An analysis of volumes, prices and pricing trends of the pediatric antiretroviral market in developing countries from 2004 to 2012

Our multivariate analysis shows that originator prices are on average 72 % higher than generic prices, despite the marked decrease of 52 % in overall originator prices in 2012 compared to 2004 (p < 0.001.) It is therefore not surprising that this donor-dominated market was rapidly overtaken by generic products. In 2012, 95 % of pediatric ARVs were purchased from generic companies. Price was not the only factor influencing this change; the availability of child-friendly FDCs also played an important role. The prices of pediatric FDCs have remained stagnant despite the fact that volumes of triple and dual FDCs outstripped that of single ARV formulations in 2011. This may be explained by the fact that many organisations have advocated for pediatric FDCs. Even before the development of paediatric FDCs, Médecins sans Frontières reported good outcomes for children using adult FDC in resource limited settings and advocated for child friendly FDCs [5]. WHO and UNICEF further promoted pediatric FDCs through the development of treatment guidelines, priority lists of missing formulations and engaging manufacturers to stimulate product development. A final push was given by UNITAID, an organization financed by a solidarity levy on airline tickets. It successfully created a market for pediatric FDCs in 2006 with the announcement of a price deal of 16 cents a day per child for stavudine/lamivudine/nevirapine [16]. This price positioning was obtained through the advocacy efforts of large institutions and UNITAID’s commitment to purchase commodities.

With the exception of LPV/r, dual and triple pediatric FDCs are exclusively produced by generic manufacturers. They are produced in India where patents for medicines were not granted before 2005 [17]. Developing countries have access to these formulations because according to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, least developed countries do not have to enforce intellectual property rights until 2016 [18]. In the United States of America (USA), these pediatric FDCs were approved by the USFDA under a special program associated with the President’s Emergency Plan (PEPFAR); products with IP protection in the USA may be reviewed and receive “tentative approval” allowing them to be purchased under PEPFAR programs for use in developing countries, but with no marketing rights in the USA. While pediatric FDCs are now the cornerstone of treatment for children in developing countries, they are not available in developed countries where intellectual property (IP) barriers do not allow their commercialization.

Various terms have been used for the pricing strategy that originator pharmaceutical companies adopt in setting prices for countries with different income levels, such as “tiered pricing”, “differential pricing”, “market separation” and “price discrimination” [19–21]. This approach is reflected in the pricing trends of our analysis and may explain why low income countries are paying the lowest originator price, followed by lower-middle income and upper-middle income countries. Although the eligibility criteria for tiered pricing and the different categories of pricing vary across originator companies, 6 out of 7 originator companies include sub-Saharan African countries in their lowest tiered pricing category for ARVs [22, 23]. This explained why, with the exception of low income countries, sub-Saharan African countries also paid the lowest price of all geographical regions for originator ARVs. While the originator’s tiered pricing strategy generally matches prices with the country’s purchasing power, South Africa is an exception. We excluded South Africa from the sub-Saharan African countries in the analysis because it represents a substantial volume of purchase, South African tender favors the selection of local manufacturers and has a committee that specifically regulates pharmaceutical prices [24]. This upper-middle income country pays 71 % less for its originator drugs than the rest of sub-Saharan Africa.

For generic pediatric ARVs, sub-Saharan Africa (South Africa excluded) has not paid the lowest prices. East Asia and Pacific and South Asia were paying 11–13 % less for generic ARVs. The prices of generic ARVs across the 3 economic income groups were not significantly different. Generic pediatric ARV pricing does not appear not to be linked to country income levels or geographical region, suggesting a different pricing strategy to that of the originator companies.

To our knowledge, this is the first time that a thorough analysis of pricing trends of pediatric ARVs from 2004 to 2012 has been presented. While this database captures mostly donor related pediatric ARV transactions, it reflects almost 80 % of donor transactions worldwide. It is a good representation of the pediatric ARV market since 90 % of the children living with HIV are from sub-Saharan African countries where provision of ARVs is largely donor-funded. This analysis has several limitations that should be noted. It could not take into account ARVs for older children who can use adult formulations. In addition, it could not separate ARVs used for treatment and those used for prevention of mother-to-child transmission (PMTCT). However, this is likely to have a negligible effect since the use of paediatric ARVs for PMTCT is limited to two single ARVs, namely AZT or NVP liquid formulations [25–27]. It should be noted that this database represents procurement data and not actual consumption data, and that the quantity and prices calculated per formulation do not represent quantity and prices of actual treatment regimens. The use of Ex-Works prices in this analysis does not take into account other costs such as transportation, insurance, import duties and taxes. We have also noted differences in characteristics at a national level, such as domestic manufacturing capacity for some countries, but it would be difficult to incorporate these into a global level analysis as conducted here.

Another analysis of the GPRM database by Perriens et al. concluded that a great majority of pediatric ARV formulations are being sold at prices that are profitable when the prices were analysed with respect to active pharmaceutical ingredient (API) cost, provided that the cost of development can be recovered from sufficient sales volume [28]. Children represent only 6 % of the total number of people receiving ART in the 2012 WHO survey [29] making the pediatric ARV market a small and fragile market. The number of HIV infected children is dwindling due to the success of prevention programs, as evidenced by the number of children newly infected with HIV dropping from 520,000 in 2000 to 240,000 in 2013 [30]. With a general lack of competition as shown by the stagnation of prices in pediatric FDCs despite relatively high volume of procurement, the pediatric market contrasts with the adult market where prices have decreased drastically over time; the median price per treatment per year paid for adult first line treatment regimens in low and middle income countries decreased 5 fold between 2003 and 2012 [23, 28]. The pediatric market will become even smaller and more fragile if the scale-up of treatment for children does not happen rapidly. WHO recently recommended the development of 11 new pediatric formulations, at the risk of a lack of interest in their development by generic manufacturers who need to recoup research and development costs from the limited profit margins available in this small market [2]. Therefore there is an urgent need to prioritize and rationalize new formulation development with planned phasing out of redundant formulations.

Many initiatives are taking place at the global level to protect this market. In May 2011, a special pediatric working group from the Inter Agency Task Team on Prevention and Treatment of HIV Infection in Pregnant Women, Mothers and their Children produced a list of optimized pediatric ARV formulations to guide donors, ministries of health and procurement agencies to prioritize purchase of pediatric formulations [31]. In parallel, UNITAID, Global Fund, PEPFAR, UNICEF and other stakeholders have set up a Pediatric ARV Procurement Working Group to align procurement, promote product optimization, secure financing, engage with manufacturers and provide in-country support.