CHAI Announcement of AIDS Drug Price Reductions

May 8, 2007
New York, NY

President Clinton: Good afternoon, everyone. Thank you for coming. We have good news to share today in the fight against AIDS. Thanks to the partnership between UNITAID and our Foundation, and working hand-in-hand with our governmental partners, we are announcing major price reductions for more than a dozen AIDS drug formulations. They will be supplied by our partners Matrix and Cipla to more than 60 other nations.

I’m pleased to be joined on the platform by Ambassador Jean-David Levitte, who is here on behalf of the French Foreign Minister Philippe Douste-Blazy, the chairman of UNITAID. Also with me are the vice chairman of Matrix Lab, Mr. N. Prasad; and the Ministers of Health of Kenya and Thailand, Charity Ngilu and Dr. Mongkol Na Songkhla.

Thanks to the work of the ministers and people like them around the world, there are now two million people on AIDS treatments in developing countries, a tenfold increase from five years ago. It is a remarkable success, but one we must build on. When we started this endeavor at our Foundation about five years ago, we made a promise to people living with HIV: Once you’re on treatment, we’ll keep the medicines coming and make sure that everyone else who needs them has access. The standard and quality of care of providing treatment in developing countries would be no different than what we expect in places like the United States.

Looking ahead, there are some very stiff challenges to fulfilling this commitment. The second-line drugs, which a small minority of patients need as they develop drug resistance to the initial medications, are even more expensive, about 10 times the price of today’s first-line combination. That’s a very great strain on countries’ health care budgets, and governments fear all over the world that they will simply not be able to keep patients on treatment. The drug combination that represents the gold standard of AIDS treatment in wealthy nations remains almost unknown in developing countries, even though it’s safer and easier to take, and thus better for patients.

The reason is the price. It’s six times the cost of today’s leading drug combination in low-income countries. The prices are simply exorbitant in middle-income countries like Brazil and Thailand. These countries are home to fully half of the two million people on treatment. I’ve seen this with my own eyes in visiting these countries, and I don’t see middle-income patients, but patients without means and in dire need. I see men, women, and children whose daily struggles are no different from those living with HIV in the poorest corners of the world.

Our announcement today responds directly to these challenges and sets the foundation not only for treatment to many more people, but treatment that is more equitable, more affordable, and more effective.

First, we’re announcing initial price reductions for second-line medicines that will generate average savings of 25 percent in low-income nations and up to 50 percent below the price now available in middle-income nations.

This has been made possible by UNITAID, with whom my Foundation is partnering in a $100 million program that will begin buying these medicines at the new prices this July. In partnership with our suppliers Matrix and Cipla, we’re also announcing uniform pricing for all these drugs across countries in my Foundation’s buying club, which now stretches across 66 nations from Peru to Papua New Guinea.

This is very important to me. No company will ever die because of the high price premiums for AIDS drugs in middle-income countries, but patients may. I believe in intellectual property and ensuring that manufacturers earn the profit margins they need to keep the discovery and supply of AIDS drugs sustainable. But that need not prevent us from getting essential lifesaving medicines to those who need them in low- and middle-income countries alike.

Second, less than a year after the launch of an AIDS treatment that is one pill once a day
-- which is so much easier for people to take -- we’re announcing a price of less than a dollar a day for developing countries. This represents a 45 percent savings over the price now available in Africa and up to a 67 percent savings in many middle-income countries. This drug represents the best chance that science has to offer, and we’re announcing this price to help national governments plan for the use of the product in the future.

The good news reflects the work of many partners, and I want to take just a moment to thank them. I’m grateful for the leadership of Matrix and Cipla. They have been wonderful to work with these last five years. Cipla has been a leading supplier of AIDS drugs since we started. Matrix has been the leading supplier of the active ingredients used in making these drugs. Now they, too, have been making pills for patients.

I am profoundly grateful to UNITAID, a new initiative funded largely through an airline levy thought up by President Chirac. We share a common purpose to get drugs and tests to more people by spending money more effectively, changing markets that are low volume, high margin to high volume, low margin, certain payment ones.

I am particularly grateful to our government partners. We can have all of the money and technical know-how in the world, but it’s their leadership and the work of governments and NGOs on the ground that make treatment and turning death to life a reality.

The role of our government partners on today’s agreements was absolutely critical. When you do the math of pharmaceutical production, volume lowers costs. These governments, particularly these who are here, made sure that we had the added demand needed so that the suppliers could lower the prices.

Now, let me introduce the speakers each in turn. We will begin with Ambassador Levitte and go to Mr. Prasad and then to the ministers. Mr. Ambassador.

Ambassador Levitte: Thank you, Mr. President. It’s a great honor to be with you today. It is a moving moment, Mr. President, and it is my honor to read in front of all of you a message coming from Philippe Douste-Blazy, Minister for Foreign Affairs of France, and also the chairman of the UNITAID executive board:

“Ladies and gentlemen, dear friends, President Bill Clinton and I are pleased on behalf of UNITAID and the Clinton Foundation to announce to you today the latest deep reductions in drug prices for people living with AIDS in developing countries. We must address the global health emergency. Some 40 million people are living with HIV/AIDS. This epidemic claims three million lives a year and over six million people are in urgent need of treatment. Countries of the south are its main victims. Nearly 90 percent of new infections occur in developing countries. Two of the deadly diseases, tuberculosis and malaria, are also killing millions of people each year. Yet, treatments exist to fight these pandemics.

“UNITAID, an international drug purchase facility, was established on the basis of that fact. Founded for the most part by proceeds from air-ticket solidarity levies, it is a symbol of a more equitable, socially-minded globalization. Today over 30 countries of the north and south are taking part in UNITAID. It was created in September 2006 under the aegis of the United Nations to further access high quality treatment in the hardest hit and most vulnerable countries. To do so, it provides medicines on the ground and negotiates price reductions with all of the pharmaceutical companies that manufacture effective products.

“Drug prices are still far too high. First-line AIDS treatments cost $150. But more and more patients need what are called second-line antiretrovirals, or ARVs, recommended by the World Health Organization, and they are up to ten times more expensive. At this cost, people in countries of the south cannot afford them. What’s more, second-line ARVs are most often not even sold, as President Clinton just said, in these countries. This situation, this injustice, cannot be tolerated.

“That’s why UNITAID launched a program early this year with the Clinton Foundation to finance second-line ARVs. Some 27 countries have been benefiting from the program since 2007; 33 of them in Sub-Saharan Africa. Thanks to the price reductions, the Clinton Foundation and UNITAID have obtained from pharmaceutical companies a significant amount of treatment covering a substantial part of needs. Seven categories of second-line ARVs will arrive in beneficiary countries starting this July. The pharmaceutical companies involved are patented drug manufacturers such as Abbott, Gilead, GlaxoSmithKline, and Bristol-Myers Squibb, and, of course, generic drug manufacturers.

“Each manufacturer who offers the best price reductions can be selected as long as its products meet quality assurance standards. For instance, UNITAID and the Clinton Foundation are going to buy a heat resistant form of the drug Kaletra, which is one example of the seven types of second-line ARVs to be provided. On average, negotiated prices for these formulations are, as President Clinton just said, 25 percent lower than today’s market prices in low-income countries, and 50 percent lower in middle-income countries.

“But, we still have a lot of work to do. We plan to carry out more price negotiations, including on second-line ARVs, to continue to make drugs more affordable to fight HIV/AIDS, tuberculosis, and malaria. To achieve this, we are going to work with the Clinton Foundation and our other partners, including the Global Fund, UNICEF, WHO, and the Stop TB and Malaria Initiatives. At the same time, other countries need to take action to increase contribution to UNITAID, which is expected to raise $300 million in 2007, and more than $400 million in 2008.

“But let us today remember this date and this important announcement which in addition to proving that our actions are effective provides us with strength to continue our fight together.

“Thank you very much, Mr. President.”

Mr. Prasad: Thank you very much, President Clinton, Ambassador Levitte, other ministers and dignitaries on the dais, and ladies and gentlemen. It gives me much pleasure to be here once again. I was here way back in 2003 when we announced the first-line treatment. Circumstances have prevented Robert Coury, our vice chairman and chief executive officer of Mylan, from being here. I’m here to deliver the message of Mylan. He said we had a good meeting and sharing of information with the board of Mylan, and I’m here to share the vision coming from the dedication of our team and the society and the most important, underrepresented, and undersold population of this world.

