UNICEF and ARVs Alan Court Supply Division

1
UNICEF and ARVs Alan
Court Supply Division
For every child Health, Education, Equity,
Protection ADVANCE HUMANITY
2
ARV PROCUREMENT
3
Total procurement of ARVs through UNICEF was
18.2m for 2004 to 39 countries
4
Total 2004 procurement of supplies for HIV/AIDS
through UNICEF was 26.3 m, including laboratory
equipment but excluding medicines for
Opportunistic Infections
5
UNICEF has 35 1-2 year purchase arrangements for
ARVs and diagnostics
17
18
Originators, generics, distributors
6
Guiding Principles form the basis for UNICEFs ARV
supply strategy

• Support Global Policies to ensure equitable,
  sustainable availability and access to basic
  essential drugs
• Follow WHO guidelines incl. Model List of
  Essential Medicines.
• Focus on PHC hard to reach populations
• Assure technically sound procurement
• Assure cost effectiveness through international
  competitive bidding

7
Main complexities in procurement of ARVs lie in
international/national law, registration,
availability, secure supply chain systems and
patient compliance
Demand
Forecast
Availability
Patents Registration
Funding
Procurement
Systems
Compliance
UNICEF Supply Division February 2003
8
20 of medicines in some markets are of poor
quality

• Substandard and counterfeit drugs continue to
  kill
• Poor quality drugs circulate freely in many
  countries
• In some countries, the operational regulatory
  body is still weak
• UNICEF is a partner in the WHO Procurement,
  Quality, and Sourcing project (WHO-prequalificatio
  n)
• UNICEF only procures WHO-evaluated diagnostic
  equipment

9
WHO-prequalification project
Set up in 2001, to facilitate procurement
of Quality, efficacious medicines Evaluations
based on WHO Expert Committee on Specification
for Pharmaceutical Preparations
WHO monitors the quality of products that have
already been prequalified May lead to
withdrawals or delistings Eg. 2004 Contract
Research Organizations (CRO) used by Cipla,
Hetero, and Ranbaxy found non-compliant with GCP
and GLP practices.
10
83 of ARVs procured by UNICEF in 2004 were
destined for Africa
Stockpile for rapid response to LDCs
Figures in million US
11
UNICEF ARV procurement is predominantly for
procurement services customers - NGOs,
Governments and UN

• UNDP (funding from GFATM) 4.2 m. in 2004
• Columbia University (MTCT)
• 0.9 m. in 2004
• Elisabeth Glaser Paediatric AIDS Foundation
• 5.2 m. in 2004
• PEPFAR
• 0.7 m. in 2004

4
Dedicated Team of 10 staff
12
UNICEF is heavily focused with partners in the
development and purchasing of pediatric ARV
formulations
50 of children with HIV/AIDS die before the age
of 2

• Paediatric ARV dosing schedules are not available
  for some drugs, e.g. efavirenz (EFV), tenofovir
  (TDF).
• Require frequent doses of unpalatable syrups
• Many need cold chain storage have limited shelf
  life and stability once opened
• Relatively costly although the Clinton Foundation
  is working on reduced prices
• No prequalified FDCs

Buy currently available products to jump-start
the paediatric formulations market and leverage
for better products
13
SUPPLY MANAGEMENT
14
Procurement of ARVs has to be seen in the context
of the inter-related steps of the complete supply
chain
Demand Creation
Product Selection
Monitoring
Forecasting
Effective Use
Financing
Receipt, Storage, Distribution
Quality Assurance
Product Procurement
Supplier Agreements
15
Quantification of needs and Security of product
storage and distribution are two key initial
elements of Country Office focus on building
national capacities
Demand Creation
Product Selection
Monitoring
Country Office
Forecasting
Effective Use
Financing
Receipt, Storage, Distribution
Regional Office
Supply Division
Quality Assurance
Product Procurement
Supplier Agreements
Quantification
Security
16
Supply response to ARVs is complex and requires
appropriate procurement, supply and logistics
capacity at global and local levels

