.

A study published by the Oxford Journal of Clinical Infectious Diseases has made a staggering revelation: “the cost of production of Sofosbuvir is US$68–US$136 for a 12-week course of treatment based on the same manufacturing methods used in the large-scale generic production of HIV/AIDS medicines”. These findings stand unchallenged. Generic companies, which are not part of the Gilead’s VLAs, will have complete authority to capitalize on the generic manufacture of Sovaldi if the Delhi HC decides that Sofosbuvir is unworthy of patent protection. Therefore I hope that the Delhi HC will decide the Sovaldi case by taking into consideration its potential repercussions on public interest and applying the strictest standard for assessing enhanced efficacy.

P.S. Image from here.

Ritvik M Kulkarni

Ritvik Kulkarni is a final year student at ILS Law College, Pune. He is the Student Coordinator of the ILS Intellectual Property Rights Cell and Student Editor at the ILS Abhivyakti Law Journal since 2014-15. Ritvik first learnt of IP while preparing for his first moot; and has been regularly taking his weekly IP fix ever since. Additionally, he takes interest in learning the law and practice of domestic and international dispute settlement. Speaking of disputes, he's an ardent follower and jabra fan of Game of Thrones. You can get in touch with him at [email protected]; and dont worry he loves F.R.I.E.N.D.S too.

One comment.

  1. Anony1

    I actually imagined waking up on the wrong side of the bed. My skin looks yellow and I start feeling blue. Abdominal pains make me cringe, despite never having binged. The family doctor rules out jaundice and draws a blank. My hospital-next-door churns out the blood report and I anxiously gaze into the diagnosis: “Tested positive for Hepatitis C.” I become the latest addition to a pool of around 130 million people across the globe. Drained of every modicum of hope, and ready to accept the thing called, ‘my fate’, the questions I ponder upon include: Why me? Why the numerous vaccinations which left my arms tattooed for life, didn’t offer protection to this as well? And finally (most importantly), Is there a remedy? My poor mind. Never even considers the fact that even if there is one, I may not be able to get one.

    The answers I could gather:
    1. Why me? Answer: It was a random selection and I was a statistically relevant subject from a statistically huge and dense geography who could get infected by the statistically plausible infections of blood, serum, and other body fluids. The universe did not conspire against me.
    2. Why the vaccinations didn’t protect? The answer was the cruel fact that despite the efforts, as of 2016, no approved vaccine protects against contracting hepatitis C. Hopefully, in 2017, we may have one.
    3. Is there a remedy: The answer, to my utter delight was as if the God itself was talking to me. ‘Yes, my child, there is! This sounded way better than the answer I had expected-Actually people are trying their best, there are some very promising candidates and we will have a remedy pretty soon. My mind stopped thinking. I actually leap in joy. The fact that I won’t be able to get it never crosses my mind. Period.

    Margaret Thatcher once said, “The problem with socialism is that eventually you run out of other people’s money.” An appropriate description for SpicyIP and the likes would be, “The problem with free drugs is that eventually you run out of old drugs to treat new diseases while losing out on people who could have developed new ones.”

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