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1 Introduction1 To effectively treat patients diagnosed with drug-resistant (DR) tuber- culosis (TB) and protect the population from further transmission of this infectious disease, an uninterrupted supply of quality-assured (QA), second-line anti-TB drugs (SLDs) is necessary. Patients diagnosed with multidrug-resistant tuberculosis (MDR TB)—a disease caused by strains of Mycobacterium tuberculosis (M.tb.) resistant to two primary TB drugs (isoniazid and rifampicin)—face lengthy treatment regimens of 2 years or more with daily, directly observed treatment (DOT) with SLDs that are less potent, more toxic, and more expensive than those used to treat drug- susceptible TB. From 2000 to 2009, only 0.2–0.5 percent of the estimated 5 million MDR TB cases globally were treated with drugs of known quality and in programs capable of delivering appropriate care (Keshavjee, 2012). The vast majority of MDR TB patients either died from lack of treatment or contributed to the spread of MDR TB in their communities. A strengthened global supply chain for SLDs could save lives by consistently delivering high-quality medicines to more of the people who need them. When SLDs are unavailable to a national TB control programme (NTP) and medical providers in a particular country, patients miss critical doses of medicine or never start treatment—risking the escalation of disease and 1  The planning committee’s role was limited to planning the workshop, and the workshop summary has been prepared by the workshop rapporteurs as a factual summary of what occurred at the workshop. Statements, recommendations, and opinions expressed are those of individual presenters and participants, and are not necessarily endorsed or verified by the Forum or the Institute of Medicine (IOM), and they should not be construed as reflecting any group consensus. 1

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2 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB amplification of drug resistance, enhanced infectivity and transmission of disease to others, and death. Ensuring a reliable and affordable supply of high-quality SLDs is a complex public health intervention that, thus far, has not been organized or implemented in a way that allows all providers and patients access to SLDs when they are needed. Some MDR TB patients without access to SLDs through a Green Light Committee (GLC)-approved program may receive appropriate treatment through a government-run or other QA program. However, it is estimated that approximately 90 percent of patients with DR TB are not receiving treatment through a government- run or QA program. In other words, these patients are likely receiving treatment from sources of unknown quality or no treatment at all. In recent years, many countries have been working to scale up MDR TB treatment programs but, as mentioned by several workshop participants, efforts by international organizations and institutions to ensure SLDs are delivered to patients have not kept pace with global MDR TB needs. Challenges fac- ing the global supply chain for SLDs, and the efficient delivery of drugs to patients, include • The overall market for SLDs is relatively small due to limited diag- nostic capacity at the country level. • Demand-forecasting mechanisms do not fully capture patient needs for SLDs. • Markets are opaque, with high barriers to entry that may deter manufacturers. • Drugs to treat MDR TB carry high prices and have a short shelf life (24 months) compared with treatments for drug-susceptible TB. • Once drugs are ordered, there are lengthy time lines to reach the country. The July 31–August 1, 2012, workshop was convened by the Forum on Drug Discovery, Development, and Translation (“the Forum”) of the Institute of Medicine (IOM) in Washington, DC, to explore options and opportunities to improve the effectiveness of the global SLD supply chain in delivering drugs to patients. Titled “Developing and Strengthening the Global Supply Chain for Second-Line Drugs for Multidrug-Resistant TB,” the workshop was part of a series sponsored by the Forum to gather infor- mation from experts around the world on DR TB prevention, diagnosis, treatment, and management. The Forum held a foundational workshop in Washington, DC, in 2008. The summary of that workshop, Addressing the Threat of Drug-Resistant Tuberculosis: A Realistic Assessment of the Challenge: Workshop Summary (IOM, 2009), and the accompanying white paper (Keshavjee and Seung, 2008) provided background for and informed the development of four

