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«Battling HIV/AIDS A Decision Maker's Guide to the Procurement of Medicines and Related Supplies EDITOR Yolanda Tayler BATTLING HIV/AIDS A Decision ...»

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A Decision Maker's Guide to the Procurement

of Medicines and Related Supplies


Yolanda Tayler


A Decision Maker’s Guide

to the Procurement of Medicines

and Related Supplies

Yolanda Tayler, Editor


© 2004 The International Bank for Reconstruction and Development /

The World Bank

1818 H Street, NW

Washington, DC 20433

Telephone 202-473-1000

Internet www.worldbank.org

E-mail feedback@worldbank.org All rights reserved.

The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent.

The World Bank does not guarantee the accuracy of the data included in this work.

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Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission promptly.

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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org.

Library of Congress Cataloging-in-Publication Data has been requested.

ISBN 0-8213-5848-0 Cover photograph is of orphans in Cambodia © Reza; Webistan/Corbis Cover designed by Susan Schmidler Contents Foreword vii Executive Summary xi Preface xxi Acknowledgments xxiii Abbreviations xxv 1 Challenges in Scaling up Treatment 1 The economic impact of HIV/AIDS and ART 4 Estimating resource requirements 5 Long-term economic effect of HIV/AIDS and other considerations 6 2 Intellectual Property Rights: A Concise Guide 11 Introduction to this concise guide 11 How patents affect medicines procurement 12 Least develope

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4.1 WHO recommendations for initiating ART in adults and adolescents with documented HIV infection................. 36 vi Contents

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The HIV/AIDS pandemic has been characterized as the greatest natural challenge ever to confront humanity and one of the great moral causes of our time.

The pandemic is on a rapid global march and is now impacting some of the world’s most populous countries. Forty million people worldwide are currently living with the disease and another 45 million may become infected by 2010. The disease is having a particularly devastating impact on Sub-Saharan Africa, where 2.3 million people died of HIV/AIDS in 2003, an estimated 26.6 million people are HIV positive, and there are more than eleven million AIDS orphans. In addition, an estimated five to six million individuals in developing countries are in need of antiretroviral therapy (ART) today.

The world community recognizes that HIV/AIDS is a global priority, and halting and reversing its spread is one of the Millennium Development Goals. The World Bank and other sources of finance, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria and the U.S.

Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 have committed substantial financing to fund HIV/AIDS prevention, care and treatment and mitigation programs. To date the World Bank has committed US$1.6 billion to the war against HIV/AIDS through a combination of grants, loans, and credits, mostly through its Multi-country

viiviii Foreword

HIV/AIDS Programs (MAPs) in Africa and in the Caribbean. Of special importance is providing treatment for the millions of people around the world who are HIV positive and whose lives would be prolonged by the use of anti-retroviral medicines. However, scaling up treatment is a major challenge. The Bank has recognized that waging war against HIV/AIDS means adopting new approaches and procedures.

The Bank’s Implementation Acceleration Team was created in January 2003 to—among other things—create solutions wherever existing procedures and practices appeared inadequate for fast and flexible interventions. As a result, significant changes have already been made in a number of areas, such as the implementation of safeguard policies, grant-making authority, knowledge sharing, and financial management, disbursement, and reporting.

This Decision Maker’s Guide (hereafter referred to as “the Guide”) represents an important further step in this work. While implementing agencies are familiar with how to procure goods and services for traditional development projects, dealing with HIV/AIDS requires new areas of expertise, especially with regard to purchasing antiretroviral medicines and other medical supplies and devices. This Guide on procurement of HIV/AIDS medicines and supplies, which was extensively discussed with and reviewed by stakeholders around the world, is meant as a guide for implementing agencies and donors in these new areas. The Guide adapts the Bank’s guidelines on the procurement of health goods to the HIV/AIDS context. In addition, it sets out principles and guidance to ensure that such procurements will fit within an overall well-functioning supply management system for HIV/AIDS medicines and related supplies.

Within the contemporary context, this effort requires that attention also be paid to matters such as product selection, quality assurance, and countries’ intellectual property rights systems within the global trading system.

The Bank and its partners in the United Nations’ Interagency Pharmaceutical Coordination Group are currently working to make this Guide an interagency document in order to further the harmonization of the procurement of HIV/AIDS products. For the World Bank it takes effect immediately, and an intensive training program will be rolled out for task teams and relevant staff of borrowers and grant recipients.

HIV/AIDS is not just a critical health problem—it is a defining development problem of our time. This Guide materially updates, amplifies, ix Foreword and enhances the Bank’s capability, and that of its member countries, to

address one of the weakest links in the current fight against the pandemic:

appropriate and effective treatment. We trust that it will make a material contribution.

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Antiretroviral therapy (ART) has radically changed the outlook for people who can pay for it or use it in well-resourced health care systems.

Living longer, healthier lives, they can become productive and able to care for themselves. ART is not a cure, but it diminishes the viral load and thus reduces damage to the immune system. It also reduces the statistical risk of passing on the virus through whatever route—blood, breast milk, and sexual or other bodily fluids.

