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Reportage. Italian drug regulators what to eradicate hepatitis C, but the plan can only work with the cooperation of drug companies who hold patents on the antivirals. Treatment for hepatitis C costs €14,000 per therapy in Italy and up to $84,000 in the U.S.

The battle of the active ingredients

The Italian drug agency (AIFA) has published new criteria that will regulate hepatitis C patients’ access to new antiviral therapies that are effective against the disease in 90 percent of cases. The stated goal is the eradication of the disease, which currently affects about 1.5 million Italians and causes 10,000 deaths a year. But in reality, the government only makes resources available to treat a portion of those affected.

The “eradication plan,” as defined by AIFA Director General Mario Melazzini, plans to treat 240,000 patients over the next three years, taking advantage of the €500 million per year allocated under the new budget. That amount provides about €6,000 per patient, destined mostly for the purchase of drugs that since 2014 have given the hope of recovery to about 130 million sufferers worldwide.

The decision on new criteria comes at a delicate moment for the fate of the sick. In recent weeks, the AIFA and pharmaceutical companies have entered the decisive phase of price negotiations. In the past three years, the market was dominated by a single company: Gilead Sciences, which holds the patent on the active ingredient, sofosbuvir. Gilead’s global monopoly guaranteed stratospheric profits for two or three years. With approximately $14 billion in revenues, sofosbuvir (marketed as Sovaldi and Harvoni) became the second drug by sales volume in the world, according to 2015 data.

That dubious statistic is not only due to the number of patients, but mainly to the high price imposed by Gilead on public health systems and insurance companies in places like the United States, where there is no real public health system. In the U.S., sofosbuvir reached a record price of $84,000 for each treatment, which lasts about three months. In Europe, however, where the public health systems have calmed the price, treating hepatitis is a bargain.

In Italy, the cost to the state was established in a secret agreement between AIFA and Gilead, of which there are only summary figures.

The agreement stipulated that the price of sofosbuvir decreased as the number of patients admitted for treatment increased. Therefore, for the first patients treated in 2014, the state spent about €40,000 each. At the end of 2016 the drug had reached almost 70,000 patients, and the price of each treatment was down to about €4,000. On average, therefore, in the period between 2014-2016, Italy paid €14,000 for each therapy, the lowest price in Europe. But that’s still a large amount, which forced AIFA to restrict access to only the most serious cases, identified under seven categories. At the end of 2016, the agreement with Gilead expired, and the terms are being renegotiated, including for the new drug Epclusa.

Under the new guidelines, the categories are up to 11 and now include even patients in whom the symptoms of the virus are still not fully confirmed. Melazzini wants to triple the number of treatments with these new criteria, as long as the economic resources allocated are sufficient. On this, though, there are many uncertainties; AIFA keeps a tight lid on trade agreements with pharmaceutical companies.

Gilead and AIFA have not reached a deal. This was confirmed by a note from the company dated March 10 saying it “regrets that despite their own efforts in the negotiations for the renewal of the Sovaldi and Harvoni contract, it has not so far been possible to reach an agreement with AIFA for repayment of the two drugs.” In fact, Sovaldi and Harvoni are currently classified as “non-refundable” drugs by the national health system.

So how can AIFA promise universal care without an agreement with Gilead for its drug supply?

The AIFA gamble so far has been based on two possible strategies. On the one hand, Melazzini said he was ready to violate Gilead’s patent. “If you do not agree to cut prices,” he said in February, “we might ask the government as a last resort to implement the TRIPS international agreements of 2006, which in the event of public health emergencies allow members a compulsory license.” Under international law, the value of the patent monopoly is not absolute.

TRIPS, the World Trade Organization agreements signed in 1994, provide that in cases of particular public health emergencies, states can grant “compulsory licenses” and also produce a drug without the an agreement with whoever holds the patent. The clause, not initially envisaged in the treaties, is the result of a battle won by the associations of HIV sufferers in South Africa at the end of the 1990s against the excessive prices charged for patented life-saving drugs by pharmaceutical companies. In rare cases, however, industrial countries have also benefited from this clause. The U.S., for example, also threatened to force Bayer to lower the price of ciprofloxacin in order to respond to any bioterrorist attacks.

For a country like Italy, to issue a compulsory license on a profitable drug would be a declaration of war against pharmaceutical companies, with predictable and heavy reprisals. Italy, by the way, is a candidate to host the coveted new headquarters of the European Medicines Agency in Milan, which after Brexit will have to leave London. The competition is great, especially from Vienna and Amsterdam, because the agency’s headquarters will lure other important services. The government would hardly like for that decision (scheduled for September 2017) to come in the middle of a conflict with the pharmaceutical industry lobby.

The other, more realistic strategy is to exploit competition with other new drugs. In fact, other pharmaceutical companies are putting on the market new hepatitis molecules with the same effectiveness of sofosbuvir, such as AbbVie’s Viekira Pak and Zepatier from Merck. It is likely, therefore, that Melazzini is leaning toward an agreement, if he has not done so already, with several companies apart from Gilead. The profit expectations of the latter, therefore, are likely to decline. That’s what investors are anticipating; shares of Gilead on Wall Street are today worth $68, nearly half the record high reached in 2015.

Melazzini hopes to stop medical tourism, mainly to India, where care costs only $600. But it could widen the phenomenon of personal importation, where a major legal precedent was established. A court in rome granted a Milanese pensioner the right to import sofosbuvir on the web, arguing that importation for personal use does not violate the law. Self-medication is certainly not recommended practice, but in the face of desperation a patient will resort to desperate measures.

About hepatitis

Hepatitis C is a viral infectious disease identified in the 1980s and transmitted via blood contact with an infected person. About 130-150 million people in the world are infected. In Italy, 1.5 million people have the disease, with 10,000 deaths and about 1,000 new cases each year. The principle cure for hepatitis C have been liver transplants and interferon, effective in 60 percent of cases and with heavy side effects. But since 2014, medicines based on sofosbuvir have been placed on the market, consisting of a daily pill for about three months, with a success rate of 90 percent. Other similar medications have been on the market since 2016. In Italy, access to new therapies was limited to about 67,000 patients, according to data updated March 6, selected according to guidelines issued in 2014 by the Italian drug agency. In most cases, patients selected for treatment have fibrosis (18,000) and cirrhosis in the early stages (44,000).

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