Strategies for price reduction of HIV medicines under a monopoly situation in Brazil


Strategies for price reduction of HIV medicines under a monopoly situation in Brazil


CHAVES, Gabriela Costa et al


Since 1996, Brazil ensures free universal access to antiretroviral medicines (ARV) and other medicines necessary for the treatment and control of HIV infection, through the Brazilian Unified Health System (SUS).7 Over the years, prices, costs and increasing expenditure on medicines under a monopoly situation threaten the financial sustainability of the Brazilian response to the epidemic.7,18,20
The expenses of the Ministry of Health (MoH) have increased due to: the increasing number of people living with HIV receiving ART (antiretroviral therapy); the emergence of viral strains resistant to first and second line regimens; and to the incorporation of new ARV.6,11 The need to migrate to second and third-line therapeutic regimens, due to the emergence of viral resistance, requires the use of more expensive ARV, usually imported and under a monopoly situation.7
In the current situation, of the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) of the World Trade Organization (WTO), the newest ARV are under a monopoly situation in Brazil and internationally. This increases the difficulty to negotiate and obtain price reductions.3,11,18
The ARV medicines under a monopoly situation are those offered by a single supplier, generally because they are subject to patent protection (patent application filed or patent granted in the country).
Studies have examined the evolution of the Ministry of Health expenditure on ARV and the determinants of prices in a historical series from 1996 to 2009.6,9-11,16,a For ARV under a monopoly situation their prices reduced initially, but this gain was lost over time. A significant increase of expenditure on patented ARV was observed, which reached 80.0% of MoH resources allocated for the purchase of all ARV in 2004 and 2005.16
Medicines that have multiple suppliers are more sensitive to variables such as purchase volumes. The prices of medicines under a monopoly situation are less sensitive to purchase volumes, but are affected when the MoH bargaining power in price negotiations is strengthened by the use of: evidence on production costs; the threat or issuance of a compulsory license, amongst others.16 Bargaining power is reduced when the local technological and industrial capacity or the alternatives suppliers do not exist or are limited.9,11,16
International initiatives to tackle ARV prices under a monopoly situation were implemented in developing countries in the 2000s. Major donors, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Unitaid, had an important role in market dynamics and price reductions by purchasing large quantities and using market guarantees to stimulate the development of fixed-dose combinations and pediatric formulations.25
Multinational pharmaceutical companies, in turn, have adopted price discrimination policies ("tiered pricing"), creating categories of price discounts based on criteria established by them, which can include country's level of development and/or the national prevalence of HIV.13,24 However, the same criteria are not universally adopted by companies, and countries might be eligible to price discounts offered by some companies but not by others.
One recent initiative that aims to overcome patent barriers and to encourage the availability of fixed-dose combinations and pediatric formulations is the creation of the Medicines Patent Pool (MPP), which negotiates voluntary licenses with multinational pharmaceutical companies to promote generic competition and reduce prices.b
Although these international initiatives show results in the expansion of access to ARV and addressing some high prices, Brazil is excluded from all of them and has had to develop its own strategies.
The Brazilian Government's main strategies to reduce ARV prices under a monopoly situation, from 2001 to 2007, included: price negotiation with multinational pharmaceutical companies, with the threat of issuing compulsory licenses, based on estimates of production cost19 and international reference prices; the challenging of patent applications by a public manufacturer;1 the issuance of a compulsory license for importation and subsequent local production of the medicine.11,22
The study of governmental strategies to ensure access to ARV in a country like Brazil includes understanding the process of technology incorporation in the health system, approaches to ensure availability (regarding the maintenance and expansion of treatment) as well as initiatives for tackling prices of products under a monopoly situation, including efforts for local production.
The objective of this study was to analyze Government strategies to reduce the price of antiretroviral medicines for HIV.
This is a case study based on the medicine atazanavir, which includes the use of a Partnership for Productive Development (PDP). The methodology involved two steps: analysis of the importance of atazanavir for HIV treatment and its share of the MoH budget for ARV, and comparison of the prices paid by the MoH with international reference prices.
Purchases of ARV by the MoH from 2005 to 2013 were analyzed using the records of the General Services Administration Integrated System (SIASG). This system contains information on public purchases by the Federal Public Administration, from the private sector. SIASG does not include purchases from public manufacturers.
The volume and unit prices of annual purchases were used to estimate the total expenditure on ARV and the proportion represented by atazanavir per year. The final volume per year was expressed as number of treatments. The cost of treatment per patient per year (number of capsules per day × 365 × median price) was also calculated, using as reference the 2008 treatment guideline of the Ministry of Health for antiretroviral therapy in adults.
Median prices in Brazilian reais (R$) were adjusted for inflation by the Consumer Price Index (IPCA), using the references provided at the IPEA-data webpage. The variation rates were calculated for prices and volumes, and the correlation coefficient (t-Student's test) for the 200 mg capsule was also calculated.14
Median prices were converted to the average US dollar rate for the year (IPEA-data) for comparison with international prices. International prices used were as published by Doctors without Borders,c which tracks the lowest prices charged by multinational companies in different countries and by generic alternatives.
The analysis of the PDP for local production of atazanavir aimed to deepen the knowledge about a new Government strategy for price reduction. Among the documents reviewed was the ‘Technical Cooperation Agreement for Sublicensing of Patent Exploitation, Technology Transfer (atazanavir) and Provision signed between the Oswaldo Cruz Foundation and Bristol-Myers Squibb Company' (hereinafter referred to as the "Agreement").
The Agreement was obtained through access to information channels and provided by the Brazilian Interdisciplinary Aids Association.
The agreement shows an estimate of a 5.0% reduction in the price of atazanavir per year. This percentage was used to estimate the price reduction from 2012. The analysis enabled inferences about the conditions of the technology transfer to be made.


Rev. Saúde Pública, São Paulo






revista 2.PNG


CHAVES, Gabriela Costa et al, “Strategies for price reduction of HIV medicines under a monopoly situation in Brazil,” Curadoria Enap, acesso em 4 de outubro de 2023,

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