It’s truly a pleasure and honor to be among such great and esteemed leaders who worked together to continue and to demonstrate their support to us, and great organizations like the ones here today, UNITAID.

Earlier this year, Mylan acquired Matrix Laboratories, an Indian pharmaceutical company. One of the many reasons which brought our two organizations of different cultures and geographies together was a shared vision to use our scientific expertise, our talent in pharmaceuticals, to address unmet needs in the global health care community, especially the needs in the undersold patient populations like HIV patients. Both Mylan and Matrix have a long-term history of meeting the shareholders’ commitment and the stakeholders’ commitment, which includes society, and today is no exception.

I am proud to stand here today to announce Mylan and Matrix support to the UNITAID program for supplying the five antiretroviral products. We are also very proud to be associated with the Clinton Foundation, which has worked with the company in reducing the cost and improving the efficiencies. I am here to strongly commit to help to continue to divert the cost and to get the drugs into the hands of the many patients who need them. It is difficult to imagine the positive impact we are making to so many lives around the world by our combined commitment toward this important cause.

We believe this is only the beginning of what we are able to accomplish in this area. I will look forward to expanding Mylan/Matrix’s role as a global leader in this area and other areas of need.

On behalf of all employees of Mylan/Matrix, I would like to thank President Clinton for this wonderful initiative to address the needs of this global health community.

I remember when I came here in 2003, the pictures of four great leaders were decorating the room of President Clinton. I still remember the fond memory, and I’m sure today what we are announcing is a great tribute to the spirit of those leaders, and many more whom we have not seen. Thank you very much for this chance.

Dr. Ngilu: Thank you very much, President Clinton, Mr. Mongkol Na Songkhla, Mr. Prasad, Mr. Levitte.

First, I would like to thank you, Mr. President, for making it possible for me to be here with you today. Today’s announcement marks an important step in keeping the cost of HIV and AIDS treatment affordable in countries around the world. In Kenya, 1.3 million people are living with HIV and AIDS, and nearly 300,000 of these are in immediate need of treatment.

Today, because of the initiative that you started, Mr. President, 130,000 people are receiving antiretroviral treatment in Kenya. The government of Kenya, in partnership with the Clinton Foundation, has assured the long-term sustainability of treatment, offering access to its reduced prices for critical communities and helping devise creative strategies for addressing HIV and AIDS at the national level.

Kenya is dedicated to caring for all of these infected with HIV and AIDS regardless of cost or disease progression. In order to fulfill this promise, Kenya must work with partners and suppliers to make sure treatment remains affordable. As treatment increases and especially patients receiving first-line treatment begin to need second-line treatment, the costs of caring for Kenya’s sick increases as well. The cost of providing the gold standard first-line treatment and high-quality second-line treatments included in today’s agreements would be nearly impossible without interventions of UNITAID, the Clinton Foundation, and the suppliers here today.

Thanks to your work, when patients look to the government for the drugs they need to save their lives, we will be able to respond. I thank all of those involved in today’s agreement for making sure that the best available treatment, the very drugs you provide to people living with HIV and AIDS in New York, is also available to people living HIV and AIDS in Kenya.

Making high-quality, desperately needed medicines affordable is an imperative piece of making treatment sustainable. Together we will be able to help all of those in need in Kenya and around the world live longer, healthier, and happier lives.

Before I just say thank you, Mr. President, I want to remind you of your visit to Kenya and remind you, Mr. President, that when you came to Kenya three years ago, we had only 2,000 children on treatment. Because of this intervention and initiative, Mr. President, we now have 12,000 children on treatment. We should be giving about 8,000 treatment; I do believe after today, we should be able to reach that.

Mr. President, at the time you visited Kenya, we had only about 35,000 adults on treatment. Today, Mr. President, we have 130,000 Kenyans on treatment. This is an achievement that we never thought we would realize. Therefore, I thank you very much for this initiative and for the support of Kenya. Thank you very much.

Dr. Mongkol: Thank you, President Clinton, and good morning, ladies and gentlemen. Like other middle-income countries, Thailand has huge income disparity and a large number of low-income people. We have five million people living under poverty and 48 million under the Social Welfare Health Insurance.

