Early Purchase Facility

							AAS, Burkina Faso, ABIA, Associação Brasileira Interdisciplinar de AIDS, Brésil, ABONG (227
membres), Brésil, ACCION (65 associations), Chili , AHVV+, Centrafrique , AIDES, France, AIDS
Action Europe, Pays-Bas, ANSP+, Rwanda, ANSS, Burundi, APCS Oran, Algérie, ARAS, Roumanie,
ARCAD/SIDA, Mali, ASFEGMASSI, Guinée, CALCSICOVA, Espagne, Czech AIDS Help Society,
République Tchèque, CEE-HRN, Lituanie, Colibri, Cameroun, Commission « sida et développement »,
Coordination SUD (130 membres), France, EATG, Belgique, Espoir Vie, Togo, GAT, Portugal,
GESTOS – Soropositividade, Comunicação & Gênero, Brésil, KENEDOUGOU, Mali, LUMIERE ACTION,
Côte d’Ivoire, Renaissance Santé Bouaké, Côte d'Ivoire, Ruban Rouge, Côte d’Ivoire, Sida Zero,
Gabon, The Sexual Health Centre, Irlande.



                            The International Drug Purchase Facility


                     Position Paper on the establishment of the UNITAID




The members of our network have supported the initiative of taxing aeroplane tickets as part of an
experimental approach to promoting the concept of international taxation to finance development. They are
aware of the necessity of obtaining guarantees about how the resources collected would be allocated, of the
importance of ensuring stable and predictable funding and the fact that this must be additional to existing
public expenditure on development.1

Since the Paris Conference that took place in February 2006, Norway, Chile, Brazil and France have
come to a consensus around the idea of dedicating revenues from the taxation of plane tickets to an
International Drug Purchase Facility (UNITAID). Funding the UNITAID with this proposed new form of
taxation would guarantee it a secure and sustainable funding stream.

In Geneva, on 20th and 21st April 2006, the main supporters of the UNITAID proposed that this new plan
would provide affordable drugs on a regular and sustainable basis, to affected people in the poorest
countries. The UNITAID should pursue a pro-active policy to reduce prices and encourage the
diversification of quality controlled drugs.

The members of our network have also highlighted the importance of a flexible and straightforward
system of allocating UNITAID funds, the involvement of civil society, read-across with national public
health strategies and integration with other international strategies for dealing with pandemics. They have
also argued that the proposal should not be simply superimposed onto existing mechanisms, thereby
complicating decision-making processes and increasing bureaucracy.

Access to drugs in developing countries

17 million people die every year from infectious and contagious diseases because they are unable to access
proper treatment. 95% of them live in developing countries. Out of the 40 million people living with AIDS
in the world, 6 million are currently in urgent need of antiretroviral drug treatment. Only 7-12% of them
have access to the necessary treatment. Moreover, the number of people who have to switch drugs as their
virus becomes resistant to the first-line treatment increases steadily. A 2nd line antiretroviral treatment

1
    Coordination SUD : NGOs’ views on new mechanisms to fund development.
generally costs between US$1,200 and 2,000 per patient per year. The more recent these treatments have
been developed, the more expensive they are. This is as much the case for drugs designed to combat
opportunistic infection and other pathologies as it is for antiretrovirals. More than 4.5 thousand million
people live on annual incomings between $200 and $1,200. Most affected people in developing countries
are therefore completely unable to afford the treatment they need.

The extent of the AIDS epidemic and the need to improve access to antiretrovirals has opened the debate on
the price of drugs and the need for competition by generics. Since 1997, government laboratories (in Brazil
and Thailand) or private companies (in India) have been working to produce generic versions of
antiretrovirals. By breaking the monopoly, these generics have had a huge impact on the price of drugs. In
early 2000, the Indian company Cipla developed a generic tritherapy at the cost of $800 per patient, per
year; less than 10% of the price charged by multinationals. Between 2000 and 2004, Cipla and other Indian
companies (Hetero, Aurobindo, Ranbaxy) increased the availability of generics and prices plummeted as a
consequence. Today, the lowest cost for a tritherapy is around $150.

The introduction of generic antiretrovirals has resulted in a reduction of more than 95% in the cost of
first-line tritherapies. In many African treatment access programmes, the Indian generic products now
represent between 50 and 75% of the drugs taken. The impact of generic antiretrovirals has highlighted a
well-known fact: the greater the number of producers, the closer a product’s price gets to the cost of
producing it. Intellectual property rights are still a threat to affected people. However, despite the 2001
Doha declaration and the commitments made by the members of the World Trade Organisation (WTO),
the protection of intellectual property rights is still threatening competition in the sale of generic drugs in
developing countries.

