Pharmaceuticals and Global Health: Inequalities and Innovation in the
21st Century
The Pharmaceutical Industry and Global Health: Emerging Models of
Pharmaceutical Development and Production
Brazil's ARV production technology transfer strategy:
could it transform the AIDS treatment landscape in
Sub Saharan Africa?
Giuliano Russo 1,2, Lícia de Oliveira3, Alex Shankland2, Tania Sitoie4
1 Instituto de Higiene e Medicina Tropical (Portugal)
2 Institute of Development Studies (UK)
3 Farmanguinhos, Fundação Oswaldo Cruz (Brazil)
4 Direcção Nacional de Assistência Médica, MoH (Mozambique)
Introduction
• The Brazilian Government is helping the
Government of Mozambique to set up an ARV
factory in Maputo
• Brazil’s recent experience in medicine
manufacturing, HIV/AIDS fight and SouthSouth cooperation
• This particular experience provides an insight
into local production of pharmaceuticals (LPP)
in Africa
1
Framing the issue
Net trade flow (exports minus imports) by value of medicinal and pharmaceutical products, by
groups of countries (USD million, at current prices)
Source: UNCTAD 2013
2
Local production of
pharmaceuticals in LICs
• Past consensus that LICs lack critical mass to produce quality
medicines at competitive prices (Kaplan and Laing, 2005; Rovira,
2006)
• However, 38 countries in Africa have now pharmaceutical factories
(UNIDO 2011), especially in North Africa, South Africa, Uganda, Kenya
(Ogunye et al, 2009) Zimbabwe and Nigeria (UNIDO 2010)
• Recent research has shown prices for locally produced drugs not
necessarily higher (Kuanpoth, 2007; Mackintosh and Mujinja, 2008,
Kaplan, 2011)
• New UN and AU initiatives to study and support local production of
pharmaceuticals (WHO/PHI, EU, UNIDO and African Union)
• Recent changes in demand, funding and patent rules for AIDS drugs
3
(Anderson, 2010)
The Brazilian experience with production
of pharmaceuticals
• Relevance of state-owned pharmaceutical
industry in Brazil (eg. Farmanguinhos, although
representing 5% of drugs)
• Threat of compulsory licensing for ARVs helped
bringing down prices in Brazil (Flynn 2008;
Galvao 2002)
• National pharmaceutical industry instrumental in
rolling out the national AIDS policy of universal
access to treatment (do Lago and Costa 2009)
4
The Brazilian experience with
South-South cooperation
• Focussing on Portuguese-speaking African
countries and Latin America to strengthen its
international standing and access to markets
(Russo and Shankland, 2013)
• Aimed at reproducing domestic success stories
(the ‘cerrado revolution’, SUS, AIDS, malaria and
human milk banks)
• Brazil’s notions of state-capitalism, health
diplomacy (Kickbush et al, 2007), ‘industrial
health complex’ (Gadelha, 2006) and
‘Structuring Cooperation in Health’ (Buss, 2011)
5
The ARV factory project in Maputo
• Born as an informal agreement between former
presidents to reduce dependency (De Oliveira,
2013)
• The factory, called SMM, will be owned 100% by
the Mozambican Govt through its State
Shareholding Management Institute (not MoH)
• USD 34.6 million overall cost of the project so far,
sponsored by Brazil, GoM and VALE (de Oliveira,
2012)
• 21 generic drugs agreed with MoH to be
produced for high-burden of disease conditions
• Construction of a medicine quality control lab
6
What has been achieved so far
• Factory infrastructure has been completed and
equipped – factory was inaugurated in July 2012
• Medicine quality control lab has been set up
• 70 staff have been trained in Brazil and Moz in
pharma production and management
• Application for WHO quality certification
(expected in 2014)
• Donation of 8 medicine production files
(technology transfer)
• In Jan 2013 secondary and tertiary production
was started for some of the 21 drugs planned
(among which, 6 ARVs)
7
Retail prices of selected locally
produced and imported ARVs
Product
3TC - Lamivudine 150mg
(60 cps)
NVP - Nevirapeine 150mg
(60 cps)
AZT - Zidovudine + NVP
+ 3TC (300+200+150mg)
(60 cps)
AZT - Zidovudine + 3TC
(300+150mg) (60 cps)
SMM 1
CHAI 2
WHO 2
PEPFAR 2
MSH 3
Min
Max
Min
Max
Min
Max
0.045
0.044
0.040
0.050
0.051
1.625
0.0408
0.1578
0.049
0.050
0.040
0.050
0.057
1.928
0.0452
0.2596
0.205
0.186
0.180
0.200
0.286
0.971
0.1488
0.3006
0.168
0.146
0.130
0.150
0.158
2.905
0.1446
0.4629
Source: 1 SMM Financial Department; 2 CMAM; 3 Management Science for Health
International Price indicator guide.
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Outstanding issues
• Financial sustainability (100% of ARVs are paid
and procured by international agencies)
• Ownership of the factory and GoM’s
willingness to lead (what institution will be
responsible for managing the factory within
the GoM?)
• Access to markets (local private market is
crowded out by donations, and there is a lot
of competition in the rest of Southern Africa)
9
Insights on LPP in LMIC
from the Maputo factory’s experience
• Production costs may be overcome by tinkering with
the cost structure (tax breaks, investment subsidies and
profit)
• Lack of flexibility of current drugs financing
arrangements may be the key hurdle for local
production of pharmaceuticals
• The ARV market is too narrow a niche for local
producers, as it is marred by decreasing margins
(Nakakeeto et al, 2013) and distorted by external funds
(Izazola-Licea et al, 2009)
• The info benefits from local production may be further
reaching than expected for local govts (Flynn, 2008)
10
References
Anderson, Tatum. 2010. “Tide Turns for Drug Manufacturing in Africa.” The Lancet 375 (9726) (May): 1597–1598. doi:10.1016/S0140-6736(10)60687-3.
Buss, Paulo. 2011. “Brazil: Structuring Cooperation for Health.” The Lancet 377 (9779) (May): 1722–1723. doi:10.1016/S0140-6736(11)60354-1.
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———. 2013. “Inicitativa De Instalação Da Fábrica De Antiretrovirrais e Outros Medicamentos Em Moçambique; Avaliação Do Projecto”. Farmanguinhos, Fundação
Oswaldo Cruz.
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The ARV factory in Mozambique study