JOHANNESBURG - Last week's launch by Minister of Health Zweli Mkhize of a new ARV triple drug regimen in the Ugu district in KwaZulu-Natal and the commemoration of World Aids Day allows us as a country to reflect on how successfully we’ve managed what is arguably one of our country’s most complex post democratic challenges, HIV/Aids.
While much room remains to further strengthen a number of areas in our highly acclaimed public ARV programme, one cannot argue against the facts and these remain the following:
Life expectancy has increased from a low 53 years in 2004 (when ARVs first started to roll out in our public sector) up to an impressive 66 years today. Few government-led programmes have had this level of success or impact on society and its citizens. This can be directly ascribed to ARVs and other interventions such as male circumcision and the prevention of mother-to-child transmission, with ARVs being the biggest contributor to this impressive statistic.
Today, an estimated 5million South Africans are taking ARVs, 4.7million of those receiving ARVs through the public sector, making the South African public programme six to seven times larger than the next largest global programme. This takes some management by the government, making 4.7million patient treatments available month in and month out. Somewhat of a logistical feat, matched by few other government departments.
This made it possible for us to dream of meeting targets such as the UNAids 909090 target to help end the epidemic by 2020, ie 90percent know their status, 90percent of these are on ARV treatment, and 90percent of these are virally suppressed.
This was, however, not always the case. Dreams were turning into nightmares, helplessness contracting HIV was a de facto visit to death row. Turn the clock back two decades with 350000 mainly young South African lives perishing annually from the pandemic, it would not be an exaggeration to overstate the calamity and gloomy future we faced then.
Those were difficult, polarising days, often pitting civil society and parts of labour against parts of our government. Those acerbic times called for practical and evidence-based leadership and solutions. However, there was a small matter of the cost of ART (antiretroviral therapy), which had to be provided as triple therapy in those days at an annual cost of $10000 (R146192) in the US, clearly unaffordable to most South African patients, even many of those in the private sector. So where to, was the burning question?
Were we to look on helplessly and watch the next generation disappear before our eyes?
Aside from the prohibitive price tag at the time, an even bigger uphill battle lay in getting ARVs recognised as the first treatment point, something we take for granted these days. The battle lines were drawn. Solve the pricing issue and you were in with a fighting chance.
Another small matter - these products were all patent protected and intellectual property (IP) is sacrosanct for R&D-based pharma, who held the patents. At the time some argued for compulsory licensing, which would leave investors numb and others called for patent busting, equally unpalatable to investors, particularly foreign investment, who often rely on a balanced IP regimen as a key consideration in their investment decisions.
It is when our backs are to the wall that South Africans tend to excel, coming up with innovative solutions at times of crisis. When the history of our remarkable country is written covering this period, much acknowledgement should be given to the TAC (treatment action campaign) and the courageous stance of their leaders Zackie Achmat, Mark Heywood and others, the role of our competition authority, the tireless clinical activism of people like Professor Francois Venter and the HIV clinicians society. They paved the way for a long-last solution.
While this was ongoing Aspen, in those days a fledgling and recently JSE-listed minnow, began grappling with how we could positively contribute to solving the vexing HIV problem. The answer was obvious do what you do best, produce quality generic ARVs at accessible pricing without breaking patents.
Not for the first time, critics wrote us off, saying that this was neither possible nor realistic. Patents were in place and consequently prices could not come down. Other sceptics stated, as they did when we acquired SA Druggists 18 months earlier, that this management team would be better off taking their medication for delusion rather than trying to sell it to the market.
Spurred by the need to find a solution that would prevent the unfolding HIV catastrophe and possibly by some of the scepticism Aspen, encouraged by the changing landscape at the time, entered into discussions with multinational R&D partners with a view to finding a win-win solution for all the parties, particularly patients who were fast running out of time on the proverbial clinical death row.