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INTRODUCTION 3 subsequent workshops in countries with a high burden of DR TB. The first workshop in the international series was held in Pretoria, South Africa, on March 3–4, 2010 (IOM, 2011a). The second workshop was held in Moscow, Russia, on May 26–27, 2010 (IOM, 2011b). The third workshop was held in New Delhi, India, on April 18–19 and 21, 2011 (IOM, 2012), and the final workshop in the series is being planned for January 2013 in Beijing, China. Box 1-1 includes some key themes related to the drug supply chain that emerged from the workshops in Washington, DC, South Africa, Russia, and India. The workshop summarized in this volume was convened by the Forum to provide a setting for fostering a dialogue on the needs and opportunities for a global supply chain for TB SLDs. The workshop brought together members of the international TB community—including individuals from U.S. federal agencies, international health authorities, nongovernmental organizations (NGOs), the private sector, academia, and advocacy groups, for 2 days of informative presentations and robust discussion. Box 1-2 lists the objectives of the workshop. In her opening remarks, Gail Cassell, Visiting Professor, Department of Global Health and Social Medicine, Harvard Medical School, warned that failing to address current SLD supply issues would perpetuate the present situation in which the majority of MDR TB patients are undiagnosed and untreated while simultaneously fostering the development of rapid resis- tance to new TB drugs in the pipeline. Since the 2008 workshop (IOM, 2009), data have emerged to suggest that the burden of MDR and exten- sively drug-resistant tuberculosis (XDR TB) is underestimated (Wallengren et al., 2011) and has not only reached global pandemic proportions, but is being fueled by patients who are undiagnosed or who are receiving inade- quate treatment (Keshavjee and Farmer, 2012). Data from KwaZulu-Natal, South Africa, show that 88 percent of XDR TB cases are untreatable with drugs currently available in South Africa.2 China has the highest annual number of MDR TB cases in the world; a survey published by the Chinese Center for Disease Control and Prevention indicated that 10 percent of Chinese TB patients have MDR TB, and 8 percent of those with MDR have XDR TB (Zhao et al., 2012). The same survey in China also revealed that primary transmission, or person-to-person spread, of DR TB accounted for 78 percent of new MDR TB cases and 86 percent of new XDR TB cases. In sum, Cassell noted that there has been an increasing recognition in recent years that DR TB strains are just as easily transmissible from person-to- 2  Data provided via personal communication, October 15, 2012, with Kristina Wallengren, KwaZulu-Natal Research Institute for Tuberculosis and HIV (K-RITH), Nelson R. Mandela School of Medicine, University of KwaZulu-Natal.

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4 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB BOX 1-1 Key Drug Supply Chain Themes from Previous IOM Forum Publicationsa • Diagnosing, treating, and managing DR TB is a complex public health intervention presenting multiple opportunities to improve the scientific, clinical, and organizational aspects of the interven- tion. Improvements to the efficiency and effectiveness of the global supply chain for SLDs represent a significant opportunity to speed medicines to patients and avoid preventable morbidity and mortal- ity from DR TB. • The arrival of drugs into beneficiary countries ordered through the GLC mechanism can be delayed for months, during which time patients are transmitting DR TB and dying. • Limited, inconsistent, and unpredictable demand for SLDs is a key challenge for manufacturers of QA SLDs that results in backlogs, delays, and high prices. • Increased market volumes could attract more manufacturers of QA drugs to the global SLD market and increase competition, reduce prices, and increase availability. • Greater transparency and visibility for manufacturers with regard to demand, QA processes, and financing could improve the SLD supply chain. person as drug-susceptible strains, which was previously not believed to be the case, heightening the need to prioritize MDR TB infection control. BACKGROUND AND HISTORY OF THE CURRENT GLC MECHANISM History Prior to the Formation of GLC3 The GLC mechanism was developed in response to the widespread emergence of resistance to first-line anti-TB drugs (FLDs) that began in the 1980s and that has gained momentum rapidly since the 1990s. Peter Cegielski, Team Leader for Drug-Resistant TB, International Research and 3  This subsection is based on the presentation by Peter Cegielski, Team Leader for Drug- Resistant TB, International Research and Programs Branch, Division of Tuberculosis Elimina- tion, U.S. Centers for Disease Control and Prevention (CDC).

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INTRODUCTION 5 • The forecast and demand management aspects of procurement have a high degree of uncertainty. • Procurement processes for drug provision mechanisms could be improved and streamlined. • Regulatory processes, quality standards, and treatment regimens could benefit from harmonization among countries in order to re- duce barriers to suppliers entering the SLD market. • Information management systems could improve tracking of opera- tional activities of DR TB supply chains. • Ensuring the timely delivery of high-quality SLDs to patients is part of a complex health care challenge that includes several steps, from initial testing, diagnosis, and treatment protocols to drug manufacturing and delivery to initiation and completion of treatment. a Based on remarks from Gail Cassell, Visiting Professor, Department of Global Health and Social Medicine, Harvard Medical School; and Stemming the Tide of Multidrug-Resistant Tuberculosis: Major Barriers to Addressing the Growing Epidemic (Keshavjee and Seung, 2008); Addressing the Threat of Drug-Resistant Tuberculosis: A Realistic Assessment of the Challenge: Workshop Summary (IOM, 2009); The Emerging Threat of Drug-Resistant Tuber- culosis in Southern Africa: Global and Local Challenges and Solutions: Workshop Summary (IOM, 2011a); The New Profile of Drug-Resistant Tuberculosis in Russia: A Global and Local Perspective: Workshop Summary (IOM, 2011b); and Facing the Reality of Drug-Resistant Tuberculosis in India: Challenges and Potential Solutions: Workshop Summary (IOM, 2012). Programs Branch, Division of Tuberculosis Elimination, U.S. Centers for Disease Control and Prevention (CDC), provided historical background about the formation of the GLC initiative in the late 1990s. The history and design of the GLC mechanism provides context and a basis for under- standing the current challenges facing efforts to supply SLDs to the global MDR TB population. According to Cegielski, the period spanning the 1940s to the 1970s was a “golden era” for TB drug development, in which dozens of new com- pounds were developed into commercial products. Concurrently, microbio- logical methods to test for susceptibility to those new drugs were developed. By the early 1970s, the superior efficacy of the three-drug regimen of isonia- zid, rifampicin, and pyrazinamide had been established by extensive clinical trials. The establishment of this efficient regimen consequently engendered a sense of optimism that TB had been conquered. Cegielski noted that this optimism led to a general complacency that left the world unprepared for the emergence of strains resistant to the regimen. Efforts to discover and

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6 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB BOX 1-2 Statement of Task for the Workshop This public workshop explored innovative solutions to the problem of how to get the right SLDs for MDR TB to people who critically need them. More specifically, the workshop examined current problems and potential opportunities for coordinated international efforts to ensure that a reliable and affordable supply of high-quality SLDs is available. The workshop objectives were to consider •  what extent and in what ways current mechanisms are or are To not effectively accomplishing what is needed, including consider- ation of bottlenecks o The advantages and disadvantages of centralization in the man- agement of the global drug supply chain, and potential decen- tralized approaches to improve operations of the supply chain o What can be learned from case studies and examples from other diseases (e.g., the Affordable Medicines Facility-malaria [AMFm] and the U.S. President’s Emergency Plan for AIDS Relief [PEPFAR]) •  The current allocation of responsibilities and roles of the private (including industry and nonprofit public health organizations) and public sectors, and examination of opportunities for enhancing and optimizing collaboration •  Identification of potential innovative solutions to the problem develop new drugs ended, and drug production was massively curtailed as the spread of disease slowed, particularly in wealthier countries. This period coincided with many nations’ development into middle-income countries with their own domestic pharmaceutical industries. Because those indus- tries often lacked stringent QA/QC (quality control) standards, the volume of substandard and counterfeit drugs infiltrating the market rose, and an incipient resistance to the standard TB drug regimen resulted. By the 1980s, rifampicin resistance had emerged as a serious problem in many areas of the world. In the 1990s, the Global Drug Resistance surveys carried out by the World Health Organization (WHO) and the International Union Against Tuberculosis and Lung Disease (“The Union”) demonstrated the magnitude of the worldwide MDR TB burden. The consequent surge in demand for SLDs revealed widespread supply, cost, and availability problems.4 4  An exception is fluoroquinolones. They are effective against TB, but because they were developed for other indications, production is robust and pricing and supply are therefore not an issue.

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INTRODUCTION 7 MDR TB has persisted for 20 years, suggested Cegielski, because dur- ing the 1990s and into the 2000s, TB experts, public health leaders, and leadership organizations were polarized about how to respond to MDR TB outbreaks. One faction held the view that services for MDR TB should not be integrated into TB control programs; the other faction held the opposite point of view, that the MDR TB problem should be addressed head on through an MDR-specific strategy. Cegielski stated that the effect of this polarization was an overall ambivalence, with a lack of strategic guidance and policy setting due largely to “a failure of leadership to respond vigor- ously to the MDR TB problem.” Consequently, low- and middle-income countries failed to develop sufficient diagnostic capacity, clinical expertise, markets, or regulatory capacity to treat MDR TB successfully. Lack of technical expertise therefore became a barrier to MDR TB treatment. Also during this time, many NTP managers did not develop adequate systems to procure SLDs or develop sufficient laboratory capacity. Cegielski suggested that price also emerged as a primary barrier to expanding MDR TB treatment. He attributed this issue in part to national policies guided by public health leadership organizations opposed to treat- ing MDR TB, which had the result of allocating insufficient resources from ministries of health to NTPs. This landscape began to change slowly in the late 1990s and early 2000s, when GLC; the Global Fund to Fight AIDS, Tuberculosis and Malaria (“the Global Fund”); and other initiatives were developed to address MDR TB by mitigating the barriers of expertise and price. Formation of GLC5 Salmaan Keshavjee, Director, Program in Infectious Disease and Social Change, Department of Global Health and Social Medicine, Harvard Medi- cal School, described the formation of GLC in response to evidence of the emerging MDR TB epidemic in the 1990s. Initially, GLC was designed as a pilot project mechanism to provide affordable SLDs and to gather data about those projects to inform global policy on the treatment of MDR TB. He also explained the structural and functional evolution of the GLC mechanism, from its initial development as a multi-institutional partnership composed of global stakeholders to its current configuration as an advisory committee to WHO. 5  This subection is based on the presentation by Salmaan Keshavjee, Director, Program in Infectious Disease and Social Change, Department of Global Health and Social Medicine, Harvard Medical School.

