Roche resists pressure to cut flu drug price

Financial Times
Andrew Jack in Basel
November 10 2005


The manufacturer of the main drug to treat pandemic flu stood firm yesterday against pressure to cut prices in the developing world, while saying it would be able to fulfil all current orders by 2007.

William Burns, head of pharmaceuticals at Roche of Switzerland, said his company already offered the medicine, Tamiflu, to governments for pandemic stockpiles at a substantial discount to its normal price, and ruled out further reductions.

"When we set the prices, we went as low as we felt we could go," he said. "Till about one year ago we were still deep in the red on the drug," - forecast to generate $1bn (852m, 575m) for the company this year.

His comments came despite growing international concern about pricing, triggering threats to challenge Tamiflu patentsby developing countries, including those most likely to be first affected by a human version of the lethal avian flu.

At a media briefing to counter the criticism, Roche made public for the first time yesterday its Tamiflu pandemic stockpile price, at 15 ($18, 10) per course of 10 tablets for developed countries and 12 for least developed countries.

It sells the bulk "active pharmaceutical ingredient" (API) from which the final capsules are made at 7.70 and 7 respectively. That compares with 20-51 for a seasonal flu treatment.

Roche also published data showing Tamiflu production rising from 27m treatments in 2004 to 55m this year, with planned capacity rising to 150m in 2006 and 300m in 2007. Mr Burns said intellectual property considerations would not stand in the way of Tamiflu's availability, and he aimed to have a shortlist by the end of November of potential commercial partners from 150 proposals received.

He indicated partnerships would probably involve sub-contracting to expand capacity rather than full independent production. He added that Roche would work only with companies meeting quality and quantity criteria. His comments came as China and Vietnam indicated they planned to launch Tamiflu production, although Roche said it had not talked to the former while the latter project was likely to involving only packaging of the API.

Eugene Tierney, Roche's global head of virology and transplantation, said Tamiflu should not be compared with antiretroviral drugs to treat Aids, on which Roche and other suppliers have offered deep discounts to the developing world, because the latter was a chronic disease. He said price had not been a sticking point in negotiations, although only 50 countries have so far placed pandemic stockpile orders, nearly all from the developed world and just 10-15 covering 25 per centof their populations, the World Health Organisation's recommended level of cover.

Mr Burns also expressed hope for an amicable


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