Through our commitment to universal health care, the Thai government has increased the health budget from the mere four percent of the national budgets in the 1980s to more than 10 percent in 2007. This year, the new government has increased the budget for the universal health care by 15 percent, and for the universal access to AIDS drugs by more than 30 percent. That commitment has helped us to provide effective treatment to more than 100,000 people living with AIDS. AIDS is no longer a death sentence in our country. Tens of thousands of our people who would otherwise be gone are healthy and caring for their families.

However, the excessively high drug prices have often obstructed us from achieving universal access. Out of 100,000 patients on treatment, 70 percent do not have access to safer drugs like Efavirenz. Of around 10,000 patients that require second-line drugs, less than 15 percent of them have access to it.

If the best available drugs are too expensive, we must choose between putting more people on treatment and providing the most effective medicine for those who are already on treatment. The new price announced today will help ensure that Dr. Ngilu and I and our many other colleagues across the world will no longer have to make that choice.

Ladies and gentlemen, Thailand has the experience of getting high-quality drugs at much lower prices through the system of pooling demand and collective bargaining at the provincial and national level. We have been waiting eagerly for some organizations to organize and manage a global system. The Clinton Foundation and UNITAID have made our dream come true.

Through the new prices achieved by President Clinton, UNITAID, and their partners in industry, we can have three times more of the current access figures. With more resources, the real universal access is not too far. I am also pleased that by working with President Clinton and his Foundation to pool our large purchases of these drugs with those from other countries, we will be able to help further lower the price of these essential medicines.

Ladies and gentlemen, I come here to reiterate words of the famous inaugural speech of the late, great U.S. President John F. Kennedy: We are not coming here to do today to ask what Americans can do for us. We come to commit our collective effort to bargain for high-quality and lower-priced drugs in order to free the patients from their catastrophic illness.

Finally, ladies and gentlemen, I would like to express my sincere appreciation of thanks to President Clinton and all of the leaders who are here and not here today that have been supporting the attempts to increase the access to high-quality, low-price essential medicines. I do strongly believe that together we shall survive. Thank you, Mr. President.

President Clinton: Give them all a hand. I would also like to recognize and thank all of the people who are here who work on our AIDS initiative who do all of the work that makes these events possible. I thank you so much. Now, are there any questions?

Speaker: As I’m sure you know, and as the prime minister is intimately acquainted with, there is a lot of conflict over these second-line drugs in middle-income countries, particularly … [inaudible]. Are you hopeful, and I’m interested in hearing from both you and the Thai minister, that this will strengthen the hands of middle-income countries about issuing licenses, and will they be needed to access these lower prices? And I guess my second question is: The U.S. has been negotiating these free trade agreements with Colombia and Thailand with the TRIPS-plus portion in them. If those were adopted, would it make it more difficult to access those prices that you’ve negotiated?

President Clinton: Well, I will let the minister speak, the Thai minister. But let me first say, I strongly support the position of the governments of Thailand and Brazil and their decision after futile negotiations to break these patents. I mean, this is not rocket science. When we negotiated the TRIPS agreement in the first place, the whole spirit of it was that no one should die because of the patent process. No country has been more generous to its pharmaceutical companies than the United States. This is the only country in the world where you can get a patent and return it for absolutely no price restraint whatsoever. Fifty-eight percent of the new drugs we have approved in our market were developed not by the pharmaceutical companies, but by taxpayer funds through the National Institute of Health or through grants to university research programs, and then licensed back to the companies.

Now, I’m glad we have these companies headquartered in our country, and as you heard from Ambassador Levitte, I am very grateful for the participation in this announcement of many of the traditional pharmaceutical companies. We try whenever we can to work with them. But Abbott has been almost alone in its hard-line position here over what I consider to be a life-or-death matter; so I support them. Now, it is my understanding that the TRIPS-plus language would permit the middle-income countries to do what is being done by Brazil and Thailand. If I am wrong, I stand to be corrected, because I’m not in government anymore, and I haven’t actually read it. But that’s my understanding. Mr. Minister, would you like to address that?

Dr. Mongkol: In Thailand, we have to be responsible for the people under the National Health Security Act. We have to provide health services to the people free of charge. There are more than 48 million people under our responsibility. Even though the government increased the budget more than 15 percent on average per year, last year the health sector increased by more than 10,000 patients the second largest after the educational sectors.

But it’s not enough for our people. Some very high-priced medicine is not accessible for our people. We have to do something. We can’t let our people die without any treatment or any dignity as human beings; so we try our best. After difficulty with the drug company for more than two years, we had to do the compulsory licensing to save our people’s lives. I tried to ask them 100 times, please let me do something for the people, especially for the people when they cannot get any response after asking for it for more than two years. So lastly, to save the people, we need compulsory licensing.

President Clinton: Let me just make one other comment about this. It’s not as if the Thais and the Brazilians didn’t negotiate and try to work this out. But for those of you in the press who may not follow this as closely as Ms. Dugger does, let me just review the facts here. Just a couple of years ago, when our Foundation got into the pediatric medicine field, there were 500,000 kids a year dying of AIDS. There were 25,000 children getting medicine; 15,000 of them were in Thailand and Brazil because they were middle-income countries, and these countries had a passionate commitment to keeping these kids alive. In the whole rest of the world, you had 10,000 kids getting medicine: China, India, all of Africa, all of the Caribbean, everywhere; 10,000 kids with 500,000 dying. By contrast, we had by that time gotten up to roughly one in six people that needed the medicine to stay alive who were adults.

So we actually went out and raised the money from private donors to double the number from 10- to 20,000 in the first year. It sounded great. It was a surefire applause line to say: “We doubled the number of children on treatment in a year.” Everybody would clap.

And then I’d say, “Why are you clapping? We are at 20,000 people with 500,000 dying.” This is a big deal. I don’t think it’s a close question. It’s not just Brazil and Thailand. It’s the effort to get these prices down and make them widely available so that huge numbers of children beyond their borders can live. It is truly, as the minister said, a life-or-death issue.

Speaker: One thing you didn’t mention was PEPFAR.

President Clinton: We work with PEPFAR and all of the countries where our efforts overlap. Let me just explain how I think this works and perhaps one of the ministers would like to comment. We sell the medicine in 66 countries but our Foundation has actual health care operations in 25 countries. In those countries where we operate, if PEPFAR is also present, we work with them. In the countries where we just sell medicine, the position that President Bush took was to present our generic drugs to the FDA, allow the companies to present them; and if our local FDA approved them, then PEPFAR funds could be used to buy them in the countries in which PEPFAR is active.

Now, our experience is that that commitment is somewhat uneven, but where it’s carried out, we’re only too happy to have those funds be used to buy the least expensive drugs in the world, because they save more money. Every place we work with them, we do, and there are many places where we do. Anything else?

Speaker: Can you comment on the price -- [inaudible].

President Clinton: The main problem we have with the AIDS crisis in America is that the infections are going up in certain selected communities, primarily among minority females who are primarily infected by their male partners, many of whom themselves became infected either because of drug addiction or because of incarceration. We need to make sure that we can identify in every community these trends when they come up, and then step up our prevention and testing programs. We have the treatment in place if we can do this. Now, there are one or two places in America where we have had some treatment problems, which is why Congress had that big debate, which was not so good for New York, to reallocate some of the funds because of the deficit and the other competing demands and Iraq and Afghanistan and elsewhere. They didn’t want to increase the overall amount of money we were spending on medicine in the United States. The population of increasing infections was found in urban areas all across the country, including in the south, where we showed some pretty alarming spikes for the first time.

So the Congress wanted to reallocate the existing funds rather than just spend a lot more. But since we still have such a big problem in New York and California, some of the states that would have lost money fought it; not because we didn’t want more money to go to those poor folk, but because we thought we ought to raise the ceiling of what was being spent.

But the main thing is whenever people think a problem is over and it’s not, you’re always going to have backsliding. This is not just true in AIDS, but in any health issue and in any other kind of social problem. Whenever people think a problem is over and it’s not, then we stop paying attention and we take our eye off the ball. We lessen our prevention efforts, we lessen our education efforts, we lessen our testing efforts, and you get these kinds of problems. Plus, we have more people spending longer times in prison. When they come out, they are more likely to be infected, and they are quite likely not to know it. We also need to be doing more work within the prisons on this.

