Because the  Emergency Plan is largely funded under the Foreign Assistance Act of  1961, the purchase of ARVs with these funds is subject to a provision of  the act that prohibits the purchase of any medication manufactured  outside the United States if the manufacture of that medication in the  United States would be covered by a valid U.S. patent, unless the patent  owner gives its permission. Emergency Plan Provides Smaller Selection of ARV Products Than Other Initiatives

The Emergency Plan provides a smaller selection of ARV products than  the other initiatives. In addition  to ARV products that have met the Emergency Plan’s quality assurance  requirement, other initiatives also provide generic ARVs that have been  prequalified by WHO. Emergency Plan’s Selection of ARV Products Results in Higher Prices for Most First-Line Treatment Regimens

At the prices quoted to us during June and July 2004, most first-line  regimens could be built for a lower price with the generic ARV products  provided under the other initiatives than with the original ARV products  provided under the Emergency Plan. The difference in price  between the original ARVs provided under the Emergency Plan and the  lowest-priced generic ARVs provided under the other initiatives ranged  from $11 less per person per year for original 3TC to $328 more for  original NVP. 2.) At these prices, three of the four first-line  regimens could be built for a lower price with the generic ARV products  provided under the other initiatives than with the original ARV products  provided under the Emergency Plan. Differences in the price of a regimen per person per year can translate into  millions of dollars of additional expense when considered on the scale of  the Emergency Plan’s goal of treating 2 million people by the end of 2008. Coordinator’s Office Has Made Efforts to Expand the Selection of Quality- Assured ARV Products It Provides

The Coordinator’s Office has worked with FDA to expand the selection of  quality-assured ARV products, particularly the preferred FDCs, that the  Emergency Plan provides to the focus countries. Although the selection of ARV products available under the plan is  currently limited primarily by the quality assurance requirement, if generic  ARVs receive FDA approval, the patent requirement could be a barrier to  expansion. If such permission is not granted, this requirement could  prevent the purchase of generic ARVs, including generic FDCs, that have  met the plan’s quality assurance requirement. However, unless the patent holders for these  ARVs give permission or the Coordinator’s Office exercises its authority to  purchase these products notwithstanding the patent requirement, the  selection of ARVs provided under the Emergency Plan may not expand  rapidly enough to address the AIDS emergency. Appendix I: Scope and Methodology

This report compares the selection of antiretroviral medication (ARV)  products that are being provided under the President’s Emergency Plan  for AIDS Relief (Emergency Plan) with that provided under other  initiatives that also fund HIV/AIDS treatment programs in the focus  countries, as of December 2004. Our discussion is focused specifically on  the ARVs that are recommended by the World Health Organization (WHO)  for first-line treatment of HIV/AIDS in countries where health care  resources are limited. Examining the Efforts of the Coordinator’s Office to Expand the Selection of ARVs It Provides

To examine the efforts of the Coordinator’s Office to expand the selection  of quality-assured ARV products provided under the Emergency Plan to  the focus countries, we reviewed relevant laws, regulations, and guidance  from which the plan’s quality assurance and patent requirements arise. Global Health: The U.S. and U.N.
Why GAO Did This Study

In developing countries, only about 7 percent of people with HIV/AIDS receive treatment. In 2003, the Congress authorized the President's Emergency Plan for AIDS Relief, a 5-year, $15 billion initiative under the Office of the U.S. Global AIDS Coordinator. The Emergency Plan focuses on 15 developing countries, with a goal of supporting treatment for 2 million people. Treatment regimens use multiple antiretroviral medications (ARV), which can be original or generic. Fixed-dose combinations (FDC) combine two or three ARVs into one pill. Questions have been raised about whether the plan is providing ARVs preferred by the focus countries at reasonable prices. GAO compared the selection of ARVs provided under the plan with that provided under other major treatment initiatives, compared the prices of those selections, and determined what the Coordinator's Office is doing to expand the plan's selection of quality-assured lower-priced ARVs.

What GAO Found

The Emergency Plan provides a smaller selection of recommended first-line ARVs than other major HIV/AIDS treatment initiatives in developing countries. The plan's selection includes six original ARV products--the only ARVs that have met the plan's quality assurance requirement--and does not include some FDCs that are preferred by most of the focus countries because they can simplify treatment. In contrast, the other initiatives provide a selection that in addition to the six original ARVs includes generic ARVs and more of the preferred FDCs. The original ARVs provided under the plan are generally higher in price than the generic ARVs provided under the other initiatives. The differences in the prices, quoted to GAO during June and July 2004 by 13 manufacturers, ranged from $11 less to $328 more per person per year for original ARVs than for the lowest-priced corresponding generic ARVs provided under the other initiatives. At these prices, three of the four first-line regimens recommended by the World Health Organization could be built for less--from $40 to $368 less depending on the regimen--with the generic ARVs provided under the other initiatives than with the original ARVs provided under the plan. Such differences in price per person per year could translate into hundreds of millions of dollars of additional expense when considered on the scale of the plan's goal of treating 2 million people by the end of 2008. The Coordinator's Office has worked to expand the selection of quality-assured ARVs--including FDCs and lower-priced generics--that it provides to the focus countries under the plan. The selection of ARVs available under the plan is primarily limited by its quality assurance requirement. The Coordinator's Office is working with manufacturers to take the steps necessary for more ARVs to meet this requirement. However, if generic ARVs meet the plan's quality assurance requirement, a statutory prohibition on the purchase of any medication manufactured outside the United States if the manufacture of that medication in the United States would be covered by a valid U.S. patent could become a barrier to expansion because all ARVs are currently under U.S. patents. Unless the patent holders for ARVs that have met the plan's quality requirement give permission or the Coordinator's Office exercises its authority to purchase these products notwithstanding the patent requirement, the selection of ARVs provided under the Emergency Plan may not expand rapidly enough to address the AIDS emergency.