Cost of Drugs Versus Cost of Delivery

Kimerling urged the MDR TB community to look beyond the price of SLDs to consider the overall cost of patient care and treatment (i.e., the price of delivery8), because the SLD pricing problem is only one factor. He noted huge variation in cost of delivery in different countries and warned that “we can’t be naive and think that by solving the SLD-pricing problem we actually are solving the care and treatment problems.”

Impact of New Drugs on Market Fragmentation

The SLD market is fragmented by country-to-country variations in treatment regimen, and in many cases multiple regimens within countries themselves. Therefore, achieving market stability and reliable forecasting is likely to be further challenged and fragmented by the introduction of new drugs and regimens that are currently under development as part of the existing pipeline (Figure 3-1).

Because, Kimerling said, at least two of the new drugs in Phases II and III of clinical development could be on the market in the next 1 or 2 years, there will be a need for forecasting and modeling about the impact of their market entry. Currently, there are three key funders in the MDR TB space: Global Fund, UNITAID, and individual governments. He suggested interacting directly with those governments that are developing economically and have their own resources and health budgets that could potentially be combined with funding organizations in an innovative way.

BMGF Program-Related Investments (PRIs)

Kimerling remarked that the model of BMGF-supported PRIs, which take the form of loans that must be repaid (not grants), could potentially serve as an innovative financial intervention to help break the price-inflation cycle in the MDR TB market (Figure 3-3). PRIs are financial mechanisms offered by foundations like BMGF in the form of equity or debt guarantee as a way of using endowments to support charitable market interventions. For example, PRIs could help to counteract monopoly premiums by facilitating competition. Volume guarantees could be used to offset the costs of subscale manufacturing and to address risk premiums. PRIs could help manufacturers by supporting a product’s manufacturing line or by taking an equity position through a loan or direct investment.

To be implemented, these types of mechanisms must function in conjunction with all players involved. Therefore, Kimerling suggested,

___________________

8 Including hospital and clinic care, training and personnel costs, lab tests, etc.



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement