Regulatory Beat: Manufacturers face Challenges Producing Treatments for AIDS, Third World Diseases - Assistance in identifying markets, technologies aims to spur biotech product development - BioPharm


Regulatory Beat: Manufacturers face Challenges Producing Treatments for AIDS, Third World Diseases
Assistance in identifying markets, technologies aims to spur biotech product development

BioPharm International

In addition to identifying viable markets in the developing world, BVGH plans to identify situations where alternative mechanisms are needed to improve the market opportunity for a specific product, explains BVGH Executive Director Wendy Taylor. One strategy is to create advance market commitments (AMCs) or advance purchase commitments (APCs), which have gained support from European financial ministers and the World Bank. Current scenarios call for sponsors (governments, donors, international organizations) to guarantee to pay a company that develops an effective vaccine or treatment for a specific number of doses at a certain price. This might be a $3-billion market guarantee for, say, a malaria vaccine at $15 per treatment for the first 200 million doses. The recipient country would contribute a small co-pay, with the sponsors absorbing the remainder of the bill. Once the manufacturer realizes the $3-billion market commitment, gaining a reasonable return on its investment, it would agree to drop its price to designated countries to ensure them access to the product over the long term.

Similar mechanisms have been included in BioShield legislation in the US in an effort to encourage industry to develop counter-terrorism therapies. To date, these measures have failed to attract broad manufacturer participation on the domestic front, largely due to liability concerns and uncertainty about future returns on investment.


While the noticeable increase in funds available to support treatment programs to combat AIDS and other third world diseases may spur biotech R&D in this area, manufacturers still face many challenges in producing quality products and ensuring their proper distribution in developing countries. Rising global demand for AIDS therapies already is spurring drug counterfeiting and illegal diversion of low-cost fixed-dose combination drugs (FDCs) from third world markets. The United Kingdom's National Health Service reported in April 2005 that it had erroneously purchased ARVs that were illegally diverted from Kenya. The Global Fund to Fight AIDS, Tuberculosis and Malaria recently halted its AIDS programs in Uganda after audits uncovered discrepancies in program accounts.

To prevent such problems, donors and health programs seek to establish secure distribution and warehousing systems to manage the fast-expanding quantities of drugs and medical products going to developing countries. PEPFAR and the US Agency for International Development (USAID) are designing their own secure supply chain management system (SCMS) to procure pharmaceuticals and other medical products for the program's 15 focus countries. USAID is negotiating a contract, which could amount to $7 billion over five years, to establish a "one-stop shopping point" for medical supplies which will also negotiate low prices, prevent drug theft and diversion, and verify product quality.

Many observers consider the PEPFAR/USAID initiative redundant with similar programs already under development. PEPFAR officials claim that local governments and third-party donors will have the option of using their own systems instead of the PEPFAR/USAID SCMS, but organizations receiving PEPFAR funds may well feel pressure to adopt the US program.

Distribution is just one of the many challenges that biopharmaceutical manufacturers face in developing and producing new treatments for needy populations. But the situation also presents an opportunity for industry to demonstrate its ability to provide affordable, effective treatments for deadly diseases affecting so much of the world.

Jill Wechsler is BioPharm International's Washington editor, 7715 Rocton Avenue, Chevy Chase, MD 20815, 301.656.4634,

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