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The State of the Antiretroviral Drug Market in Low- and Middle-Income Countries ISSUE 1, OCTOBER 2010
Market Review
ARV market continues to grow rapidly, expanding by 13% in 2009
Access to antiretroviral (ARV) drugs in the developing world has grown at an impressive rate in the last decade, with the number of patients on treatment increasing 12-fold in the past seven years. In 2003, less than 400,000 patients were on antiretroviral treatment (ART) in low- and middle-income countries; today there are more than 5 million patients on ART.i In 2009 alone, the number of patients on treatment expanded by more than 20%. In dollar terms, the ARV market grew at a slightly slower pace in 2009, because the average cost of treating an individual patient declined. The average per patient per year (pp/py) cost of treatment fell by 12% for stavudine (D4T)-based regimens and by a striking 30% for tenofovir (TDF)-based regimens. As a result, the average cost of first-line therapy in low-income countries fell from $155 pp/py in 2008 to $135 pp/py in 2009. The cost of second-line therapy fell more dramatically, from $1,024 to $721 pp/py, as a result of declining prices and a move to cheaper second-line regimens. Despite the decline in the cost of treatment, the overall market for ARVs in generic-accessibleii countries grew from an estimated $700 million in 2008 to nearly $790 million in 2009, an increase of 13% (see Table 1). Second-line ARVs accounted for roughly 13%, or $98 million, of the total market size in these countries. Although less than 3% of patients in generic accessible countries are on second-line therapy, the average cost of treating these patients is 5 times higher than for patients on first-line therapy.
In contrast, the pediatric ARV market grew at a much slower pace in 2009. Although the number of children on treatment rose by nearly 30% in 2009,iii there was a significant shift in prescription patterns away from expensive syrup formulations to fixed-dose combination drugs (FDCs). In 2009, procurement of all major pediatric ARV syrups, with the exception of abacavir (ABC), declined significantly. UNITAID procurement of zidovudine (AZT) syrup, for example, dropped from over 1 million bottles in 2008 to around 200,000 bottles in 2009, a decline of 80%.iv TABLE 1: GLOBAL ARV MARKET SIZE (USD) IN GENERIC ACCESSIBLE COUNTRIES
$800M 800
$98M
600
2L
$96M
400
$601M
200
$689M
1L
0 2008 2009
Market Outlook
Looking ahead over the next five years, the ARV market is likely to expand at an even faster pace than in recent years, as a result of changing market dynamics. The 2010 edition of the WHO ART Guidelines includes two major changes that will have significant implications for adult treatment: a new treatment eligibility threshold and the demotion of d4T as a preferred first-line drug.
funding commitments before they start aggressively moving patients off of d4T. While the pace is somewhat uncertain, the shift away from d4T is undeniable and will represent the most significant change in adult regimen trends seen in the past decade. A CHAI survey showed that 60% of patients in low- and middle-income countries were still on d4T-based regimens in 2009, and we see this dropping to just 15% of patients by 2014. South Africa, which alone accounts for 18% of the total global patients on treatment, recently promoted TDF as the preferred first-line option. Several other countries have already made similar decisions or are in the process of re-evaluating their national treatment guidelines (see Table 2).
New guidelines will increase number of patients eligible for ART, but impact on ARV demand is uncertain
Perhaps the most significant change in the 2010 WHO ART Guidelines is the recommendation to initiate all adult patients with a CD4 cell count below 350 cells/mm3 on treatment. The previous WHO guidelines only recommended treatment for patients with a CD4 cell count below 200 cells/mm3, or for patients in advanced clinical stages of the disease. Modeling estimates predict that early initiation will result in an increase in eligible patients of anywhere from 50%v to 200%.vi However, the near-term impact of this change is uncertain due to funding constraints and the ability of health systems to cope with such a significant influx of patients. In light of this uncertainty, our baseline scenario assumes that patient growth will continue to rise at a similar pace as in recent years. Please refer to the Risk Analysis section for a discussion on alternative scenarios related to patient growth.
while changes in preferred regimen choice will drive shift to more expensive 1L drugs
Another major change in the revised guidelines is the demotion of d4T as a preferred option for first-line therapy, as a result of its long-term toxicity profile. We expect that this change will drive a major shift away from d4T and towards AZT and TDF in the coming years. The rate of shift will vary by country. Most countries will phase out D4T gradually focusing first on new patients and existing patients that are experiencing toxicities but in some cases the shift will be more abrupt. In Uganda, for example, the government has already stopped buying d4T and is proactively switching all patients immediately. Some countries, such as Zimbabwe and Malawi, will likely require additional
Overall, our forecast projects a near 50% drop in d4T demand in generic-accessible countries over the next five years, from 2.3 million patients in 2010 to 1.2 million patients in 2014. Of the alternative NRTI options, TDF demand is likely to increase five-fold from nearly 700,000 patients in 2010 to 3.6 million patients by 2014 while AZT demand will double from 1.6 million patients to 3.2 million patients (see Table 3).
