Examining the production costs of antiretroviral drugs.
OBJECTIVE
To present direct manufacturing costs and price calculations of individual antiretroviral drugs, enabling those responsible for their procurement to have a better understanding of the cost structure of their production, and to indicate the prices at which these antiretroviral drugs could be offered in developing country markets.


METHODS
Direct manufacturing costs and factory prices for selected first and second-line antiretroviral drugs were calculated based on cost structure data from a state-owned company in Brazil. Prices for the active pharmaceutical ingredients (API) were taken from a recent survey by the World Health Organization (WHO). The calculated prices for antiretroviral drugs are compared with quoted prices offered by privately-owned, for-profit manufacturers.


RESULTS
The API represents the largest component of direct manufacturing costs (55-99%), while other inputs, such as salaries, equipment costs, and scale of production, have a minimal impact. The calculated prices for most of the antiretroviral drugs studied fall within the lower quartile of the range of quoted prices in developing country markets. The exceptions are those drugs, primarily for second-line therapy, for which the API is either under patent, in short supply, or in limited use in developing countries (e.g. abacavir, lopinavir/ritonavir, nelfinavir, saquinavir).


CONCLUSIONS
The availability of data on the cost of antiretroviral drug production and calculation of factory prices under a sustainable business model provide benchmarks that bulk purchasers of antiretroviral drugs could use to negotiate lower prices. While truly significant price decreases for antiretroviral drugs will depend largely on the future evolution of API prices, the present study demonstrates that for several antiretroviral drugs price reduction is currently possible. Whether or not these reductions materialize will depend on the magnitude of indirect cost and profit added by each supplier over the direct production costs. The ability to achieve price reductions in line with production costs will have critical implications for sustainable treatment for HIV/AIDS in the developing world.
Pinheiro
Eloan
E
Department of HIV/AIDS, World Health Organization, Geneva, Switzerland.
Vasan
Ashwin
A
Kim
Jim Yong
JY
Lee
Evan
E
Guimier
Jean Marc
JM
Perriens
Joseph
J
D044966:Anti-Retroviral Agents / Q000191:economics*; D001938:Brazil; D003132:Commerce / Q000191:economics; D003365:Costs and Cost Analysis; D004345:Drug Industry / Q000191:economics*; D004349:Drug Packaging / Q000191:economics; D016568:Drugs, Generic; D017850:Economics, Pharmaceutical; D004864:Equipment and Supplies / Q000191:economics; D005079:Excipients / Q000191:economics; D015658:HIV Infections / Q000188:drug therapy / Q000191:economics*; D006801:Humans; D013678:Technology, Pharmaceutical / Q000191:economics
D044966:Anti-Retroviral Agents; D016568:Drugs, Generic; D005079:Excipients