It was not uncommon at that time for Aspen management, when discussing the looming crisis with multinational partners, to recall the hopeless plight of HIV patients that presented at public clinics around our country, no more so than an example we often referenced, the Engcobo clinic in the Eastern Cape that former president Nelson Mandela had asked Aspen founder and group chief executive Stephen Saad to assist revamp - around 80percent of patients at the time presented at the clinic with suspected HIV/Aids or tuberculosis.
Engcobo struck a nerve with many, including some of our multinational partners. These discussions paved the way for the first-ever voluntary licences and later manufacturing arrangements for generic ARVs.
Our first generic ARV, Aspen Stavudine, was launched by then-Minister of Trade and Industry Alec Erwin, in 2003, with some in the Health Department in those days still unaccepting of ARVs. This proved to be a landmark moment for the company, for management of HIV in our country, a South African-pioneered solution, by a South African company for what was rapidly becoming an epic African problem.
It was not long before licences were negotiated for the other two ARVs in the first-line triple therapy regimen at the time, causing prices to reduce to the much more accessible annual $185, down from the US-based $10000. This accelerated the South African public programme, attracting other generic entrants over time, to the point were there are now more than 14 suppliers of ARVs listed as suppliers to the South African ARV programme. Although this led to significant volume uptakes from these products, which assisted with building factory scale, this remains one of Aspen’s proudest moments, pioneering a South African solution that made generic ARVs accessible to patients.
The most pleasing aspect has been how hope was restored to the next generation who carry the hopes and aspirations of our country.
Of course the nature of the ARV business is very different today, with an ever increasing need to keep scaling up to meet global and domestic targets, with our own target to have around 7million South Africans on treatment by the end of 2020.
Around 70 to 80percent of the cost of ARVs resides in the so-called API (active pharmaceutical ingredient), the part of the medicine responsible for the therapeutic effect.
South Africa does not produce its own ARV API, leading to a situation where Asian API suppliers to South African companies land up competing with local companies on the formulations. In other words, the API suppliers who supply you and determine up to 80percent of cost are also your competitor.
They clearly hold most of the cards. Little surprise, therefore, that our country is importing more and more finished-dose ARVs at the expense of local capacity, worsening an already deteriorating trade deficit in the sector which now, coupled with medical devices, is the fifth-largest contributor to our current account deficit. This is causing immense indigestion among rating agencies, but no doubt more locally produced medicines will cure some of the rating agencies’ indigestion.
Fine for anti-indigestion therapies, but for ARVs, the single most-consumed pharmaceutical products in our country, we are losing the battle with a growing number of imports at the expense of local capacity. Earlier I was at great pains to track back in time the institutional memory of how our country got on the path of rolling out ARVs. Like losing institutional memory, capacity, once it’s wiped out from the South African market, will be difficult to restore.
A far more sensible approach that we’re discussing with the government is how do we work back from our existing formulation capacity, grow this to the 7million pack a month that the country needs and find a solution to the API problem by getting the government to procure the API through a tender process, giving it access to competitive API pricing as it now balances the API playing field and can enter into long-term arrangements with local producers, reattaining and expanding domestic formulation capacity, denting some of the trade deficit that disfigures the sector’s trade stats.
Not only does this save domestic capacity, but it presents an opportunity to bring black industrialists into the sector, who put forthrightly are few and far between in it. This approach allows our country to retain the institutional memory, retain and grow domestic capacity and open up sectoral opportunity.
Institutional memory with proven track records is the best way to ensure supply security into the future, particularly when you can’t afford to drop 7million patients. For this reason Aspen recently made it its intention to source API through a South African-based, Laurus-owned company and to toll-manufacture ARVs at its Port Elizabeth base flagship facility.
Solving the API issue and ensuring we continue to manufacture domestically creates the best win-win for all concerned, particularly patients and the government that have to ensure security of supply. As we commemorate World Aids Day, we need to look to local solutions in retaining and expanding our local ARV capacities.
Stavros Nicolaou is a group senior executive of Aspen Pharmacare Holdings and chairperson of Pharmisa pharmaceutical manufactured in SA.
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