40% 40% 52% 52% 20% 14%15% D4T 0% 2010 2014 AZT
patients taking EFV. However, EFV growth is not likely to keep pace with TDF growth because a handful of countries - notably Kenya have adopted TDF+3TC+NVP as their preferred regimen, even though no FDC is available for that regimen. Furthermore, many countries will prescribe NVP to any woman of childbearing age because of concerns around EFV use during pregnancy. As a result, the ratio of EFV to NVP use is expected to rise only modestly over the coming five years. Longer-term, the NNRTI market will likely undergo more significant change, with the introduction of rilpivirine (TMC-278). This drug is expected to be more convenient than NVP, more suitable for women than EFV, and significantly cheaper than EFV. A new drug application for TMC-278 was submitted to the FDA in July, and generic versions of the product may become available in 2012.
from $790 million in 2009 to more than $1.8 billion in 2014, representing an annual growth rate of 18%.
Risk Analysis
In this section, we consider key market uncertainties that could impact the size of the ARV market over the next five years. A major uncertainty in todays environment is the rate of scale-up of patients on treatment. While the new WHO eligibility criteria will prompt a significant increase in the number of patients in need of treatment, funding constraints are likely to limit the pace of scale-up. While our baseline scenario assumes a similar scale-up rate as seen in recent years, our risk analysis section considers two alternative scenarios.
Pediatric Patients
400,000 ddI 300,000 200,000 100,000 0 2010 2011 2012 2013 2014 ABC AZT d4T
21% 17%
1.5
9%
1.0
0.5
Tenofovir (TDF)
5 Patients (M) 4 API (MT) 315 500
3 50
Stavudine (d4T)
60 Patients (M) 50 43 API (MT) 36 30 25 2.3 1 2.0 1.7 1.4 1.2 20 30 40
398 400
Patients (millions)
Patients (millions)
API (MT)
231 2 149 2.9 1 73 1.4 0.7 0 2010 2011 2012 2013 2014 0 2.1 100 3.6 200
10
Zidovudine (AZT)
4 693 Patients (M) 3 API (MT) 456 2 350 2.9 2.5 1 1.6 100 0 2010 2011 2012 2013 2014 0 2.1 200 3.2 552 629 700 600 800
Efavirenz (EFV)
3 Patients (M) API (MT) 504 439 382 328 2.6 2.3 1 1.7 1.5 2.0 200 100 0 2010 2011 2012 2013 2014 0 300 500 400 577 700 600
Patients (millions)
Patients (millions)
500
API (MT)
400 300
API (MT)
API (MT)
300
Nevirapine (NVP)
6 705 Patients (M) 5 API (MT) 579 646 700 0.25 600 800 0.30
Atazanavir (ATV)
27 Patients (M) 25 API (MT) 30
Patients (millions)
4 424 3
Patients (millions)
504 500
0.20 15 0.15 0.2 0.10 6 0.05 2 0.0 0.00 2010 2011 2012 2013 2014 2 0.1 0.0 0.1
20
API (MT)
15
10
Lopinavir (LPV)
0.30 Patients (M) 0.25 API (MT) 31 38 39 36 40 35 30 25 0.15 21 0.3 0.10 0.1 0.05 5 0.00 2010 2011 2012 2013 2014 0 0.2 0.3 0.2 20 15 10 45
Patients (millions)
0.20
API (MT)
API (MT)
API (MT)
2010 73 350 50 328 424 21 1.8 460 24 2011 149 456 43 382 504 31 2.3 552 27 2012 231 552 36 439 579 38 5.9 653 23 2013 315 629 30 504 646 39 14.6 753 12 2014 398 693 25 577 705 36 27.4 845 11
i WHO/UNAIDS, Towards Universal Access: Progress Report 2010 ii Generic accessibility is a term used to denote a country in which global generic manufacturers are able to register and sell their generic ARV products at considerable volumes as a percentage of the total ARV volume for that country. The four major generic inaccessible countries are: Argentina, Brazil, China, and Mexico. iii WHO/UNAIDS, Towards Universal Access: Progress Report 2010 iv UNITAID Pediatric Program Actual Quantity Invoiced 2008 and 2009 v Stover et al, Estimating the Effects and Costs of Changing Guidelines for ART Eligibility, 2009. www.who.int/hiv/topics/treatment/costing_stover.pdf vi WHO Treatment Guidelines. http://www.who.int/hiv/topics/treatment/ART_eligibility_CD4_criteria.pdf vii National AIDS and STI Control Programme, Ministry of Health, Kenya. July 2008. Kenya AIDS Indicator Survey 2007. Preliminary Report. Nairobi Kenya