We forget sometimes, we Americans, that 90 percent of the people who are incarcerated are going to get out. We don’t spend enough time keeping them educated and getting them trained and getting them jobs when they get out and getting them healthy, and that’s a big problem, too.

Speaker: Are other countries joining, and why isn’t the United States a member?

President Clinton: Well, I think the United States is not a member because it contributes its per capita allocation -- which is about 30 percent -- to maybe a third to the Global Fund on AIDS, TB, and Malaria; and because the PEPFAR fund is at $3 billion a year and a lot of that money does go to medicine. I think about 55 percent goes to medicine -- is that right, everybody? I think about 55 percent of the PEPFAR money.

Now, that money doesn’t go as far as ours does, because they spend a lot more than we do on most of their medicines. Perhaps Ambassador Levitte could tell us, but there are 19 countries now along with France participating. France is by far the biggest donor because they impose a small fee on all domestic and intra-European flights for coach, and a slightly bigger one for first class and business class. Then they impose a slightly bigger fee and the small fee for international coach flights, and then about 40 euros for flying first class internationally. They have raised the bulk of this money.

Our early partners, as I remember, were Chile, Brazil, Norway, and maybe South Korea. But now there are 19 other countries. I do not know how many of them have the airline levy. But I think that any other country that wants to participate in this knows that we have low overheard, high impact. The money put into this is just for the medicine, although it’s not just AIDS. They also buy medications and treatment for TB and malaria.

This has enormous potential because it’s like a special purpose tax. Every time a French citizen or someone in France flying out of France buys an airline ticket, they know that 100 percent of this money is going to save lives. How many countries do the airline tax like that?

Ambassador Levitte: You said it, Mr. President -- 19.

President Clinton: But some have given you money that doesn’t come from the airline tax?

Ambassador Levitte: Yeah, the U.K., for instance, is contributing to UNITAID without taxes.

President Clinton: The United Kingdom, for example, doesn’t have the tax. They just give them an allocation every year. But I hope there will be more countries participating in this. The one thing you can’t fault the Bush Administration for is not spending money on this. The reason they didn’t contribute to UNITAID is they already give about somewhere between 30 and 33 percent of the Global Fund money and the PEPFAR money on top of that. Anything else?

Speaker: I wanted to follow up with the Thai minister. Has Abbott continued to insist on withdrawing the application for those other medicines because of the compulsory license on Kaletra? And what impact do you think this announcement today may have on that process?

Dr. Mongkol: Abbott Laboratories and the team of the Thai Ministry of Public Health right now are in the process of negotiation. I think that we can meet the certain agreements not later than next month.

President Clinton: Do you have a question?

Speaker: I have a question for Mr. Prasad. I just wanted to know if he can tell us a little bit more about how you are going to use lower prices -- [inaudible]? For production process?

President Clinton: Did you hear the question?

Mr. Prasad: Yes.

President Clinton: His hearing is better than mine.

Mr. Prasad: It’s a collaborative approach with the Clinton Foundation. It’s very easy to speak to the reduction of the prices, but the effort has [inaudible] with the Clinton Foundation team. They have not only helped us in sourcing very effective antiretrovirals, which is very scarce to get for these products, but they have also helped sometimes in reducing the cost in the chemical process. Finally, the Foundation could help us actually to get the volumes that could dilute the cost. It’s a combination of all these three efforts that has really brought down the cost.

President Clinton: Before we go, I just want to say one other thing to our friend from Kenya here. If the rest of the world doubts whether the right sort of assistance can make a difference in people’s lives, let me remind you of what’s happened in Kenya in just the last couple of years. They, as you heard, increased the number of children getting pediatric AIDS medicine by sixfold and the number of adults by fourfold. While they were doing this, they dropped the school fees and increased school enrollment by two million children. Miracles are going on there. They are doing a good job with the aid they have been given, and if we give them more, they will do a good job with that -- and they are not alone.

When the people really want to give up on the poor countries in Africa or East Asia or Latin America, tell them the numbers in Kenya. I’ve visited with some of those children as well as some adults who went back to school. It’s an amazing story. Either one of these revolutions would be significant in and of itself. That a country can come so far, so fast, on both education and health care is a testament to how much good things like the French airline tax can do. I’m glad that we can help to make the money go a little further. Thank you very much. Have a good day.