Medicine price rip off: Drug that cost R700 to make sells for R1m in US

Pills or antibiotics
Pills or antibiotics

For 50 US dollars (R699)‚ patients around the world have been cured of the once deemed incurable disease Hepatitis C. However the same cure would cost $10 000 (R140 000) in the private sector in South Africa and in the United States the price is $100 000 (R1.4-million).

New data released at the World Hepatitis Summit held in Sao Paulo‚ Brazil‚ this week shone a spotlight on one of the most controversial areas of medicine pricing: Hepatitis C drugs.

Speaking at the summit on Thursday‚ University of Liverpool pharmacologist Andrew Hill explained that a tandem of drugs‚ Sofosbuvir and Daclatasvir‚ used together as a cure for Hepatitis C have widely discrepant prices in different countries. The two drugs cost about $78 in India‚ $174 in Egypt‚ $6 000 in Australia‚ $77 000 in the UK‚ and $96 404 the USA - more than a million rand.

In some countries‚ people who cannot afford the first world prices of the medicines join together to make "international buyer's clubs" and import generics from manufacturing countries in order to be cured.

Hill explained that manufacture of the drugs‚ the active ingredients‚ the packaging costs and a tiny profit margin came to about $50 per course.

Hill's study looked at 1 160 patients who imported the generic drugs in 88 countries. The cure rate was above 90%‚ almost the same rate as the original expensive products.

His point was that generic drugs can provide a cure for about 70-million people with the Hepatitis variant worldwide‚ but remain out of reach for most because of high prices.

University of Cape Town hepatology professor Mark Sonderup said doctors have treated more than 150 Hepatitis C patients in Cape Town's Groote Schuur hospital using the new drugs. Nearly all have been cured in 12 weeks.

The two drugs are not licenced in South Africa but can be imported under a special permit. The generics of Sofosbuvir and Daclatasvir can also be accessed.

Sonderup estimates the drugs cost $10 000 in the private sector and in the public sector go for $1 000 for a 12-week course. He said there was "room for improvement in prices".

The Hepatitis drug debate has really brought the global debate on medicine pricing into the spotlight‚ The Lancet Commissions Report on Medicines reported.

It was estimated that treating all patients with Hepatitis C in the United States would cost $65-billion over five years. The cost of $84 000 just for Sofosbuvir in the US even lead to an investigation by US Senate Committee of Finance.

Paying for these drugs has tremendous "budget implications" in high-income countries - but in poor countries‚ prices are "even more daunting"‚ said The Lancet's report. Sofosbuvir was invented at a university but brought to market by a private biotech firm with the skills to do so. The Lancet estimated it only cost them $200-million to do this. The firm was bought by Gilead Sciences for $11-billion.

The Lancet Essential Medicines report revealed that "within 1 year of introducing the medicine (Sofosbuvir)‚ Gilead Sciences Inc. had recouped the initial expenditure of $11.2-billion; the patent will not expire before 2024". This patent on Sofosbuvir means prices will not come down for the cure in every country even though Gilead has recouped its investment.

In South Africa‚ the Treatment Action Campaign has called for discussion and law changes where medicine patents render life-saving medicines out of reach‚ especially where patents are extended in South Africa above 20 years as can be the case.