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Japan Today
6 days ago
- Business
- Japan Today
When developing countries band together, lifesaving drugs become cheaper and easier to buy − with trade-offs
Pooling procurement of drugs could increase the availability of essential treatments around the globe. By Lucy Xiaolu Wang and Nahim Bin Zahur Procuring lifesaving drugs is a daunting challenge in many low- and middle-income countries. Essential treatments are often neither available nor affordable in these nations, even decades after the drugs entered the market. Prospective buyers from these countries face a patent thicket, where a single drug may be covered by hundreds of patents. This makes it costly and legally difficult to secure licensing rights for manufacturing. These buyers also face a complex and often fragile supply chain. Many major pharmaceutical firms have little incentive to sell their products in unprofitable markets. Quality assurance adds another layer of complexity, with substandard and counterfeit drugs widespread in many of these countries. Organizations such as the United Nations-backed Medicines Patent Pool have effectively increased the supply of generic versions of patented drugs. But the problems go beyond patents or manufacturing – how medicines are bought are also crucially important. Buyers for low- and middle-income countries are often health ministries and community organizations on tight budgets that have to negotiate with sellers that may have substantial market power and far more experience. We are economists who study how to increase access to drugs across the globe. Our research found that while pooling orders for essential medicines can help drive down costs and ensure a steady supply to low- and middle-income countries, there are trade-offs that require flexibility and early planning to address. Understanding these trade-offs can help countries better prepare for future health emergencies and treat chronic conditions. Pooled procurement reduces drug costs One strategy low-income countries are increasingly adopting to improve treatment access is 'pooled procurement.' That's when multiple buyers coordinate purchases to strengthen their collective bargaining power and reduce prices for essential medicines. For example, pooling can help buyers meet the minimum batch size requirements some suppliers impose that countries purchasing individually may not satisfy. Countries typically rely on four models for pooled drug procurement: -- One method, called decentralized procurement, involves buyers purchasing directly from manufacturers. -- Another method, called international pooled procurement, involves going through international institutions such as the Global Fund's Pooled Procurement Mechanism or the United Nations. -- Countries may also purchase prescription drugs through their own central medical stores, which are government-run or semi-autonomous agencies that procure, store and distribute medicines on behalf of national health systems. This method is called centralized domestic procurement. -- Finally, countries can also go through independent nonprofits, foundations, nongovernmental organizations and private wholesalers. We wanted to understand how different procurement methods affect the cost of and time it takes to deliver drugs for HIV/AIDS, malaria and tuberculosis, because those three infectious diseases account for a large share of deaths and cases worldwide. So we analyzed over 39,000 drug procurement transactions across 106 countries between 2007 and 2017 that were funded by the Global Fund, the largest multilateral funder of HIV/AIDS programs worldwide. We found that pooled procurement through international institutions reduced prices by 13% to 20% compared with directly buying from drug manufacturers. Smaller buyers and those purchasing drugs produced by only a small number of manufacturers saw the greatest savings. In comparison, purchasing through domestic pooling offered less consistent savings, with larger buyers seeing greater price advantages. The Global Fund and the United Nations were especially effective at lowering the prices of older, off-patent drugs. Trade-offs with pooled procurements Cost savings from pooled drug procurement may come with trade-offs. While the Global Fund reduced unexpected delivery delays by 28%, it required buyers to place orders much earlier. This results in longer anticipated procurement lead time between ordering and delivery – an average of 114 days more than that of direct purchases. In contrast, domestic pooled procurement shortened lead times by over a month. Our results suggest a core tension: Pooled procurement improves prices and reliability but can reduce flexibility. Organizations that facilitate pooled procurement tend to prioritize medicines that can be bought at high volume, limiting the availability of other types of drugs. Additionally, the longer lead times may not be suitable for emergency situations. With the spread of COVID-19, several large armed conflicts and tariff wars, governments have become increasingly aware of the fragility of the global supply chain. Some countries, such as Kenya, have sought to reduce their dependence on international pooling since 2005 by investing in domestic procurement. But a shift toward domestic self-sufficiency is a slow and difficult process due to challenges with quality assurance and large-scale manufacturing. It may also weaken international pooled systems, which rely on broad participation to negotiate better terms