* London congress showcases dramatic treatment advances
* WHO guidelines back Gilead, J&J pills but flag up cost
* UN agency wants "concerted effort" to reduce prices
* Hepatitis C pricing a hot issue for biotech investors
By Ben Hirschler
LONDON, April 9 The World Health Organisation
wants a "concerted effort" to drive down the cost of new
hepatitis C drugs that offer a cure for the liver-destroying
virus but are unaffordable for most infected people worldwide.
The forthright comments from the UN agency on Wednesday
add to pressure on drugmakers such as Gilead Sciences -
which is already facing protests in the United States over its
$1,000-a-day pill - to do more to improve access.
In its first-ever treatment guidelines for the disease,
issued at a meeting of international liver experts in London,
the WHO strongly recommended new drugs from Gilead and Johnson &
Johnson - with a big caveat on their cost.
Treating the approximately 150 million people in the world
living with chronic hepatitis C infection is the new front-line
in the battle over access to medicines.
As with AIDS 15 years ago, modern drugs are transforming the
ability to fight hepatitis C because pills such as Gilead's
Sovaldi are far more effective and better-tolerated than older
injection regimens, with cure rates well above 90 percent in
"These drugs are fantastic - they are a real breakthrough,"
Markus Peck-Radosavljevic, a professor of medicine in Vienna and
secretary-general of the European Association for the Study of
the Liver, told Reuters. "But the prices are too high."
Pharmaceutical companies say they need to charge high prices
on new successful drugs to cover the huge cost of development,
including of those that fail to make it to the market.
A record number of promising results from late-stage
clinical trials on a range of new oral medicines will be
showcased at the International Liver Congress this week.
Hepatitis C virus, or HCV, is spread through blood, often
via contaminated needles. It causes cirrhosis and liver cancer.
The vast majority of cases are in poorer countries where the
complexity, cost and side effects of current treatments have
made treatment impractical.
The arrival of simple pills, taken for as little as a couple
of months, could revolutionise therapy, if the price is right.
By giving governments a plan setting out how to test for,
treat and prevent HCV, the WHO is laying foundations for
tackling the disease, while spurring demand and sending a strong
message on price.
"I hope these guidelines will help to promote a reduction in
price and thereby an increase in access," said Stefan Wiktor,
who leads the WHO hepatitis programme.
Drawing a clear parallel with the experience of HIV/AIDS,
the WHO believes a "multi-pronged" approach is needed. This
could include tiered price discounts by branded drugmakers,
voluntary licensing and also compulsory licensing.
Voluntary licensing involves a patent owner agreeing to
license its drug to generic manufacturers, while a compulsory
licence is issued by a government without any such agreement -
something the pharmaceuticals industry is keen to avoid.
After dragging their feet for years over access to AIDS
drugs in Africa, pharmaceuticals makers are trying to take the
initiative this time. Market leader Gilead recently agreed a 99
percent price discount for Egypt and plans to grant voluntary
licences to several Indian generics firms.
J&J has also promised to work on access and others entering
the area - such as AbbVie, Bristol-Myers Squibb
and Merck & Co - are expected to follow suit.
But campaigners want more. The Medecins Sans Frontieres
group believes a 12-week course of treatment and diagnosis
should cost no more than $500. That compares with the $84,000
and $66,000 charged by Gilead and J&J respectively for their
drugs in the United States.
There is also a big concern about middle-income countries
such as China, India and Russia, which are home to most cases of
HCV worldwide but where drug companies are more reluctant to
accept rock-bottom prices than in the poorest nations.
Charles Gore, president of the patient-led World Hepatitis
Alliance, welcomed the WHO guidelines but said international
funding along the lines of the Global Fund to Fight AIDS,
Tuberculosis and Malaria was now needed.
When it comes to profits, drug companies are expecting to
make most of their money in the United States, where medicines
traditionally fetch a premium.
But the scale of the expected demand for new hepatitis C
drugs - which industry analysts believe will translate into
annual sales of $9.1 billion for Sovaldi alone by 2017,
according to Thomson Reuters data - means the industry is under
U.S. lawmakers asked Gilead last month to explain the
$84,000 price tag on Sovaldi, hitting shares in the firm and
raising fears across the biotech sector.
"Until we develop a better model, we are still in the
situation where investors in pharma want to recompensed on the
winners for all the losers - and there have been a lot of losers
in hepatitis C over the years," said Gore.
(Reporting by Ben Hirschler; editing by David Stamp)