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8 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB Rationale for Formation of GLC In the 1990s, WHO introduced promotion of the Directly Observed Treatment-Short course (DOTS) treatment strategy. The DOTS approach in the 1990s included five components: political commitment with increased and sustained financing; case detection through sputum smear microscopy; standardized treatment with supervision; an effective drug supply and management system; and a monitoring and evaluation system and impact measurement.6 In many ways, the introduction of DOTS followed the framework of the selective primary health care movement of the 1980s, which focused on providing low-cost, highly effective interventions for diseases that were identified as particularly threatening to public health (although the primary health care movement itself excluded TB, categoriz- ing it as category II [Walsh and Warren, 1979]). However, the rollout of the DOTS intervention, which was designed specifically for treating drug- susceptible TB, did not address the rising specter of MDR TB. At that time, WHO had advised against treating DR TB, particularly in low-income countries, citing a concern that such a treatment strategy would detract attention and resources from the treatment of drug-susceptible disease. Thus, resistant disease was progressively transmitted and the epidemic continued to grow. In 1993, WHO began conducting annual global surveys to assess drug resistance, which indicated the presence of resistance to TB drugs in all 35 countries reviewed. In response to an MDR TB epidemic in Lima, Peru, Partners In Health carried out a pilot project for community-based treatment of MDR TB. The project was based on the approach used by New York City to address their MDR TB epidemic in the late 1980s, which had resulted in positive outcomes for MDR TB patients. The success of that pilot project started a movement leading to the creation of the “DOTS-Plus” framework for the treatment of MDR TB, which extended the existing DOTS program to include treatment of MDR TB with second-line anti-TB agents. DOTS-Plus pilot projects were designed to collect data from low-income countries with the objective of enabling WHO to change its policy on the treatment of MDR TB in resource-limited settings. A mechanism was needed to make SLDs available at a low cost to those projects. GLC was therefore created between 1998 and 2000 as a multi-institutional partnership to address the high cost of MDR TB drugs. Modeled on an approach to make meningitis vaccines available in resource- limited settings, GLC provided access to low-cost SLDs exclusively to DOTS-Plus pilot projects that were meeting certain programmatic bench- 6  See http://www.who.int/tb/dots/en/index.html (accessed October 18, 2012).

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INTRODUCTION 9 marks. The rationale for this selectivity was to ensure that the drugs were used properly in controlled settings in the pilot programs. System of Pilot Projects Keshavjee stressed that the GLC mechanism was not intended for scale-up, but was designed to facilitate a series of pilot projects intended to provide data to change global policy about MDR TB. Between 2000 and 2009, the number of pilot projects grew rapidly (Figure 1-1). Organizational Structure of GLC GLC’s multi-institutional partnership was hosted by WHO’s TB depart- ment as part of one of its working groups and was transferred to the Stop TB Partnership when that partnership was formed in 2001. As the number of pilot projects began to increase in 2005, the Global Drug Facility (GDF) was brought into the system beginning in 2007 to purchase the increasing volume of SLDs through procurement agents, based on a formal agreement with the GLC Secretariat that year.7 Keshavjee noted that the GLC mechanism had many positive aspects— most notably the success in encouraging programs to provide a high stan- dard of care to patients, and encouraging countries to view the pilot projects as models for national scale-up. However, Keshavjee added, the fact that GLC functioned as a “centralized node of control” (Figure 1-2) had some negative implications. For example, instead of seeing MDR TB as an urgent need that must be rapidly addressed as a public health concern, countries applied to GLC seeking permission to treat their MDR TB patients in a pilot project format. Applications were evaluated on a program’s capacity to diagnose patients and deliver appropriate care. Approved applications were then passed on to the GLC Secretariat, hosted by WHO, which func- tions in an administrative capacity. WHO’s Stop TB Department provides technical assistance in starting, evaluating, and monitoring beneficiary countries’ MDR TB programs and connects with countries and partners. Keshavjee noted that all the components of the current system are actually situated within the WHO mechanism (including the Stop TB Part- nership, which has no legal identity of its own). He added that eventually WHO’s legal department ruled that GLC could no longer exist as a multi- institutional partnership because GLC and the entire Stop TB Partnership were legally part of WHO, and the current system of involvement of multiple non-WHO institutions was not consistent with WHO rules. As a result, the original system was disbanded. An advisory body to WHO 7  Médecins Sans Frontières (MSF) purchased drugs for GLC in 2001 and 2002.

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10 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB Number of GLC Projects Implemented (CumulaƟve) 70,000 60,000 • 166 Approved ApplicaƟons 50,000 • 108 Projects • 67 Countries 40,000 • 59,282 PaƟents Approved 30,000 20,000 10,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 FIGURE 1-1 Number of GLC pilot projects implemented around the world be- Figure 1-1 tween 2000 and 2009. SOURCE: Keshavjee, 2012. Presentation at IOM workshop on Developing and Strengthening the Global Supply Chain for Second-Line Drugs for Multidrug- Resistant Tuberculosis, adapted from Dr. Ernesto Jaramillo, WHO, Geneva. with a similar name—designed to keep the GLC “brand” but composed of individual experts, not stakeholders or partners—now exists instead. Financing and Procurement Requirements Currently, GLC MDR TB projects are financed by grants from the Global Fund, UNITAID, and other public and private sources of funding. Since 2002, the Global Fund has required that all SLD procurement for MDR TB programs that it funds go through GLC. This policy seeks to control the emergence of SLD resistance by ensuring the use of only QA drugs. Keshavjee emphasized that beneficiary countries are not allowed to use Global Fund or UNITAID monies to purchase SLDs directly from manufacturers, regardless of the QA status of the supplier. He also noted

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INTRODUCTION 11 Stop TB Partnership WHO Stop TB Department Global Drug Green Light GLC Secretariat Facility Committee (Hosted by WHO) • Drug Procurement • Advice • GLC Administration • Application Review • Technical Assistance (with Partners) • Link to Countries FIGURE 1-2  Creation of a centralized node of control for the GLC-approved SLD supply chain. SOURCE: Keshavjee, 2012. Presentation at IOM workshop on Developing and Figure 1-2 Strengthening the Global Supply Chain for Second-Line Drugs for Multidrug- Resistant Tuberculosis. that the WHO system, including use of GDF to oversee procurement, has not successfully optimized pooled procurement—it places orders only when funds are made available by countries/programs. Likewise, it also does not optimize direct price negotiation with manufacturers, and little active nego- tiation occurred after the initial lowering of prices in 2000. Change in WHO Policy Keshavjee stated that GLC’s initial objective of gathering data from pilot programs to effect change in WHO’s MDR TB policy was achieved in 2006. He described how WHO’s global treatment and program recom- mendations were changed to apply the standard of MDR TB care used in places like New York City in the early 1990s to all countries worldwide. The standard of care included the use of drug sensitivity testing to diagnose drug resistance, the provision of SLDs, and the delivery of care with appro- priate monitoring and treatment of adverse events (WHO, 2006).

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38 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB Sidebar: Eli Lilly’s SLD Technology Transfera In 2003, Eli Lilly and Company launched the Eli Lilly MDR TB partner- ship (the “Partnership”). As part of the Partnership, Eli Lilly committed to transfer the technology necessary to manufacture two SLDs (cycloserine and capreomycin) to partners globally, some of whom would be located in countries with the highest MDR TB burden. In this way, Eli Lilly hoped to improve the availability of these drugs and the sustainability of their supply. In addition, between 2003 and 2011, Eli Lilly manufactured and supplied these two medicines to the WHO mechanism at concession- ary prices. Eli Lilly stopped supplying cycloserine in 2006 and stopped manufacturing capreomycin in 2011, by which time several of its partners were able to supply the market. To illustrate the rationale behind Eli Lilly’s decision to transfer the technology for the manufacture of capreomycin, Iain Richardson, Senior Director, Global Supply Chain and Logistics, Eli Lilly and Company, explained that by 2011, despite having already doubled the company’s internal capacity, manufacturing was “running flat out” and still only sup- plying sufficient medicine to treat approximately 7,000 patients. However, the installed capacity across Eli Lilly’s partners far exceeds Eli Lilly’s own capacity, thereby better assuring supply. Richardson also illustrated that Eli Lilly’s cost structure for cycloserine manufacture was simply not competitive when compared with other manufacturers that had different scale and overhead drivers. Such factors drove Eli Lilly’s decision to transfer the technology for the manufacture of those two drugs, with the intention of creating a sustainable long-term supply and increasing market volume, by shifting production to low-cost manufacturing partners in high-burden countries. Richardson described how that technology was transferred via the Part- nership to seven manufacturers, including several in high-burden coun- tries (China, India, Russia, and South Africa). All of those manufacturers now have regulatory approvals, six have stringent regulatory approvals or WHO PQ, and one has national regulatory authority (NRA) and pend- ing WHO PQ approval. Eli Lilly has continued its involvement with those partners in their ongoing attempts to expand the SLD market and provide treatments to patients. a This box is based on the presentation by Iain Richardson, Senior Director, Global Supply Chain and Logistics, Eli Lilly and Company.

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INTRODUCTION 39 SLD market, despite its small size. However, it is currently facing a regula- tory barrier, delay in WHO registration, and is seeking options to expedite the process. Lisa Hedman, Project Manager, WHO, commented that the Expert Review Panel process can grant a provisional prequalified (PQ) status while registration processes are pending. She noted that WHO is dealing with a “bandwidth” problem due to the large number of pending applications and inspections. This, compounded by the percentage of poor applications received from facilities deemed unacceptable (all of which must be processed and inspected), exhausts WHO resources and generates further delays. Perspective of Providers and Collaborating Organizations Challenges of Implementing a New MDR TB Program in a Country That Went Through the Proper GLC Mechanism31 Goldfeld related her experiences about how GHC initiated an MDR TB treatment in Ethiopia in 2009 in partnership with the Federal Ministry of Health. Ethiopia is a high TB- and MDR TB–burdened country. The GHC program employed a hospital and community-based MDR TB care model that GHC has pioneered in Cambodia, and in so doing overcame major obstacles, including the delay of WHO/GLC-approved SLDs from GDF and issues of diagnostic lab capacity, human resources, isolation beds, and access to traditional funding mechanisms such as the United States Agency for International Development (USAID). Until this GHC program initiated treatment in February 2009, no MDR TB treatment was available in Ethiopia despite its large estimated burden and a successful application by the country for SLDs. Forty-five patients were approved for treatment, and the drugs had been anticipated for delivery in October 2008; however, they did not arrive until almost a year later. In this vacuum, by leveraging an initial donation of 18 doses of capreomycin from Eli Lilly, GHC, with the support of the Jolie-Pitt Foun- dation, purchased additional SLDs, provided funds for the inpatient and outpatient management of patients, and performed the first countrywide MDR training, including training personnel in its program in Cambodia. The South-to-South partnership that GHC established, with ongoing tech- nical and program design input and funding for additional SLDs, ancillary medication, food baskets, social support, laboratory tests, and procedures, was supported by charitable contributions, including a grant from the Eli Lilly MDR-TB Partnership, continued support from the Jolie-Pitt Founda- 31  This subsection is based on the presentation by Anne Goldfeld, Professor of Medicine, Harvard Medical School, and Co-founder, GHC.