with suppliers. Interestingly, we found little evidence that international pooled procurement influences pricing for the U.S. President's Emergency Plan for AIDS Relief, a major purchaser of HIV treatments for developing countries. PEPFAR-eligible products do not appear to benefit more from international pooled procurement than noneligible ones. However, domestic procurement institutions were able to secure lower prices for PEPFAR-eligible products. This suggests that the presence of a large donor such as PEPFAR can cut costs, particularly when countries manage procurement internally. USAID cuts and global drug access While international organizations such as the Medicines Patent Pool and the Global Fund can address upstream barriers such as patents and procurement in the global drug supply chain, other institutions are essential for ensuring that medicines actually reach patients. The U.S. Agency for International Development had played a significant role in delivering HIV treatment abroad through PEPFAR. The Trump administration's decision in February 2025 to cut over 90% of USAID's foreign aid contracts amounted to a US$60 billion reduction in overall U.S. assistance globally. An estimated hundreds of thousands of deaths are already happening, and millions more will likely die. The World Health Organization warned that eight countries, including Haiti, Kenya, Nigeria and Ukraine, could soon run out of HIV treatments due to these aid cuts. In South Africa, HIV services have already been scaled back, with reports of mass layoffs of health workers and HIV clinic closures. These downstream cracks can undercut the gains from efforts to make procuring drugs more accessible if the drugs can't reach patients. Because HIV, tuberculosis and malaria often share the same treatment infrastructure – including drug procurement and distribution networks, laboratory systems, data collection, health workers and community-based services – disruption in the management of one disease can ripple across the others. Researchers have warned of a broader unraveling of progress across these infectious diseases, describing the fallout as a potential 'bloodbath' in the global HIV response. Research shows that supporting access to treatments around the world doesn't just save lives abroad. It also helps prevent the next global health crisis from reaching America's doorstep. Lucy Xiaolu Wang is Assistant Professor, Department of Resource Economics, UMass Amherst. Nahim Bin Zahur Assistant Professor of Economics, Queen's University, Ontario. The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts. External Link © The Conversation
Associated Press
20-06-2025
- Business
- Associated Press
mRNA Technology Transfer Programme's Phase 2.0 discussed with partners on the sidelines of G20 Summit
With the G20 Health Working Group, global health leaders are coming together to set the foundation for a new phase of the mRNA Technology Transfer Programme 'This is a unique opportunity, driven by the pandemic. The foundations are in place — but without sustained political will, the promise of equitable mRNA access could slip through our fingers.'— Charles Gore, Executive Director of the Medicines Patent Pool JOHANNESBURG, GAUTENG, SOUTH AFRICA, June 20, 2025 / / -- In parallel with the G20 Health Working Group, global health leaders are coming together in Johannesburg to set the foundation for a new phase of the mRNA Technology Transfer Programme – a pioneering initiative transitioning from proof of concept to sustainable, commercially viable manufacturing, while enhancing pandemic preparedness and regional health security. Launched in 2021 by the World Health Organization (WHO) and the Medicines Patent Pool (MPP), with the support of the Government of South Africa, France, Belgium, Canada, the European Union, Germany and Norway, the Programme has successfully enabled 15 Partners across Latin America, Africa, Eastern Europe and Asia to receive foundational mRNA technology. Now, it is moving into Phase 2.0 (2026–2030), with the aim of empowering regional manufacturers to scale up commercially sustainable production of mRNA-based vaccines and therapeutics at Good Manufacturing Practices (GMP)-grade. 'The mRNA Technology Transfer Programme is delivering on its promise to build capabilities in low- and middle-income countries,' said Dr Tedros Adhanom Ghebreyesus, WHO Director-General. 'The Pandemic Agreement adopted by the World Health Assembly also includes legally-binding commitments to strengthen local production. We must now translate those commitments into capacity on the ground, so that when the next pandemic strikes, we meet it more equitably and more effectively.' 'This is a unique opportunity, driven by the pandemic. The foundations are in place — but without sustained political will, the promise of equitable mRNA access could slip through our fingers.' said Charles Gore, Executive Director of the Medicines Patent Pool. 'What we need now is the courage to build on our investment to date, to align, and to realise the full value and impact of what we started.' From technology access to market-ready solutions The Programme is moving from focus on technology acquisition to defining how each partner will translate it into real-world impact. Each manufacturer is now focused on developing an economic case for long-term, flexible, and commercially viable manufacturing — with the capacity to produce mRNA vaccines in inter-pandemic periods and pivoting rapidly in response to future health emergencies. Product focus areas include: mRNA vaccines – for pandemic and priority diseases (e.g., influenza, TB, HIV, malaria, dengue, leishmaniasis); mRNA therapeutics – such as oncology and monoclonal antibody (mAb) treatments; and Biologicals beyond mRNA – including near-term commercial products to support facility viability. 