• Forecasting ARV demand has no history and is
  dependent on patient testing and acceptance
• Secure delivery to treatment sites is essential,
  recognizing that ARV value is a significant
  temptation for poorly-paid health workers and
  local logistics personnel
• Zero tolerance on ARV stock-outs is required to
  avoid any interruption in treatment
• Patent and registration situation needs to be
  clear in each country
• ARV supply must be accompanied by timely
  availability of test kits and supporting lab
  equipment and supplies

Continuous monitoring Logistics
arrangements Copenhagen stockpile,
1.6m Patents review Comprehensive supply plans
17
PATENTS AND PRICES
18
Supply Division, with UNICEF Country Office
support, researches IP and registration status in
each country where it supplies ARVs, taking into
account WTO/TRIPS safeguards
NATIONAL PATENT OFFICES
SUPPLIERS
Information on developing country pharmaceutical
patents in the public domain
ACADEMIA, NGOs eg MSF, UN AGENCIES
No single 100 reliable source exists, even at
supplier or national level.
19
UNICEF has a clear position on patents

• We respect patents and recognize that these fall
  under national jurisdiction in both the country
  of origin as well as the country of use
• Our main concern is for the quality of products,
  in terms of efficacy (bio-equivalence)
• We support the use of TRIPS safeguards as needed
• exceptions which facilitate marketing of generic
  medicines
• compulsory licensing as stipulated in TRIPS
• transitional periods before WTO agreements are
  applied
• Government Use clause

Countries take the decision on which products to
import
20
India has become compliant with TRIPS but current
generic products not significantly affected
except for possible payment of royalties
Patented before 1995
Patented between 1995 and 2005
Patented after 2005

• AZT
• 3TC
• NVP
• EFV
• ddI
• NFV
• D4T
• TNF

• AZT3TC
• LPNRTV
• TNF

New Products
TRIPS compliant January 2005
No Restrictions
Payment of royalties
Severe restrictions
21
Between 2000 and 2002 ARV prices were reduced
significantly through competition between
originators and generic companies
Originator 10439
Brazil 2767
Originator 727
Cipla 350
Ranbaxy 295
Hetero 201
Lowest world prices per patient per year for
d4T3TCNVP. May 2000 to Jan 2003 Source MSF
Untangling the web of price reductions. June
2003.
22
Greater competition has kept ARV prices low since
2002 but weak US led some manufactures to
increase their US prices or begin quoting in
euros
23
MIDDLE INCOME COUNTRIES STILL PAYING A PREMIUM
FOR ARVsARV Middle Income vs LDC prices
No FDCs
as of 31 Dec 2004
24
Pricing needs to differentiate between originator
and generic manufacturers and take account of
patent status

• Originator
• Access prices to LDCs
• Differential pricing to non-LDCs based on
  negotiations

• Generic
• Uniform price across all countries

50 difference on combivir
Patent Situation
Role of tiered pricing ability to pay
25
Current developing countries market for ARVs
lacks predictability, reliability and
sustainability which limits ability for price
pressure
Clinton Foundation prices based on 2m treatments
Secure Market
GFATM
Lowest current daily price to UNICEF of
d4T3TCNVP 42 cents (US)
26
A word of caution Price pressure on vaccines led
to manufacturer exit, product shortages and
increased prices
Price
Exit
27
Global ARV treatment gap
Estimated 600m required to provide treatment to
3 million people
Source 3by5 Progress Report. WHO, Geneva,
December 2004.
Local groups (eg faith based organisations),
National bodies (eg National AIDS council) and
International players (eg UNICEF, Global Fund,
World Bank) have all contributed to made this
progress possible, but treatment still eludes
most.
28
THANK YOU
29
SUPPLY CATALOGUE 2003
Designed to assist in supply planning, delivery
and monitoring.
The Supply Catalogue contains specifications for
some 1,700 commodities available through
Procurement Services. Available in Print/CD-Rom
or on-line at www.unicef.org/supply