AIDS is responsible for 2.5 million deaths every year. Currently over 33.4 million people are infected with HIV world-wide. Over 95% of cases are found in developing countries.

Since the discovery of AIDS in the beginning of the 1980's, the development of drugs for the treatment of AIDS has been remarkable: in less then two decades, close to 20 new antiretroviral drugs have been brought onto the market. However, without exception, these drugs are unaffordable for the vast major of people living with AIDS.

AZT (Zidovudine) is an effective drug in both the treatment of AIDS and the reduction of mother-to-child transmission.

AZT appeared on the market in 1987 as one of the highest priced drugs ever marketed, and remains unaffordable for the majority of people with AIDS. The present study is a comparative overview of AZT prices from different suppliers in different countries around the world. It is not a comprehensive study; the aim is to illustrate the difference of prices of AZT, depending on the country, supplier and existence of competitors.

AZT was first developed in 1964 in the National Cancer Institute in Detroit, USA. Application for cancer treatment was searched, but interrupted due to the drugs' toxicity. The antiretroviral activity of AZT was recognised 11 years later against the Friend virus (a virus similar to HIV).

The first promising results against HIV were seen in 1984 by studies conducted at the National Cancer Institute, USA. Burroughs Wellcome laboratories, UK, carried out subsequent clinical trials. Burroughs Wellcome patented the use of AZT for AIDS treatment one year later and it took only two more years before commercialisation, registration having been greatly facilitated by the granting of orphan status to the drug* . ³

Manufacturers and suppliers of AZT were first identified from different international suppliers. Countries with a generic drug industry and where the product patent for AZT is not recognised were selected; Thailand, India, Canada, Spain and Brazil were seen to be the most suited.

Between April and September 1999 written confirmation was requested from all manufacturers on the following information: price, availability and delivery delay of the AZT product. All prices were converted into $ US. The information presented here on raw material concerns only the active ingredient (AZT).

Apart from Glaxo Wellcome, the patent holder of AZT, seven manufacturers of raw material were identified in India, Brazil, Canada and Spain. Unconfirmed information stated production in Mexico and China. Information concerning the source of raw material and the main destinations for commercialisation both of raw material and finished products is often considered confidential and rarely shared. Therefore, the source of raw material used by companies manufacturing finished product was rarely identified.

Table 1: Producers of raw material

The most common presentation of raw material is as 50kg drums. The prices of AZT raw material vary between $US 1,100 and 1,600/kg.

Thirteen alternative manufacturers (i.e. other than Glaxo Wellcome) of AZT in its final dosage form have been identified in seven different countries. India is the country with the greatest number (3), one of which only produces for exportation (POND). Two manufacturers were identified in Canada, Spain, Thailand, Brazil and one in the US and in Honduras.

All companies are licensed by the Food and Drug Administration of the respective country and quality can therefore be assumed. A further guarantee of quality comes from the fact that almost all of the finished products are registered at least in the country of production. The exception is POND´s AZT, which is not registered in the country of production (export only).

The finished product is usually presented as 100mg capsules in boxes of 100 units each (Pharmacy pack). Hospital packs with up to 500 capsules are available. For higher doses (250mg and 300 mg) the pharmacy packs, contain 60 and 40 capsules respectively; hospital packs contain up to 300 capsules.

Pharmacy packaging, container with a number of units equivalent to an individual treatment; Hospital packaging, container with a higher number of units than the quantity required for an individual treatment.

The largest variation of price can be found in the 100mg capsules of AZT. Comparing the lowest price (Thailand, $US 0.37) with the highest (Netherlands, $US 2.06) a difference of 457% is seen.

As the most common formulation competition is high among producers of the 100mg capsules. The injectable form of AZT is not produced by the competitors and its price varies little in the different countries.

Another supplier of AZT - Aids Care Initiative - was identified in the US. The Aids Care Initiative does not manufacture AZT but rather operates as a "middleman" or "Broker". ACI offers 100 mg capsules at a bulk price of 0.28 USD/capsule.