'We have successfully progressed with the technology transfer to eight Partners — a testament to the strength and openness of this platform,' said Prof. Petro Terblanche, CEO of Afrigen Biologics. 'What comes next is even more exciting: Afrigen is on the cusp of receiving GMP accreditation, positioning us not only as a technology originator but as a sustainable manufacturing and innovation partner for the Global South. We will continue to work with local and global partners on the development of new vaccines prioritizing the burden of disease in LMICs.' A diversity of models, one global goal The Programme's Phase 2.0 recognises that there is no one-size-fits-all model. Manufacturers will develop tailored business strategies based on national health needs and policy, regulatory maturity and regional market dynamics. Some, like Bio-Manguinhos and Sinergium in Latin America, BioFarma in Indonesia, and Biovac in South Africa, are already piloting investment roadmaps with detailed market, regulatory, and COGS (cost of goods sold) modelling. Others will receive bespoke support to develop their investment cases. Crucially, sustainability will depend on country and regional-level procurement commitments, pooled purchasing mechanisms, and cross-border alignment — especially in Africa and Asia, where national markets alone may be insufficient to support GMP-level manufacturing scale. 'We need to back science with smart policy,' said Dr Mmboneni Muofhe of South Africa's Department of Science, Technology and Innovation. 'This is about creating a new ecosystem for public health security, grounded in regional ownership, long-term strategy and investments.' Rising demand meets structural barriers While market opportunities for mRNA vaccines and therapeutics are growing — from seasonal influenza and HPV to innovative cancer treatments — the Programme acknowledges structural hurdles: Misinformation and vaccine hesitancy; Shifting donor funding priorities that reduce funding availability; High clinical trial costs; and Need for supportive policies and well-defined procurement pathways. The mRNA Programme highlights both the growing interest in regional R&D consortia focused on target diseases of regional relevance like leishmaniasis and malaria, and the drive to advance next-generation technologies focusing on dose sparing, reduced cost of goods and thermostability. Edwin Reichel Flow Communications +27 114404841 email us here Legal Disclaimer: EIN Presswire provides this news content 'as is' without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
Yahoo
17-06-2025
- Business
- Yahoo
When developing countries band together, lifesaving drugs become cheaper and easier to buy − with trade-offs
Procuring lifesaving drugs is a daunting challenge in many low- and middle-income countries. Essential treatments are often neither available nor affordable in these nations, even decades after the drugs entered the market. Prospective buyers from these countries face a patent thicket, where a single drug may be covered by hundreds of patents. This makes it costly and legally difficult to secure licensing rights for manufacturing. These buyers also face a complex and often fragile supply chain. Many major pharmaceutical firms have little incentive to sell their products in unprofitable markets. Quality assurance adds another layer of complexity, with substandard and counterfeit drugs widespread in many of these countries. Organizations such as the United Nations-backed Medicines Patent Pool have effectively increased the supply of generic versions of patented drugs. But the problems go beyond patents or manufacturing – how medicines are bought are also crucially important. Buyers for low- and middle-income countries are often health ministries and community organizations on tight budgets that have to negotiate with sellers that may have substantial market power and far more experience. We are economists who study how to increase access to drugs across the globe. Our research found that while pooling orders for essential medicines can help drive down costs and ensure a steady supply to low- and middle-income countries, there are trade-offs that require flexibility and early planning to address. Understanding these trade-offs can help countries better prepare for future health emergencies and treat chronic conditions. One strategy low-income countries are increasingly adopting to improve treatment access is 'pooled procurement.' That's when multiple buyers coordinate purchases to strengthen their collective bargaining power and reduce prices for essential medicines. For example, pooling can help buyers meet the minimum batch size requirements some suppliers impose that countries purchasing individually may not satisfy. Countries typically rely on four models for pooled drug procurement: One method, called decentralized procurement, involves buyers purchasing directly from manufacturers. Another method, called international pooled procurement, involves going through international institutions such as the Global Fund's Pooled Procurement Mechanism or the United Nations. Countries may also purchase prescription drugs through their own central medical stores, which are government-run