Monopoly in the market of expensive medicaments: why do they ask such a high price for the hepatitis drug?

July 30, 2014  22:31

Thousands of Armenian people suffering hepatitis C cannot afford treatment as it may require as much as $16 000 annually. This may result in premature death for them, but, above all, real epidemic danger may as well arise. 

So why is hepatitis C treatment so expensive in Armenia? Can it be made more affordable, after all?

As coordinator of Advocacy and Research Group on AIDS Hovhannes Madoyan told NEWS.am Medicine, doctors use a special drug for antiviral treatment of hepatitis C - pegylated interfron, which is produced by only two companies worldwide (Swiss Roche and German Merck). The medicament has been in the market for 12 years already, but since the producers still hold the copyright for them, generic versions have not had the chance to emerge and prevent the aforementioned companies from price-control.

Roche representatives say the high price for the drug is the result of large R&D costs. However, as Hovhannes Madoyan pointed out, the company's initial statement said they spent as much as $2 billion for research, and they received a revenue of $20 billion during those years, which means all the costs have been covered and large profits have been provided. But the price for the drug has seen no decline so far.

Two approaches can still address the issue. One of them depends on other pharmaceutical companies, and the second – on the government of Armenia. 

Hovhannes Madoyan reminded the situation over the HIV treatment that was in place several years ago. Its annual cost was again $15 000 and more, but different pharmaceutical companies risked to break the copyright and to produce generic medicaments at a much lower price. As a result, the branding companies had to come to agreement with them and reduce the price for their production as well.

Thanks to that practice HIV treatment has now become affordable worldwide.

Still, there is another way to cut the costs associated with hepatitis C treatment. In case of Egypt, for instance, the government of the country initiated long-term successful negotiations with Roche aimed at reducing the price for the treatment down to $2500 annually. Similar process has been seen in Georgia: our neighbors managed to achieve a significant discount (price thrown down to $4000) for pegylated interferon purchased by the state. Moreover, the importer has agreed to sell extra 1000 units of medicament to Georgia at the discounted price.

In order to achieve this, consistent role-playing by government is required. Activists say the Armenian government should hold direct negotiations with producers and importers to convince them that, taking into account the low solvency rate among the population of the country, serious reduction in price is required.

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