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40 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB tion, 305 courses of capreomycin from Eli Lilly, a donation of cycloserine from the Chao Foundation, and paser from Jacobus. These resources, in addition to the leveraged expertise, were key in removing bottlenecks to drug procurement from the Ministry of Health. When GLC drugs finally arrived, in-country expertise in treatment and management of MDR had been established, allowing rapid adoption. The Ethiopian/GHC MDR TB treatment partnership has been scaled up and was expanded to Gondar in northern Ethiopia in August 2010. As of July 2012, 500 patients had been initiated on therapy, with only 6 defaults and a death rate of less than 10 percent in a very sick population (24 percent HIV co-infection and the majority of patients with bilateral cavitary disease). Though some GLC-imposed procedures (e.g., require- ments that patients be hospitalized in isolation wards that were not yet completed at program initiation) were extremely problematic due to lack of funding and capacity limitations, Goldfeld noted that it was possible to find “work-arounds,” such as setting up interim isolation wards in unused facilities and receiving drug donations. Goldfeld reported that scale-up of the MDR TB program, countrywide training programs, and health sys- tems capacity building are ongoing in Ethiopia, with outstanding program results. She also noted that of the original 221 patients who were waiting for therapy in fall 2008, her team was able to find and initiate only 66 (30 percent) on MDR therapy; 42 had died waiting for drugs (20 percent), and the team was unable to find 110 (50 percent) of those on the list despite a house-to-house search, many of whom thus presumably died. She empha- sized the urgency of providing access to high-quality MDR care to interrupt preventable death from a curable infectious disease and to interrupt further transmission. Challenges of Supplying QA SLDs (MSF)32 Henkens described MSF’s role in providing MDR TB treatment world- wide. In 1999, MSF became involved with procuring SLDs. The organi- zation committed to pooling procurement of 2,000 treatments from QA sources by negotiating a price drop with manufacturers and buying drugs to guarantee complete treatment.33 MSF currently treats approximately 1,200 patients in 17 countries, using both the GDF procurement mechanism and its own pooled procurement mechanism for certain projects. MSF maintains a stringent QA structure by adhering to the requirements for SLDs deter- 32  This subsection is based on the presentation by Myriam Henkens, International Medical Coordinator, MSF. 33  After 2,000 treatments were attained, procurement was taken over by IDA in 2002 and transferred to GDF in 2006.

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INTRODUCTION 41 mined by approved regulatory bodies (e.g., WHO PQ, SRA registration, U.S. FDA tentative approval, Global Fund/GDF Expert Review Panel) or evaluated following its own internal qualification scheme. Henkens also suggested that countries should commit to using only QA drugs, noting that given the relatively low efficacy of current treatment protocols and given the high rate of adverse reactions, patients have the right to be sure that at least the quality of drugs is not questionable. A major challenge facing the supply chain for QA SLDs is that despite an increase in the number of QA manufacturers, the prices of QA products have not improved since 2001. Henkens suggested that the fact that Eli Lilly no longer subsidizes capreomycin and cycloserine could account for the increases in price of those drugs, noting that the prices for products that had the same manufacturers in 2001 and 2011 (ethionamide, prothi- onamide, and PAS) are the ones that have remained stable. Improved coor- dination among countries and producers could help ensure that increased competition does not lead to increased prices, given limited availability. Henkens suggested that “breaking the vicious cycle” would require strat- egies such as improved forecasting, transparent market allocation, and implementing a revolving fund and rotating stockpile. Challenges for South Africa’s MDR TB Policy34 Decentralizing MDR TB care. The South African National Department of Health has announced that every facility treating MDR TB will have a GeneXpert® machine for diagnosing M.tb. and rifampicin resistance by the end of the 2012 financial year. Gray speculated that the expected significant increase in the number of diagnoses and the number of patients requiring MDR TB treatment will present a serious challenge to the current treat- ment capacity in the country. Only 2,500 beds are available in specialist TB hospitals in the country (for a population of 50 million). To address this problem, South Africa has developed a new policy aimed at decentralizing the management of MDR TB patient care. Gray expressed his concern that the policy also includes, in certain cases, treating patients on an ambulatory basis even in the intensive phase of treatment. Challenges of public tendering. Most TB drugs in South Africa are procured on a competitive basis through the public sector, which generates a specific set of problems. First, there is a dearth of domestic producers, despite the tender system being geared toward nationally registered products. Sec- ond, many tenders for first- and second-line products go unawarded; for 34  This subsection is based on the presentation by Andrew Gray, Senior Lecturer, Pharma- ceutical Sciences, School of Health Sciences, University of KwaZulu-Natal.

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42 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB example, in view of the limited number of products available, a company might opt not to put forward a tender in the hope that the government would then approach the company to negotiate a price higher than the one the company would have offered in a tender. Third, there is a concentra- tion of suppliers—particularly suppliers of API. Though there are multiple formulators, the current market is overreliant on a single, limited supplier. It was also noted by several workshop participants that individual countries have different approaches for managing MDR TB and the SLD drug sup- ply; country-specific experiences can inform efforts to improve the global supply chain (Box 1-4). Need for New SLD Formulations and Regimens The individual panelists offered the following additional concerns and problems relating to SLD formulations and regimens: • prevalence, severity, and lack of diagnosis of SLD-related adverse reactions (e.g., ototoxicity due to injectable agents); • problems with the effectiveness of existing SLDs; • absence of pediatric formulations for SLDs; and • lengthy and complex nature of treating DR TB with SLDs. In light of such disadvantages, several panelists suggested there is an urgent need to develop new and improved regimens. Over the course of the session identifying barriers and challenges to the supply chain, individual speakers and participants also identified potential ways forward to address some of the key barriers (Box 1-5).

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INTRODUCTION 43 BOX 1-4 Country Approaches to the MDR TB SLD Supply Chaina Several speakers delivered presentations describing the approaches of specific countries with a high burden of MDR TB. Norbert Ndjeka, MDR TB Director, Department of Health, South Africa, described the challenges faced in South Africa’s approach to MDR TB management. Joël Keravec, Brazil Country Program Director, Management Sciences for Health (MSH), explained Brazil’s model for TB treatment and drug management. Andreas Seiter, Senior Health Specialist, Pharmaceuti- cals, Health, Nutrition, and Population, World Bank, described India’s approach to cofinancing its NTP with the World Bank. South Africa Ndjeka addressed South Africa’s approach to the challenges it has faced in treating MDR TB patients and its attempts to shift from pilot projects to a nationally owned program. With the highest TB burden in the world, South Africa still struggles with a gap between diagnosed and treated MDR TB patients and a treatment success rate of less than 50 percent.b A first step is the standardization of treatment guidelines throughout the country, along with a means of ensuring compliance. To address the current bed shortage for MDR TB patients (due to an inadequate number of specialized facilities), South Africa has adopted a national strategic plan to transition to a decentralized model of MDR TB management. The essence of the policy is to de-institutionalize care of MDR TB patients, to “bring treatment to the communities where they live.” A parallel objective is to implement nurse-initiated MDR TB treat- ment to further facilitate early diagnosis, initiation of treatment, commu- nity DOT, and patients’ education about their disease. Under this policy, drug procurementc and quality testing are performed by the Department of Health and universities, not through global mechanisms of QA (e.g., WHO PQ, GLC, GDF). A huge discrepancy remains between the cost of treating an MDR/ XDR TB patient and the cost of treating a drug-susceptible TB patient in South Africa; approximately 100 drug-susceptible TB patients can be treated for the cost of treating a single MDR/XDR TB patient. This gives rise to challenges of prioritization, in that arguments exist for focusing on drug-susceptible TB and for questioning the high cost of treatment for MDR TB. A further issue is that TB funding in South Africa is not securely dedicated to TB only, and funds are often used for other health-related programs. Patients’ high pill burden (especially when co-infected) and antipathy toward receiving injections is also a challenge, as is problem- continued

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44 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB BOX 1-4 Continued atic packaging of medicines. Ndjeka outlined another stream of systemic challenges related to the supply chain for MDR TB drugs, specifically stock-outs. Poor forecasting leads to drug stock-outs, and there are no effective mechanisms to track those stock-outs or drug usage in general; “unreal” stock-outs often occur when there are drugs available at phar- maceutical depots but not at treatment facilities. Brazil In Brazil, the state is the key player in all aspects of drug manage- ment. In his presentation, Keravec explicated Brazil’s national policy for TB management and control, which could provide a model for protect- ing the effectiveness of new TB drugs as they enter the market. Brazil currently carries a relatively low level of DR TB burden. Despite ranking 17th of the 22 highest-burdened countries for drug-susceptible TB, only 700 DR TB patients are notified and treated each year. All TB drugs are available only in the public sector, free to patients, and QA; both TB and DR TB treatment is similarly restricted only to the public sector. A system of reference centers is responsible for creating and monitoring DR TB treatment centers. Keravec noted that Brazil’s NTP quantifies need and the Ministry of Health’s pharmacy department is responsible for procuring QA drugs. Local procurement is prioritized via direct agreements with public gov- ernment manufacturers and via an open-tendering process at market prices for SLDs that are produced by local private-sector manufacturing firms.d However, he described the following major challenges facing Brazil’s public SLD manufacturers: manufacturers have limited access to APIs that are not produced in the country, tax burdens and production costs are high compared to India and China, and the small internal DR TB market makes investment in SLD production by local manufacturers less attractive. Such barriers have led to the need to procure some SLDs that are not produced in-country (i.e., capreomycin, cycloserine, PAS, and clofazimine). In such cases the GDF/GLC mechanism is employed using the Pan American Health Organization as a mediator. To enable improved demand forecasting, procurement, and distribution, all DR TB

