PHA-Exch> Deal Seeks to Offer Drug for Malaria at Low Price

[Claudio Schuftan]

From: Vern Weitzel <vern.weitzel at gmail.com>
crossposted from: "[health-vn discussion group]" health-vn at cairo.anu.edu.au

http://www.nytimes.com/2008/07/18/health/18malaria.html?_r=1&ref=world&oref=slogin

Deal Seeks to Offer Drug for Malaria at Low Price


By DONALD G. MCNEIL JR
Published: July 18, 2008

The Clinton Foundation announced Thursday that it had brokered an agreement
among several drug makers that it hoped would ensure a steady supply of a
crucial malaria medicine at reasonable prices for the world's poor.

The charity, created by former President Bill Clinton, is trying to control
spikes in the price of artemisinin, a derivative of the sweet wormwood plant
that Chinese scientists turned into the latest miracle drug against malaria.

In 2004, when international donors agreed to pay for artemisinin-based drug
cocktails, the price of the raw material soared. In a year, it more than
quadrupled, to about $500 per pound from about $115 per pound. (At the time,
pharmaceutical executives in China blamed farmers for hoarding the supply.)

The Swiss pharmaceutical maker Novartis, then the only company with an
artemisinin-based drug approved by the World Health Organization, absorbed
the losses, and makers of generic drugs were scared away from the field.

But by 2006, after farmers rushed to plant more sweet wormwood and pickers
gathered it in the wild, the price had plummeted to about $70 a pound. It
has remained in that range since.

The complex deal announced Thursday involves two Chinese suppliers of
artemisinin, two Indian companies that turn it into active ingredients and
two more Indian companies, Cipla and Ipca Laboratories, that produce
finished pills.

The Chinese companies have agreed to supply artemisinin at a price of no
more than $136 a pound, said Dai Ellis, the foundation's executive vice
president for access programs. The drug makers have agreed to buy at that
price, but are free to buy elsewhere if they can find it for less than about
$125 a pound. In return, they will sell their products at agreed-upon low
wholesale prices.

At the moment, with global artemisinin prices well below those levels, the
ceiling is "irrelevant," Mr. Ellis said. "Capitalism takes over."

However, he said, donors may soon start subsidizing private-market purchases
of such drugs. (In most poor countries, people buy malaria drugs at private
pharmacies and shops, while AIDS and tuberculosis drugs are distributed by
public hospitals.) Lower prices could create new demand, sending prices of
the raw material up again.

It is unclear how much control over the market the arrangement will create.
Wormwood is also farmed in Vietnam and Tanzania and grows wild around the
world. When prices soared, plans were announced to grow it in South Africa
and elsewhere, and to make synthetic versions.

Mr. Ellis said the Clinton Foundation hoped to sign up more suppliers.

It also announced that Cipla and Ipca would produce a new artemisinin-based
combination, artesunate plus amodiaquine, for about 30 percent less than its
prevailing market price.

Sanofi Aventis, the first company to market a version of this combination
approved by the W.H.O., deliberately did not patent it. Novartis's earlier
product combines artemisinin with a different drug, lumefantrine.

Daniel Vasella, chairman of Novartis, said he was glad to have more
competitors because, even at current artemisinin prices, his company lost 80
cents on each pill it made for public health agencies. With research and
distribution expenses, he said, "It has cost us over $100 million."
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