Evolving markets require evolving market approaches

Brenda Waning

UNITAID/UNAIDS/Medicines Patent Pool Side Event

United Nations High Level Meeting on AIDS

New York

9 June, 2011

UNITAID Goal

Healthy markets, healthy people

UNITAID aims to promote “healthy”, dynamic market conditions whereby manufacturers have incentives to invest and innovate, while at the same time supply quality public health products at sustainable, affordable prices and in acceptable formulations that enable the maximum number of people to access them.

How UNITAID intervenes UNITAID’s role depends upon the particular circumstances in a given market:

• Market catalyst: identifying and facilitating adoption and uptake of new and/or superior public health products;

• Market creator: providing incentives for manufacturers to produce otherwise unattractive products with low demand that yield little profit but substantial public health benefit to those in need; and

• Market “fixer”: addressing severe market inefficiencies (e.g. grossly inaccurate demand forecasts and excessive transaction costs) that contribute to low access to quality-assured public health products.

UNITAID Market impact framework

HIV/AIDS & poor access to antiretroviral

(ARV) medicines

Price negotiation, demand creation, pooled purchase,

information sharing, WHO PQ

High ARV prices from low

demand & lack of competition

More people treated with less money; benefits extend beyond

country recipients

Lower ARV prices, more generic

versions, increase in suppliers,

competition & awareness

UNITAID Intervention example: 2nd line ARV market

Pathway from market to public health impactCase for intervention

Public health problem & commodity access issue

Market shortcomings

& their reasons

Innovativemarket

intervention

Sustainable market impact

Public health impact & Value for

money

Lessons learned from the past 10 years (1)

Environment, market characteristics & interventions

• Industrial structures were “simpler”: innovator vs. generic; Innovator revenues derived from high income countries

• Unprecedented influx of HIV/AIDS funding

• Largely donor-driven, donor-controlled market• Policy harmonization & coordination across donors, organizations

• WHO Prequal & FDA created level playing field around quality

• Intellectual property barriers largely absent for most ARVs

Lessons learned from the past 10 years (2)Environment, market characteristics & interventions

• WHO treatment guidelines drove & consolidated demand• 5 ARVs on 2003 WHO guidelines constituted 98% of ARVs purchased 2004-2006*

• WHO treatment guidelines inconsistent with those in the north (treat at later stage w/ different ARVs)

• Information on market prices available in public domain

RESULT: “healthy” competition, price reduction, assured quality, development of new products (FDC, paediatric) appropriate for developing country settings rapid scale-up

*Waning et al. Intervening in Global Markets…Globalization & Health 2010, 6:9.

*Waning et al. A lifeline to treatment…

Journal of the International AIDS Society 2010;13:35

ARV market share bymanufacturer type, 2003-2008*

39%

80%

64%

83%88% 87%

1%

13%

3%3% 8%

61%

19% 23%14%

9% 5%

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008

Ma

rke

t S

ha

re (

vo

lum

e)

Indian Generic Non-Indian Generic Brand

Overview of ARV market evolution

82% 86%

16%

6%6%

12% 8%

84%

0%

20%

40%

60%

80%

100%

Pediatric Adult NRTI/NNRTI Adult PI

Ma

rke

t S

ha

re (

vo

lum

e)

Indian Generic Non-Indian Generic Brand

2008 ARV market shareby niche &manufacturer type*

Future challenges for tomorrow’s market (1)

Environment, market characteristics & interventions

•Industrial structures more complicated: • Largest revenue growth is in middle-income pharmerging markets• Innovators producing generics & acquiring generic firms• Indian generic firms moving upstream to R&D, biotech• Renewed national interest in local production: collision of economic, industrial development, and public health policies

• Flat-line donor budgets for HIV in the wake of financial crisis

• National governments purchasing more ARVs• New market anchors/powers like South Africa (25% global market) - disaggregated power & market; countries becoming big players• Quality standards no longer harmonized (national vs. global)

Future challenges for tomorrow’s market (2)

Environment, market characteristics & interventions

• WHO HIV/AIDS treatment guidelines becoming more consistent with those in the north• Treat earlier with better but more expensive ARVs

• Treatment as prevention may push treatment even earlier• Use of CD4, viral load and other diagnostics

• Intellectual property barriers for new ARVs• Patents, TRIPS, Free Trade Agreements

RESULT: much more complicated market environment where market interventions used in the past no longer fit. Need to engage new players (innovators, national governments, etc) and develop new approaches to support scale-up

CD4 Product Pipeline*

2009 2010 2011 2012 2013

PointCare

Partec Mini

PIMA

DaktariBurnet

mBio

Zyomyx

Instruments Disposable

*Estimated - timeline and sequence may change; created by Murtagh on behalf of UNITAID 2011

But lots of innovation in HIV diagnostics:

Viral Load & EID Product Pipeline*

2011 2012 2013 2014 2015

Alere

NWGHF VL

NWGHF EID SAMBA EID SAMBA VL

LiatWave 80 EO-

NAT

Gene XPert

Micronics

Biohelix

ALL

*Estimated – timeline and sequence may change; created by Murtagh on behalf of UNITAID 2011

Summary & Conclusions

• Market-based approaches are powerful interventions that support global scale-up of HIV/AIDS treatment

• Success over the past 10 years: price reductions & development of better, quality-assured products

• But the landscape has changed dramatically. Market evolution presents new challenges for the next 10 years

• Need to be forward-thinking, monitoring and anticipating market evolution

•Need new market approaches from donors, international organizations, national governments, generic and innovator manufacturers, NGOs and others to achieve universal access

Thank you

Contact Information:

Brenda Waning

Coordinator, Market Dynamics

UNITAID

Email: waningb@who.int