or semi-autonomous agencies that procure, store and distribute medicines on behalf of national health systems. This method is called centralized domestic procurement. Finally, countries can also go through independent nonprofits, foundations, nongovernmental organizations and private wholesalers. We wanted to understand how different procurement methods affect the cost of and time it takes to deliver drugs for HIV/AIDS, malaria and tuberculosis, because those three infectious diseases account for a large share of deaths and cases worldwide. So we analyzed over 39,000 drug procurement transactions across 106 countries between 2007 and 2017 that were funded by the Global Fund, the largest multilateral funder of HIV/AIDS programs worldwide. We found that pooled procurement through international institutions reduced prices by 13% to 20% compared with directly buying from drug manufacturers. Smaller buyers and those purchasing drugs produced by only a small number of manufacturers saw the greatest savings. In comparison, purchasing through domestic pooling offered less consistent savings, with larger buyers seeing greater price advantages. The Global Fund and the United Nations were especially effective at lowering the prices of older, off-patent drugs. Cost savings from pooled drug procurement may come with trade-offs. While the Global Fund reduced unexpected delivery delays by 28%, it required buyers to place orders much earlier. This results in longer anticipated procurement lead time between ordering and delivery – an average of 114 days more than that of direct purchases. In contrast, domestic pooled procurement shortened lead times by over a month. Our results suggest a core tension: Pooled procurement improves prices and reliability but can reduce flexibility. Organizations that facilitate pooled procurement tend to prioritize medicines that can be bought at high volume, limiting the availability of other types of drugs. Additionally, the longer lead times may not be suitable for emergency situations. With the spread of COVID-19, several large armed conflicts and tariff wars, governments have become increasingly aware of the fragility of the global supply chain. Some countries, such as Kenya, have sought to reduce their dependence on international pooling since 2005 by investing in domestic procurement. But a shift toward domestic self-sufficiency is a slow and difficult process due to challenges with quality assurance and large-scale manufacturing. It may also weaken international pooled systems, which rely on broad participation to negotiate better terms with suppliers. Interestingly, we found little evidence that international pooled procurement influences pricing for the U.S. President's Emergency Plan for AIDS Relief, a major purchaser of HIV treatments for developing countries. PEPFAR-eligible products do not appear to benefit more from international pooled procurement than noneligible ones. However, domestic procurement institutions were able to secure lower prices for PEPFAR-eligible products. This suggests that the presence of a large donor such as PEPFAR can cut costs, particularly when countries manage procurement internally. While international organizations such as the Medicines Patent Pool and the Global Fund can address upstream barriers such as patents and procurement in the global drug supply chain, other institutions are essential for ensuring that medicines actually reach patients. The U.S. Agency for International Development had played a significant role in delivering HIV treatment abroad through PEPFAR. The Trump administration's decision in February 2025 to cut over 90% of USAID's foreign aid contracts amounted to a US$60 billion reduction in overall U.S. assistance globally. An estimated hundreds of thousands of deaths are already happening, and millions more will likely die. The World Health Organization warned that eight countries, including Haiti, Kenya, Nigeria and Ukraine, could soon run out of HIV treatments due to these aid cuts. In South Africa, HIV services have already been scaled back, with reports of mass layoffs of health workers and HIV clinic closures. These downstream cracks can undercut the gains from efforts to make procuring drugs more accessible if the drugs can't reach patients. Because HIV, tuberculosis and malaria often share the same treatment infrastructure – including drug procurement and distribution networks, laboratory systems, data collection, health workers and community-based services – disruption in the management of one disease can ripple across the others. Researchers have warned of a broader unraveling of progress across these infectious diseases, describing the fallout as a potential 'bloodbath' in the global HIV response. Research shows that supporting access to treatments around the world doesn't just save lives abroad. It also helps prevent the next global health crisis from reaching America's doorstep. This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Lucy Xiaolu Wang, UMass Amherst and Nahim Bin Zahur, Queen's University, Ontario Read more: Pharma's expensive gaming of the drug patent system is successfully countered by the Medicines Patent Pool, which increases global access and rewards innovation Cutting HIV aid means undercutting US foreign and economic interests − Nigeria shows the human costs Grassroots AIDS activists fought for and won affordable HIV treatments around the world – but PEPFAR didn't change governments and pharma The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
