January 21, 2005
by Jeremiah Norris
Generic and original medicines exist side by side in most developed countries of the world, serving the needs of patients and society alike. However, the current debate on access to essential medicines, particularly antiretroviral (ARVs) for AIDS treatment, has elevated the former well beyond their scientific legitimacy and supporting clinical data, while at the same time demonizing the latter. Advocates against the President's Emergency Program for Global AIDS (PEPFAR) have generated much of the heat on this issue. PEPFAR has insisted on the provision of medicines with proven quality, safety and efficacy profiles, be they generic or original products. On the other hand, the World Health Organization; the World Bank; UNICEF; the Global Fund for HIV/AIDS, TB and Malaria; the Clinton Foundation; and numerous non-governmental organizations (NGOs) are equally insistent that with the use of less expensive generics, more AIDS patients can be treated, saving additional lives in the process. With such a polarization of values, it will be useful to explore both positions and determine which one puts poor patients first.
What is a Generic Drug?
In 1985, the Congress passed the Hatch- Waxman Act, which then opened the way for generic drugs to enter the U. S. market. The Food and Drug Administration (FDA) then took this enabling legislation and developed standards for generic drugs. These standards put in place four critical barriers for generics to obtain an FDA Approval. In the first instance, there had to be an original product against which the FDA could evaluate the generic. Secondly, the generic had to be both therapeutically and pharmaceutically equivalent to the original product (as determined by such methods as in vivo and in-vitro studies). Thirdly, the generic had to be absolutely interchangeable with the original product, generally referred to as bio-equivalent in terms of its clinical benefit. And, lastly, generics would be subject to the same enforcement measures by the FDA as the original products.
As a testimony to the effectiveness of the FDA approval process for generics, they now constitute almost 50 percent of all pharmaceutical sales in the United States.
Other developed countries, such as those in the European Union (EU), Canada, Australia, Japan and Brazil, adopted similar standards to those of the FDA. Generic sales continue to rise in these countries as well. In fact, in the EU there is full reimbursement for their use, whereas patients using original products incur substantial co-payments.
The WHO Prequalification System
In March 2002, WHO issued its lst Edition of Prequalification. Since then, 17 additional editions have been published. In this system, WHO prequalified manufacturers and suppliers whose "HIV-related medicines have been found acceptable, in principle, for procurement by UN agencies." There were two key components to the prequalified classification: 1) the evaluation of product data and information provided by manufacturers and suppliers (dossier evaluations), and 2) the inspection of manufacturing sites. As a practical matter, though, the WHO was unable to do both tasks. In its 18th edition, released in August 2004, it stated, "several inspections have been performed and others are due during 2004." Only the WHO knows which sites - producing some 102 different drugs of various strengths and dosage forms - have actually been inspected. But this information is considered to be proprietary.
There are several problems in the prequalification process, not the least being the fact that the WHO isn't a regulatory agency and has no enforcement powers. While original products have been prequalified, the only country authorized to supply the entire UN agency system with non-original products is India. In and of itself, this would not be a problem, as several Indian companies market their FDA approved generic products in the U. S. to the satisfaction of physicians and patients alike.
However, the WHO prequalified products designated for poor countries are copy drugs rather than generics. According to WHO, a copy drug may or may not be bioequivalent, and many less developed countries do not require this standard for importation. As copy drugs, the Indian companies are unable to distribute them in any country with a rigorous regulatory authority, such as Canada, Australia, etc.
WHO, in the prequalification process, never referred to the drugs as 'generics,' but simply as "HIV-related medicines." Furthermore, the Drugs Controller General, the Indian agency which licensed the products, only referred to them as 'formulations,' rather than generics. In the licensing process, this agency went even further by stating that the licensee could make "no reference in the advertisement or medical literature that the government has approved the drug."
Nonetheless, the Global Fund for HIV/AIDS, TB and Malaria, the World Bank, WHO, UNICEF, and numerous NGOs selfdelegated them as 'generics.' The popular press picked up the term, too, and the identifier 'generic' emerged into general use.