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INTRODUCTION 45 patients and SLDs are managed within a single integrated, Web-based platform (e-TB Manager/Site TB). This platform integrates all levels of TB control within the public sector and reference centers treating DR TB patients, including information on diagnosis, clinical management, and drug supply components. The system contributes to multiple program- matic aspects of DR TB control including, pharmacovigilance and precise drug consumption monitoring. India India is employing a different type of approach to financing its TB program, as described by Seiter. The World Bank finances loans (not grants) to the Indian government that are used to procure drugs, but in a way that is implemented within India’s own national policy and in ac- cordance with its own set of regulatory standards. The World Bank is not involved in any phase of procurement except for financing. This strategy is aimed at system strengthening, essentially functioning as a bridge between scale-down of the prior Global Fund program and scale-up of Indian investment in its own national program. The World Bank itself does not have the in-house technical expertise to help achieve such goals, but it can partner relatively flexibly to bring in the appropriate technical and organizational support as required. This financing framework could serve as an example of how countries might transition from external grants to autonomous financing and in the process build a stronger NRA. In India, pharmaceutical manufacturers are regulated at the state level, but the central authority plays a role in ensuring quality for centrally procured medicines. Neither the state regulators nor the central Food and Drugs Authority are yet accepted as “stringent regulatory authorities” by the international community. a This box is based on presentations by Joël Keravec, Brazil Country Program Director, Management Sciences for Health (MSH); Norbert Ndjeka, MDR TB Director, Department of Health, South Africa; and Andreas Seiter, Senior Health Specialist, Pharmaceuticals, Health, Nutrition, and Population, World Bank. b A new national strategic plan has a target of 60 percent within the next 5 years. c Ndjeka noted that the companies that supply the drugs to the Department of Health are the same ones supplying those drugs for WHO PQ. d All manufacturers are validated and registered by Anvisa, Brazil’s NRA.

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46 GLOBAL SUPPLY CHAIN FOR SECOND-LINE DRUGS FOR MDR TB BOX 1-5 Suggested Ways Forwarda Over the course of the session identifying barriers and challenges to the supply chain, individual speakers and participants also identified potential ways forward to address some of the key barriers. A number of their suggestions are also addressed later in this report. Those sugges- tions are compiled here in an integrated summary of those individually identified themes. These suggestions should not be construed as reflect- ing consensus or endorsement by the planning committee, the Forum, the workshop participants, or the IOM. • mplementation of a rotating stockpile or buffer stock could smooth I demand and improve predictability in manufacturing and delivery processes. • mproved demand forecasting and predictability could help to at- I tract new manufacturers to the market and improve competition. •  onors should consider increasing the allocation of funding toward D program implementation and improvement and/or shortening of the current treatment regimen. •  ooled procurement and direct procurement from manufacturers P employed within the GLC mechanism could alleviate the problems of limited availability and high prices. •  aking steps to accelerate registration, adoption, and uptake could T reduce drug lag in the regulatory process. Key Messagesa •  ailure to address the current SLD supply chain issues will lead to F increased drug resistance, morbidity, and mortality. •  LC was designed to foster pilot projects and was not meant as a G mechanism for scale-up. •  arket-shaping strategies, including shifting the push-pull bound- M ary, may improve the drug supply chain. •  rucial barriers to addressing SLDs include high cost, limited sup- C ply, and manufacturing complexities. •  ifficulties in meeting multiple, complex regulatory requirements D contribute to delays in delivery of SLDs. a Identified by individual speakers.

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INTRODUCTION 47 •  raining programs implemented at all levels of the supply chain T could strengthen systems and build in-country capacity. •  evelopment of innovative financing and contracting structures to D shift the push-pull boundary SLD supply chain toward forecast- driven manufacturing processes could improve efficiency and cost. •  arket fragmentation could be addressed by consolidating and M harmonizing product specifications. Mostaghim offered four strands of market structure adjustments that might help to facilitate patients’ access to QA SLDs. He noted that suc- cessful implementation of these types of structural adjustments would require tight coordination among all partners and stakeholders, including donors, procurers, manufacturers, NTPs, regulators, and so on. •  emand-side activities: Consolidating and harmonizing NTPs’ D technical specifications for products and facilitating in-country registrations. •  anufacturer engagement: Providing clear guidance regarding en- M try and eligibility for key product specifications. •  egulatory engagement: Expediting priority dossiers for key prod- R ucts by maximizing the number of eligible participants in a tender. •  rocurement and supplier selection: Proactively splitting tenders, P ensuring transparency, and providing clearer demand forecasting. a Identified by individual speakers.

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