South Africa is coughing up too much money for DR-TB treatment

In front of an MCC representative, Phumeza Tisile, Andaleeb Rinquest and Morgan Scholtz read aloud a letter signed by over 100 patients with DR-TB, clinicians, healthcare workers, and civil society organisations. The letter outlined a clear call to the MCC: register generic versions of a drug called linezolid, so prices fall and patients with DR-TB across the country have access.

Phumeza, Andaleeb and Morgan were well aware that they might not have been alive that day if they hadn’t received linezolid as part of their XDR-TB treatment. Phumeza was the first person in Khayelitsha that Médecins Sans Frontières (MSF) started on a regimen containing linezolid in 2011, and she was pronounced cured in August 2013. She credits linezolid with turning around her prognosis when no other regimen had proved strong enough to beat her strain of TB. While she received the drug at no cost from MSF, the organisation was shelling out nearly R600 per daily 600 mg tablet (US$60 at the time) to purchase the only available product4 from pharmaceutical company, Pfizer (Note: this price rose to over R700/tablet, or $65 at the time, by mid-20145).

In South Africa’s public health system, however, linezolid was – and still is – available only in limited circumstances, when a doctor makes a strong enough clinical case to justify the price.6 If not approved, the patient faces the choice of paying for the drug on the private market, or hoping they can survive DR-TB without it.

Andaleeb and Morgan had relied on significant support and sacrifices from their families to scrape together tens of thousands of rand per month to purchase the drug, and halved the daily linezolid dose when permitted to do so by their doctor, to make a pricey box of tablets last longer.

In mid-2014, MSF received approval from the MCC for a Section 21 authorisation to import generic linezolid from Hetero and provide it to patients with DR-TB in its Khayelitsha project. The Hetero product was unregistered in South Africa, but had received approval in the UK from a stringent regulatory authority. Section 21 applications to the MCC are typically used to import unregistered medicines when no product is available in South Africa, but in this case, MSF justified their request for an import waiver on the lack of affordability for Pfizer’s product, and in light of the constitutional right of people in South Africa to have access to healthcare services. MSF purchased Hetero’s generic product at an 88 percent price reduction on the Pfizer private sector price at that time, for $8 per 600mg tablet (R85 in June 2014).

The same Hetero product used by MSF under a Section 21 authorisation was undergoing review at the MCC in October 2014. It seemed reasonable to assume that if generic products were registered, the National Department of Health (NDOH) – with one of the largest global demands for the drug – could be offered a similar or better price than MSF, and linezolid could presumably be included in regimens of all DR-TB patients in South Africa who needed the drug. Additionally, Pfizer’s patent on linezolid in South Africa expired in August 2014, leaving registration the only barrier for generic companies interested to compete in the tender.

Before the end of 2014, the MCC granted activists their wish to see a generic linezolid supplier registered. Unfortunately, the price situation remains dire in 2015, with private sector prices subsequently rising, rather than falling. Today, Pfizer markets linezolid in the South African private sector at over R855/tablet ($62). Hetero linezolid, which is marketed by Sanofi, costs over R655/tablet ($47). Earlier this year, the NDOH requested bids from suppliers to provide over 1.1 million linezolid tablets between October 1, 2015 and September 30, 2017, but no suppliers were contracted, suggesting that neither Pfizer nor Sanofi responded with an acceptable public sector price.

When the NDOH does not purchase a drug on tender, provinces may choose to purchase the drug through a ‘buyout’, directly from suppliers. Some provinces have taken this route – and the ‘discount’ prices being quoted provide a sense of the ludicrous offers the NDOH must have received. Chart 1 compares linezolid prices quoted to the Provincial Government of the Western Cape in June 2015 – notably, the Sanofi/Hetero price quoted to the PGWC represents nearly a 50 percent mark-up on the price MSF pays for the same supplier’s product, inclusive of import duties and VAT. The linezolid supplier duopoly in South Africa is clearly asking the NDOH to cough up more cash than is reasonable when DR-TB patients’ lives are on the line. Objectively, all of these prices are high – especially considering that linezolid is only one of several expensive drugs that are beneficial to include in a robust DR-TB regimen. But what is a reasonable price for South Africa to pay? In the immediate term, companies should be offering countries like South Africa prices on par with the Global Drug Facility (GDF), which is the supply channel for the Global Fund. At present, the GDF price for linezolid stands between $5.35 and $5.48 per 600 mg tablet (R76).

In the longer term, prices could fall even further, as countries’ demand for new DR-TB drugs increases, and greater competition develops among suppliers. A recent study suggested the cost of MDR-TB treatment could be at least 80-85 percent lower than the current prices charged by manufacturers. This study estimated that, accounting for production and packaging costs, and factoring in a small profit margin similar to those charged for antiretroviral drugs, the target price of $4.90–$12.80 (R67–R176) per month for linezolid could be achieved.

To achieve more reasonable linezolid prices in South Africa, several things need to happen. Firstly, suppliers who are already registered to sell linezolid in South Africa must offer lower prices to the Department of Health (DOH). Secondly, other quality-assured generic suppliers should file for registration in South Africa, and the MCC should prioritise such applications for rapid registration. At least six generic suppliers already have tentative approval from the US Food and Drug Administration. If these quality-assured suppliers were to approach the DOH with more affordable prices than currently on offer from Pfizer or Sanofi, the DOH could seek permission from the MCC through a Section 21 application to import more affordable products, prior to their full registration in South Africa.
Thirdly, the DOH and other countries – especially those with high DR-TB burdens – should continue to vocalise present and potential future demand for linezolid and other DR-TB drugs, so that generic suppliers are given the appropriate signals to invest in scaling up production.

The NDOH has already expressed its intent to place 3,000 patients per year on linezolid in the short-term, with the intention to expand access over time to reach more of the nearly 19,000 patients diagnosed every year with DR-TB in South Africa.

MSF experience in Khayelitsha has shown that when linezolid prices fall, access to treatment expands – in the months following Section 21 approval for MSF to import generic linezolid, the number of DR-TB patients initiated by MSF on linezolid-containing regimens jumped from a maximum of four per month, to between seven and nine patients per month. MSF doctors no longer feel constrained to limit provision to just a fraction of patients who have run out of adequate treatment options, but similar scale-up has not been possible at DOH facilities. The World Health Organisation recently included linezolid and other new DR-TB medicines on its Essential Medicines List, yet availability of these drugs will continue to be compromised unless significant gains are made toward greater affordability. In the same way that South Africa has realised low prices for HIV treatment in the last decade, taking steps to ensure robust generic competition are critical to bring the era of high prices for DR-TB drugs to an end.