WHO, in recognition of the fact that it was prequalifying copy drugs rather than generics, issued a disclaimer in each of its 18 editions of prequalification, saying: "inclusion in this list does not constitute an endorsement, or warranty of the fitness, of any product for a particular purpose, including in regard of its safety and/or efficacy in the treatment of HIV/AIDS."
WHO and South Africa Initiate a Re-examination
The stark differences between generic and copy drug products soon surfaced into public consciousness. Beginning on May 27, 2004, the WHO and the Medicines Control Council of South Africa (a regulatory agency) either de-listed previously prequalified ARV drug products, or, in the case of the South Africa, ordered them to be recalled from the market. On Aug. 15, the Medicines Control Council labeled an Indian ARV 'undesirable.' Medecins Sans Frontieres (MSF) and the Treatment Action Campaign (TAC) of South Africa joined in a press release to demand that the manufacturer issue a recall. Three days later, the manufacture offered this same product to Indian patients at a 30 percent discount.
On Oct. 21, 2004, the Indian drug firm Ranbaxy, in consultation with the Medicines Control Council, sent letters to healthcare providers to inform them that it was pulling four of its ARVs from the market. The letters said that Ranbaxy had confirmed "anomalies in data handling and non-compliance with Good Clinical & Laboratory Practices. Hence the study in question can no longer be used as an unequivocal proof of bioequivalence." Ranbaxy offered credit for immediate effect, and promised the provision of alternative therapies to any patient that had experienced adverse reactions to their products.
Then, on Nov. 9, 2004, Ranbaxy unilaterally informed WHO that it was voluntarily removing its entire portfolio of AIDS drugs from the prequalification system. The stated reason: it "found discrepancies in the documentation relating to proof of the products' bio-equivalency with originator medicines." Or, stated another way, Ranbaxy confirmed that a copy drug is not a generic drug.
The differences were further highlighted in the positions taken by WHO with two other Indian manufacturers' products. It did not require them to recall the drugs, nor conduct post-marketing surveillance studies and determine if patients had experienced any adverse reactions. On the other hand, Ranbaxy accepted total responsibility for its products. In taking this principled position, it set a standard that now must be followed by every manufacturer of ARV products.
PEPFAR vs. Drugs of Indeterminate Quality
Over the past 12 months, congressional leaders, NGOs, the Global Fund for HIV/AIDS, and the media continually pressed PEPFAR to purchase the WHO's prequalified drugs, claiming that since they cost less, more AIDS patients could be treated. On May 12, 2004, the Hudson Institute published the first comparative study of prices between copy and originator drugs. Using the only authoritative source on international pricing, the MSF Pricing Guide, this study demonstrated that for single dose ARVs, the average price of an originator product was $404 per person per year, while that of the copy product was $449. For fixed dose combination ARVs, the average price for copy drugs was $1,178, while that for innovator products was $659.
On May 17, the FDA issued guidelines to fast track any application from any country wishing to have their ARV products receive its stamp of approval. This gave voice to PEPFAR's offer to purchase ARV products of proven quality, safety and efficacy, be they originator or generic products, from any source. Along with this offer, the FDA said it would waive the application fee, and jump the line for foreign application, placing them ahead of those from domestic research and development companies. Only one WHO prequalified firm, Ranbaxy of India, has publicly mentioned an 'intent' to file.
There can be no doubt that every government is interested in active participation to combat AIDS worldwide. It is in their common interest. Yet, in the headlong rush to make this a reality, enthusiasm can outrun the best of intentions. The mere fact that PEPFAR held fast on ensuring equity of access to drugs of proven quality, safety and efficacy should not take precedence over a far more important fact: by putting the welfare of poor patients first, its stand on their behalf was a victory for them the world over. In the end, this can elevate true 'generics' within developing countries into the same position they rightfully occupy with originator drugs in developed countries.
Jeremiah Norris is a Senior Fellow and Director of Hudson Institute's Center for Science in Public Policy. He specializes in public-private partnerships in development assistance, trade and development, and global AIDS, tuberculosis, and malaria policies.
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