Former US President Bill Clinton's foundation has reached an agreement with eight pharmaceutical companies worldwide, including India's Cipla and Ranbaxy, to drastically lower the prices of AIDS tests and drugs.
Qualpro Diangostic and Strides Acrolab from India are also involved in the deal.
"With more than one million people on treatment in developing countries, we face a growing challenge to keep costs affordable as we reach out to millions more in need," Clinton said announcing the agreement in New York.
Lauding the companies, Clinton said it would help hundreds of thousands poor people in 50 developing countries across the world. "The action of these companies is another important step in the fight against HIV/AIDS," he said.
As a result of their agreements with the Clinton Foundation, countries will be able to reduce the cost of HIV diagnosis by 50 per cent.
Cipla, Ranbaxy, Strides Arcolab and Aspen Pharmacare (South Africa), which rely on supply of active pharmaceutical ingredients from Matrix Laboratories (India), will offer the Anti-retroviral (ARV) efavirenz for 240 dollars per patient per year, and Cipla will offer the ARV abacavir for $447.
These prices represent savings of more than 30 per cent from current market rates. The supply of efavirenz at $240 by Cipla and Ranbaxy is conditional on certain volume thresholds; for smaller orders, a surcharge may apply, the foundation said.
"Widespread testing is essential to make prevention and treatment work, and making diagnosis cheaper will allow the foundation to extend testing services to more people, more quickly," Clinton said.
Arun Kumar, group CEO and managing director of Strides Arcolab, said his company is committed to supply a comprehensive range of first-line and second-line antiretroviral drugs under the agreement.
"Following this agreement, Strides will also supply first-line ARVs under Clinton Foundation agreements," he said.
Over 90 per cent of the 40 million people living with HIV in the world do not know that they are HIV-infected.
Aggressively expanding testing services is critical to both prevention and treatment, the Foundation said. In order to reach treatment targets, developing nations need to run at least 200 million HIV tests in the next four years.
The rapid test prices will help save tens of millions of dollars in this timeframe. For example, Brazil, which hopes to increase annual testing volume from 3 million to 7 million tests would save more than $10 million in 2006, or 80 per cent from original prices, by buying under these agreements.
Clinton said lowering the price of second-line drugs is a major priority for his foundation in 2006. Treatment, once started, is a lifelong commitment, and over time patients move from low-price first-line drugs to second-line combinations that are at least 10 times more expensive.
Keeping the global cost of AIDS treatment sustainable will only be possible if we lower the prices of these medicines, he added.
First-line treatment of HIV/AIDS in developing countries has relied heavily on four ARVs. These were included in original agreements announced by the Clinton Foundation in 2003, and 240,000 patients across its Procurement Consortium are benefiting today from medicines purchased under these agreements.
The annual price paid for the most common first-line therapy is $136.
The drug efavirenz is used in alternative first-line treatments (in cases of toxicity from other drugs, or when use of other drugs is contraindicated), but its use triples the price of treatment.
When patients become resistant to first-line treatment, it is necessary to use second-line combinations of ARVs, which, in Africa, cost 10 times or more the price of the most common first-line treatment.
Abacavir is one of six ARVs used in second-line combinations recommended by the World Health Organisation. For middle-income countries, the price of second-line medicines is an additional 4-5 times higher than in Africa, and some of these, like Brazil, already spend the majority of their budgets for ARVs on just a few second-line medicines.
In two years, as many as 500,000 patients around the world will be on second-line combinations, making their comparative cost a major challenge facing ongoing HIV/AIDS treatment in Africa and around the world.
Today's agreements on efavirenz and abacavir represent a first step in the Foundation's effort to lower the cost of second-line treatment, Clinton said.
The Foundation is working with its current partner suppliers to reduce the costs of additional second-line medicines.