Since 3rd January 2005, all the developing countries in the WTO, with the exception of a few Least
Developed Countries (LDCs), have been obliged to respect the trade-related aspects of intellectual
property rights (TRIPS) agreement which sets a minimum standard on the protection of intellectual
property. In practice, this means that these countries must now grant a patent of at least 20 years to drugs
and not use generics during this 20 year period.

    This creates a strong barrier to the production and sale of cheap generic versions of patented
    drugs. This will have a rapid impact on the expansion of antiretroviral access programmes and
    on the availability of second and third line drugs and paediatric treatment.
Before this agreement came into force, producers of generics in India and Thailand were able to produce
fixed-dose combination treatments- tritherapy in one tablet. Because they are easier to use and cheaper,
these products play a key role in the widening of access to antiretrovirals. Today, however, the future of
generics production and commercialisation is uncertain. It is even more doubtful whether similar products
will be made available in the future.

The introduction of WTO standards in a growing number of countries is increasingly limiting the
production of generic versions of recent products. This has had a direct impact on prices and constitutes a
major obstacle to the development of adapted treatments and to the widening of access to drugs. As a
result, 2nd line antiretrovirals are between two and 12 times more expensive than first-line treatments.
Governments’ budgets for the purchase of 2nd and 3rd line treatments is becoming an increasing
percentage of their total budget for drugs. In Brazil, for example, 70% of the antriretroviral budget is used
to buy four patented products (lopinavir/ritonavir, tenofovir, efavirenz et nelfmavir).

Generally speaking, the monopolies created by patenting prevents affected people in developing countries
from accessing the latest treatments. It is estimated that the new legislation on intellectual property in India
could lead to an increase of around 200% in the price of new drugs. This will, of course, also impact on the
countries which depend on Indian generics.


    It is therefore clear that the UNITAID will only be able to make a significant contribution to the
    widening of access to drugs in developing countries if it works towards the establishment of
    compulsory licences and other flexibilities of TRIPS in affected countries.



UNITAID Priorities

The UNITAID should therefore address both the solvency and longevity of markets and the legal issues
concerning production, exporting and importing.

      Promote the development, production and sale of drugs, while focusing on those products
      which are necessary for improving the treatment of people in developing countries.

The UNITAID should therefore promote the sale of the new generation of first-line generic drugs at low
prices, treatments for therapeutic failure; the development of generic paediatric and new fixed-dose
combination treatments and the availability of cheap challenge agents.

Widening the range of first-line therapies. Many developing countries have started programs providing
access to antiretroviral drugs for a small number of people living with AIDS. The generic treatments
prescribed in these countries are mainly tritherapies based on stavudine or zidovudine and nevirapine
(Triomune, for example, or Duovir-N). These tritherapies are effective and cheap, but their daily intake
produces significant undesirable side-effects in a large number of patients. These can compromise
adherence to the treatment over the long term. For several years now, patients and doctors in the North
have been using recently-developed medicines that are just as effective and have a much more favourable
tolerance profile. The main ones are tenofovir, emtricitabine, a fixed-dose combination of these two
medicines, plus certain protease inhibitors. It must be admitted that none of these recent medicines is
currently available on a large scale in developing countries, and the main reason for this is their cost (given
the absence of generic versions of these products).

Addressing treatment failure. Patients using antiretroviral drugs need new therapeutic options when first-
line therapies are no longer effective. But access to medicines to address treatment failure remains
extremely difficult and costly in developing countries. The main reasons for this unavailability are
comparable to what is happening in the case of new first-line medicines: the absence of competition from
generics, resulting in costs that remain too high despite pharmaceutical laboratories’ tiered pricing policies.
We should note in this context that no generic protease inhibitor (the ARV class used in 2nd or 3rd line
treatment) is included on WHO’s prequalification list.
Paediatric formulations. Generic laboratories have brought about innovation in the treatment of
HIV/AIDS. They have developed fixed-dose combinations (several active ingredients in a single tablet)
leading to the commercialisation of several tritherapies consisting of a single tablet, taken twice a day. On
the other hand, generic laboratories have not moved forward in terms of developing a combined form of
syrup or powder for children living with AIDS. Similarly only a very few generic, WHO-prequalified
ARV paediatric formulations exist.

Reagents. The cost of reagents for patient monitoring can represent 70 to 80% of the total cost that
patients need to pay for their care. Thus in order to make this treatment truly accessible it is essential to
allow research, development, production and commercialisation of generic reagents.

