Negotiated Prices Support Expanded HIV/AIDS Treatment

A study sponsored by the Pan American Health Organization (PAHO) concludes that countries in Latin America and the Caribbean have benefited from joint regional HIV/AIDS price negotiations but could take greater advantage of negotiated prices for antiretroviral drugs and reagents used in HIV/AIDS treatment and diagnosis.

The study was carried out by the School of Public Health of the University of Ohio at PAHO's request, a year after ministers of health from 10 of the region's countries—Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela—concluded negotiations with eight pharmaceutical companies to lower prices on large-volume purchases of antiretroviral treatment and reagents.

The June 2003 negotiations followed similar successful negotiations by the countries of Central America and the Caribbean in 2002, which dramatically lowered prices for antiretroviral treatment. The 2003 negotiations were supported by PAHO, the Andean Health Agency, the Secretariat of the Andean Community, and UNAIDS.

In the study, carried out between December 2004 and January 2005, researchers examined six countries to see if the negotiations had translated into lower-priced purchases. The study concludes that, in entering the negotiations, the countries were able to form strategic alliances and consolidate demand for drugs and reagents, thereby increasing their negotiating power. The result was significant reductions in prices for antiretrovirals and diagnostics.

The study also found, however, that problems with the regulatory framework, administrative structure, and health systems had made it difficult for countries to buy medicines and reagents at the negotiated prices. In particular, difficulties in the procurement process meant that the six countries examined did not purchase antiretroviral drugs directly from the manufacturers as anticipated. Instead, purchases were often made at higher prices, which "reduced the resources available for prevention, diagnosis, and treatment of HIV/AIDS and for other health necessities."

PAHO has reported that comprehensive strategies for scaling up HIV/AIDS treatment, including price negotiations, have contributed to an increase of 108,000 people receiving treatment throughout the region since 2004.

The price of antiretroviral drugs has been one of the main barriers to wider access to HIV/AIDS treatment. Through price negotiations with manufacturers, the cost of first line annual treatment has fallen from $10,000 to approximately $400 in the past five years. Price competition from generic drug makers and voluntary discounts from research and development companies have also contributed to the steep decline in prices.

The study recommended that countries improve access to drugs and reagents, and reduce health costs overall, by addressing the difficulties experienced in implementing conditions of the negotiations, including harmonizing regulations and policies in product acquisition and improving systems for production and distribution of medicines.

The results of the PAHO study were presented to the ministries of health of the countries involved at a meeting in Buenos Aires hosted by the Ministry of Health of Argentina in June. As a result of the meeting, the 10 countries and Brazil have called for a second round of joint price negotiations with manufacturers of antiretrovirals and diagnostics, scheduled to be held in early August in Buenos Aires.