Despite some dramatic reductions in the last three years, the costs associated with antiretroviral drugs (ARVs) and other medicines for HIVrelated problems are still very high and may remain so. Skilled negotiation and lobbying on behalf of—and by—people with HIV has already had some effect in reducing prices. But even when full advantage is taken of the lowest possible prices on the global market, the annual total cost of ART is still more than the national budget for health care in some countries.

Much higher costs will be incurred in countries that cannot get lowcost supplies for patent or other market reasons. Costs will also be higher if drug resistance develops and more expensive alternative medicines have to be used. So for many countries, assistance from the World Bank, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and other key donors will be essential to make the public health promises of ART a reality, at least for the foreseeable future.

xixii Executive Summary

Planners and decision makers must have a clear understanding of the importance of treatment in tackling HIV and ensure that specific services

and facilities required for treatment be included in the scaling up effort:

HIV counseling, testing, and follow-up services for adherence to treatment and psychosocial support.

Capacity for appropriate management of HIV and opportunistic infections.

Laboratory services for monitoring treatment.

Continuous supply of ARVs, other medicines for HIV-related illness, and supplies for laboratory tests and preventive precautions.

Reliable regulatory mechanisms that ensure the quality of treatment while protecting the individual’s right to treatment.

Procurement is only one link in this large network of factors affecting the HIV epidemic. Yet it is clearly vital. Successful treatment depends on continuous, reliable supplies of the necessary medicines and related commodities. Without sustained access to ARVs, the challenge of treatment cannot be met—and the ravages of the epidemic will continue.

Estimating resource requirements Estimating the financial and resource requirements of an ART program is a key step in assessing its feasibility and sustainability. Resources for direct treatment are not the only obstacle to introducing and scaling up ART. The lack of physical and human health infrastructure and the inadequacy of systems to distribute essential medicines affect the availability of drugs and financial feasibility. In all cases, the finances for such a program would have to include expenditure on both capacity building (if it is not adequate) and the purchase of drugs and related medical supplies and services—but in varying proportions, depending on skill sets, income levels, epidemic proportions, and local needs in each situation.

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Aspects of Intellectual Property Rights (TRIPS)—so it is important that staff responsible for project implementation assimilate the information in this Guide. Early clarification of the intellectual property rights situation (and of registration requirements and import regulations) will prevent frustration, wasted time and money, and possible litigation.

As a consequence of the Doha Declaration on the TRIPS Agreement and Public Health, adopted by members of the World Trade Organization in November 2001, least developed countries are authorized to forgo the enforcement of patents on pharmaceutical products at least until January 1, 2016. When a least developed country’s government and its procurement authority take advantage of this maximum flexibility, HIV/AIDS medicines may be imported (or locally produced) without concern about whether patents on those medicines have been granted within the country.

In addition, several least developed and developing countries are eligible to receive patented ARVs under access programs that have been set up by originator companies, at prices that sometimes may be lower than those of the generic versions.

Developing countries that are not considered “least developed,” have the option to override existing patents by issuing a compulsory licensing or government use authorization. A patent is a government grant that permits its holder to exclude third parties from the market for a product, such as an HIV/AIDS–related medicine. A “compulsory license” is an authorization by the government to itself or to a third party to use the patent without the permission of the patent holder. When the government is authorizing its own use, this is also called a “government use” authorization or license, which is a form of compulsory license.

Important HIV/AIDS medicines or supplies are covered by one or more patents in many countries. If the procurement authority wishes to procure a bioequivalent medicine (a generic version) from a party other than the patent holder or its authorized distributor, including by importing the medicine, it may need to authorize procurement under a compulsory license. The TRIPS Agreement, in Article 31, authorizes every government to grant compulsory licenses.

Managing the supply cycle for better outcomes The medicines supply cycle comprises all elements required for the establishment and continuity of supplies for health delivery, including medicines and related commodities. It includes four key stages, with a xiv Executive Summary central requirement for good management support, an understanding of the policy and legal frameworks for the supply cycle, and an appreciation that medicines are special commodities that have constraints concerning quality assurance, storage, and use.

Two key elements of the cycle are selection and procurement. But to get good results, it is clear that these must not happen in isolation. All elements of the cycle must function well, and the broader context must be understood so that a holistic and realistic approach can be taken to achieve the best possible results in each setting.

In many countries, a national drug policy will set out approaches to achieving these priorities within the national context. Such policy is also likely to include setting requirements for registration of drugs and limiting who may prescribe, dispense, or sell them. National HIV/AIDS treatment policies must also be consulted, since these set out guidelines for approving HIV treatment regimens and deciding who is entitled to prescribe them.

Some key policy or legal issues that affect procurement include:

Intellectual property (patent) legislation of medicines—the national patent situation will directly affect what products can be procured from which suppliers and the scope for negotiation of prices.

Health rights and access to HIV-related treatment when limited supplies, particularly of ARVs, are available, eligibility criteria will be applied to the selection of which members of the population qualify for treatment. This process will affect product selection and quantification and may change as scaling up proceeds.

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