The price of Glaxo Wellcomes' AZT, RetrovirÒ was compared in three different countries. The results illustrate the influence competition has on the price in a given market. Three different market situations have been chosen for this comparison: Thailand, Spain and Germany. The main characteristics of their market situation, specifically concerning AZT, are as follows:

The RetrovirÒ 100mg capsules in Spain and Germany are, respectively, 273% and 339% higher then the same product in Thailand, a market which offers various alternatives of the same product and presentation. There is no alternative product for the injectable form of AZT on the Thai market and the price for injectable RetrovirÒ in Spain is 14% lower than in Thailand; the price in the Germany is double the price in Thailand.

AZT is not patented in Thailand and Spain. The existing competition on these markets appears to be the reason for Glaxo Wellcome to reduce the price of the 100 mg capsules to market levels.

The existence and technical capacity of national pharmaceutical industry in producing AZT locally has played a crucial role in creating competition and reducing the price on the corresponding markets. Reduction of prices can be observed equally, if alternative products are imported.

Different actors are involved in the process of production and commercialisation of drugs. Each of the intervening actors - manufacturers of raw material and the finished product, wholesalers, brokers, hospital pharmacies and pharmacies open to the public - add a mark-up to the final price. The prices of AZT produced and commercialised in Spain are presented below.

Medichem S.A. is the producer of raw material in Spain and was indicated as the supplier of Combino Pharma, Andromaco and others. Spain, like many other countries, has regulations concerning the legal increase of prices at the different levels of production and distribution.

During the course of this study the price of AZT from a variety of sources was seen to decrease significantly in the last year. This is likely due in part to competition from new producers and in part to the introduction of new antiretrovirals, specifically a new drug for the reduction of vertical transmission.

AZT is an essential drug for HIV/AIDS. The high price of this drug in some countries excludes it from the national list for essential drug list and limits its use in the treatment of HIV/AIDS and the reduction of vertical transmission of the virus.

AZT was discovered by the US National Cancer Institute. Its research and development was supported by public institutions and it was granted the advantages of an orphan drug, a private company has enjoyed 12 years of market exclusivity and continues holding the patent until the year 2005. In spite of this, the price of the drug is unaffordable in many countries.

The major determining factor is the existence of alternative products on the market, i.e. competition. The patent situation of AZT in the different countries, the existence of local capacity for pharmaceutical production and the possibility to import alternative AZT products all influence the pricing of the drug in a specific market.

The governments' capacity and willingness to negotiate also plays a significant role. Australia for example has taken an interesting approach for controlling prices and the concern of access to essential drugs. The national health institutions determine the "adequate" price level of a product, using established pharmaeconomic criteria based on the therapeutic benefit. As is shown the Glaxo Wellcome product in Australia is at the lowest price of the economically strong countries in this study.

When governments and/or organisations consider negotiating prices for the bulk purchase of a drug, the modalities of the agreement with the supplying company should be carefully handled and closely monitored. If large quantities are purchased, the agreement should aim at including storage by the supplier or manufacturers. Most importantly, the price should not be fixed. Prices are seen to vary significantly in a short space of time. The agreement should therefore be based upon the total investment made by the purchaser and a commitment from the supplier to provide the drug at the current market price.

The international trade laws governing patent protection of medicines are contained within the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreements of the World Trade Organisation. Within these agreements, certain legal mechanisms exist to compensate for the market monopoly offered by patent protection.

Most AIDS drugs are still covered by a patent and marketed in exclusivity at prices, which render them unaffordable. The possibilities open to countries for the production and import of drugs are determined by the legal environment.

Countries still not compliant with TRIPS should, as a temporary solution, register the products of foreign generic manufacturers.

Countries that already recognise product patents should negotiate an affordable price with Glaxo Wellcome. Alternatively, Glaxo Wellcome could agree upon the granting of a voluntary license for the production of AZT by a national company. If none of these measures are successful, a compulsory license should be sought in order to authorise a national company to import or produce the drug.

1. WHO/UNAIDS AIDS Epidemic Update, December 1998

2. Chirac P, AZT: histoire d'une succes story peu ordinaire, MSF internal report

ref. US patent n°4916122

^3. Guay L et al. Intrapartum and neonatal single-dose nevarapine compared with zidovudine for prevention of mother-to-chilled transmission on HIV-1 in Kampala, Uganda, Lancet 354 (9181), 795-802

^4. Velasquez G, Boulet P. Globalisation and access to drugs: Implications of the WTO/TRIPS agreement. Geneva: World Health Organisation; 1998. Lancet