Given the long-term nature of its resources, and provided it concentrates on the niches that have been
identified, UNITAID can provide security in the market for products considered to be strategic and thus
lead to the production and commercialisation of new generic medicines or reagents. But in order to be
effective, UNITAID must also be an influential tool for implementing the full flexibilities of the TRIPS
agreement of the World Trade Organization (WTO).



    Support the establishment of compulsory licences and non comercial public use in developing
    countries.

There currently exists no sufficiently well-coordinated assistance to help countries seeking to require
compulsory licences for trademark medicines.

The obstacles are well-known: they relate on the one hand to the WHO prequalification of generics and
technical capacity in the countries concerned, and on the other hand to political and economic hurdles
related to constraints imposed in the context of bilateral negotiations. So far as the technical aspects are
concerned, UNITAID can have an impact in moving the current situation forward.

Strengthen WHO’s capacity for generics pre-qualification. The human resources currently available to
the WHO prequalification department do not enable it to fulfil its mission. Dozens of prequalification files
are pending at present, thereby delaying the production and distribution to patients of the corresponding
generic medicines. Prequalification of production sites requires WHO inspection and approval of the
manufacturing line. These procedures require a very considerable commitment of human resources, which
WHO does not have. UNITAID could make available to the WHO prequalification department the
technical assistance required to carry out its job and increase the range of quality generics available for the
fight against the pandemic, thereby contributing to the desired price reductions.

Strengthen technical skills in the countries concerned. In many cases, the countries concerned do not
have the full range of skills necessary for implementing a strategy of developing compulsory licences and
others flexibilities in favour of public health. UNITAID could propose short-term technical assistance to
countries wishing to develop these licences, thereby facilitating and assisting their initiative.

Finance an independent monitor for the implementation of TRIPS agreements. The implementation of
TRIPS agreements is often substantially compromised by constraints imposed in the context of bilateral
negotiations and by the main medicine producers. These constraints are unfortunately only very rarely
made public and at present it is particularly difficult to judge and to understand the real obstacles. By
supporting an independent monitoring body whose principal aim would be to make these difficulties
public, UNITAID could contribute to re-energising the implementation of flexibilities contained in the
TRIPS agreement and reiterated in the Doha declaration (2001), which is an essential condition for its
success.
Intervention and governance modalities

Making therapies available must necessarily be done in the context of global strategies for which treatment
is necessary, but never sufficient. Too often, the responses provided have been only very classical ones in
a public health context, boiling down to a sterile confrontation between prevention and treatment or
between the public and community sectors. The Global Fund for fighting the three pandemics, created in
2002, proposes an approach which in many respects is new: support for strategies really originating in the
countries concerned; the promotion of global approaches involving associations in the field; a transparent
and independent decision-making and evaluation system; and finally, management participation by civil
society.


    Build on programs supported by the Global Fund.

UNITAID should therefore build on these programs and reinforce strategies that have been endorsed and
will be evaluated in the Global Fund context. Treatment quality, and also the coherence of the struggle
overall, depend on this happening.

Avoid creating new centres of decision-making. The multiplication of decision-making centres already
constitutes an undeniable hindrance to those involved in the struggle against HIV/AIDS. UNITAID must
under no circumstances create further procedures and decision-making cycles. In this sense, support for
programs that have been approved in an independent and transparent context would considerably limit the
risk of duplication. UNITAID’s choices could then concentrate on its own area of competency
(stimulating the production and commercialisation of selected products) with appropriate guarantees
concerning acceptable use of the products that it will have enabled to be purchased.

Build on existing evaluation processes. The evaluation mechanisms developed by the Global Fund,
although still by no means perfect, are beginning to provide objective analyses of system breakdowns.
Gradually they will lead to changes in various practices. It would be logical for UNITAID to support and
strengthen this dynamic.


    Support programs that really involve civil society.

Universal access to treatment for these three illnesses, which is a commitment entered into by the G8 at
Gleneagles in 2005, will not happen without a very strong involvement by civil society in developing
countries, which has been a pioneer in global treatment practices. Much remains to be done. Decision-
making bodies are insufficiently open to community involvement and thus deprive themselves of expertise
that has been developing over at least the last 10 years. UNITAID could, through the choices it makes
within the different programs supported by the Global Fund, contribute to promoting programs in which
participation by civil society is the most satisfactory.

UNITAID must work on the basis of the most innovative governance processes.


    Allow for participation by representatives of civil society.

UNITAID must allow full participation of civil society representatives, from donor and beneficiary
countries, in its governing body.

In any case, UNITAID must come under the jurisdiction of a decision-making body involving equally its
donors, representatives of beneficiary countries, civil society in both the North and the South and also the
private sector.