Thank you. Bonjour. Good morning.
It is a pleasure and an honour to be here to testify. Médecins Sans Frontières is an international medical humanitarian organization working in over 65 countries, and I'm here to make primarily three points based on our experience.
First, quite simply, medicine saves lives in poor countries. It sounds quite basic, but it's important to say. Second, access to effective and affordable medicines depends on generic competition. Third, Canada can do more than it is currently doing to support access to medicines in developing countries.
The problem of access to medicines extends to any new drugs and to all diseases, yet AIDS continues to serve as a powerful example of both the dire needs and also the potential provided by price-reducing generic competition and, importantly, political will.
MSF began to provide AIDS treatment in 2001. At the time, a myriad of people said it was not possible in poor countries. There was insufficient infrastructure, it was said. Poor patients will not take their treatment regularly. Even, “Africans do not even have watches, how are they are going to know when to take their treatment?” At the time, there were only 8,000 people in all of Africa on antiretroviral therapy.
Now, of course, these arguments ring hollow. At MSF clinics we now enrol thousands a year rather than dozens. We are innovative, based on the resources available. Nurse-initiated treatment is common and effective. Treatment is radically decentralized and simplified away from hospitals and towards health posts, under trees, and on the roadside. To the skeptics, it is working. Some 5.2 million are on treatment who would not be alive without it, as apparently you heard in a previous hearing. A 2006 study published in JAMA found that Africans are on average more adherent than patients in North America to treatment.
The treatment scale-up over the past decade has only been possible as a result of generic competition. Generic competition caused annual first-line ARV drug prices to plummet from over $10,000 per patient per year to $67 per patient per year for the most affordable generic combination treatment today.
I was in South Africa working with MSF in 2002 when our goal was to provide treatment for 180 people in a pilot project. That first batch of patented drugs cost more than the car that drove the medicines from the pharmacy to the clinic. That may be fine for a pilot project to prove the skeptics wrong, to make a dent in the overwhelming need, and to be a call to action, but MSF could not provide AIDS treatment for 160,000, as we do today, at the price charged by brand-name manufacturers--nor could the global fund, to which the Canadian government just contributed $520 million U.S. over three years. Forgive me for doing the U.S. calculation.
PEPFAR, a major procurer of AIDS drugs, has likewise acknowledged the significance of generic competition in its global AIDS contributions. Initially resistant to the use of generic medicines, PEPFAR now procures--in a recent study published--90% of its AIDS medicines from generic manufacturers.
PEPFAR estimated that it saved $215 million U.S. in 2008 alone through the use of generic ARVs--$215 million U. S. In one year, PEPFAR's cost savings from generic procurement are more than one year of Canada's contribution to the global fund. That's not to praise the United States or to denigrate Canada, but simply to show the profound significance of generic competition in bringing costs down and making a scarce resource more affordable.
But times are changing. The dramatic reductions from generic competition are no longer available for newer medicines as a result of the TRIPS agreement intellectual property requirements. Second-line AIDS medicines, improved first-line drugs, and newer medicines for all kinds of other diseases are and will be more expensive, sometimes prohibitively so. Fixed-dose combinations—three-in-one pills necessary for good adherence and rapid scale-up—cannot be created if patented by different manufacturers.
In human terms, 10 million are in immediate need of first-line AIDS treatment. Drug prices matter dearly for these people. There is also an approaching treatment time bomb, a phrase recently coined by the U.K. Parliament's all-party parliamentary group on AIDS. Increasingly patients will need to switch to newer drugs for long-term survival, but the price difference is massive between the cheapest first-line medicines, more often available in generic form, and improved first-line, second-line, and salvage therapy, more often not.
For second-line treatment, the cost differential is a factor of seven. For salvage therapy or third-line, it's a factor of at least 23, where it's even available.
Drug costs will increasingly limit patient options and swallow health budgets without dramatic price reductions. AIDS is only an example, and it need not be the case. Compulsory licences provide a mechanism to allow for generic competition despite patent barriers. Compulsory licences on efavirenz led to a 50% price drop in Thailand and a 77% drop in Brazil, allowing the additional treatment of 20,000 patients in Thailand and a threefold increase in Brazil.
A workable paragraph 6 decision is critical for countries with no or insufficient generic manufacturing capacity, particularly as even least developed countries are obligated to adhere to TRIPS and enforce patents by 2016.
In Canada's first attempt to implement the paragraph 6 decision, or the August 30 decision, as it's sometimes called, it created additional unnecessary barriers for these most disadvantaged populations needing to use the system because they lacked domestic manufacturing capacity. Why should the poorest of the poor be triply burdened?
MSF invested years, ultimately unsuccessfully, as you heard this morning from Rachel Kiddell-Monroe, trying to use the system. There was clear need, but the burden on countries and generic manufacturers was so substantial and the delay so long that we secured a WHO pre-qualified Indian generic before CAMR could be made workable.
Notably, it was not a question of an inability to compete with the Indian supplier. Once produced, the Apotex fixed dose combination was $143 U.S. per patient per year, compared to $176 U.S. per patient per year from Aurobindo and Cipla in India. Canada could compete on price, but Canada hobbled because CAMR mandated slow speed and ineffectiveness.
If someone in Ottawa, Toronto, or Quebec acquires HIV, she can expect to live to about 70 years of age, according to recent studies. But what is available for those in developing countries living with HIV? At Médecins Sans Frontières, we urge Canada to support the easiest possible access to affordable medicines in developing countries with insufficient generic manufacturing capacity.
I lead into the industry representatives, and I'll say that the industry will always have excuses. I hope the government won't.
Thank you.