Although no cure exists for HIV/AIDS, the use of multiple ARVs in combination has been shown to suppress the virus and slow the progression of the disease. Twenty distinct ARV medications can be used to treat people living with HIV/AIDS. The standard treatment is a regimen that combines three or more ARVs. People receiving ARV treatment can develop strains of HIV that are resistant to some or all of their ARVs, and as a result their treatment regimens become ineffective and they must switch to a different regimen. The risk of developing resistance decreases when patients are able to adhere to their recommended treatment by taking the prescribed ARVs, the right number of times each day, and without missing doses. WHO has recommended certain regimens for settings in which resources are limited. For people receiving ARVs for the first time in such settings, WHO recommends one of four regimens, known as first-line regimens. These regimens are built from combinations of the following five first-line ARVs: stavudine (d4T), zidovudine (ZDV), lamivudine (3TC), nevirapine (NVP), and efavirenz (EFV). (See fig. 1.) Of the four first-line regimens, WHO recommends d4T + 3TC + NVP as the first-choice regimen for rapid implementation of large-scale treatment programs in resource-limited settings because, for example, it is expected that most people will be able to tolerate it without developing side effects that would require switching to another regimen. Each of the focus countries highlighted in the Emergency Plan has selected one or more of these first-line regimens for its national treatment strategy, and most have selected d4T + 3TC + NVP as their first-choice regimen. For people who have developed strains of HIV that are resistant to their initial treatment regimen, WHO recommends one of four second-line regimens. The second-line regimens use a different set of five ARVs. Second-line regimens can have disadvantages, which may be magnified in resource-limited settings. The disadvantages include the need to take more pills, the potential for additional side effects, the need for refrigeration during transportation and storage, and prices that are generally higher than those for first-line regimens. WHO emphasizes that promoting better adherence to a first-line regimen, thereby reducing the occurrence of resistance and delaying the need to shift to a second-line regimen, is particularly important in resource-limited settings because of these disadvantages. The Coordinator’s Office, FDA, and the Institute of Medicine, as well as the Global Fund, the World Bank, UNAIDS, and WHO, have endorsed the use of FDCs, which combine two or more ARVs into one pill, as an important strategy to promote adherence to ARV regimens. These organizations have determined that the benefits of FDCs include promoting adherence, by reducing the number of pills a person has to take at one time, reducing the time and costs associated with procurement and distribution of ARVs, and simplifying the selection and prescribing of ARVs. Both national initiatives—such as the Emergency Plan—and multinational initiatives provide funding for HIV/AIDS treatment in the focus countries. In general, these initiatives provide their funding through grants, cooperative agreements, and contracts with governments and NGOs. The NGOs provide technical assistance and support the implementation of treatment programs by, for example, purchasing medications. In recognition of the fact that several initiatives may be active in any one country, the U.S. government and the multinational initiatives have agreed to promote coordination across their initiatives in order to use resources efficiently and effectively and to ensure rapid expansion of treatment programs. The Emergency Plan is the largest national initiative to combat the global HIV/AIDS epidemic. Through the Emergency Plan, the U.S. government both provides direct technical assistance through field offices and funds NGOs that support HIV/AIDS treatment programs in the focus countries. Under the direction of the Coordinator’s Office, USAID and HHS’s Centers for Disease Control and Prevention have primary responsibility for implementing the Emergency Plan, with USAID responsible for overseeing the purchase of medications. Multinational organizations, including the Global Fund and agencies within the UN system, also provide funding to HIV/AIDS programs in the focus countries. The Global Fund, which was initiated in 2002, expects disbursements to total $1 billion by the end of 2004, over half of which are intended to fund HIV/AIDS programs. Within the UN system, the World Bank represents the largest source of funding for HIV/AIDS activities in developing countries. Since 1986, the World Bank reports that it has invested $2 billion in HIV/AIDS prevention, care, and treatment services in developing countries. All HIV/AIDS treatment programs must comply with the laws—including patent and drug registration laws—that apply in the country for which they are purchasing ARV products, as well as the requirements that pertain to the source of funding they are using. The purchase of ARVs under the Emergency Plan is subject to USAID quality assurance requirements and a statutory patent requirement. To assure quality, USAID requires that ARV products purchased under the plan have either FDA approval or the approval of another acceptable regulatory authority. 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. The purchase of ARV products with funds from the other initiatives must meet the quality assurance requirements that the World Bank, UNICEF, and the Global Fund have in common. Specifically, these organizations require that all ARV products either be approved by an acceptable regulatory authority such as FDA or be prequalified through WHO’s Prequalification Project. WHO’s Prequalification Project includes a process for assessing the quality of products that have not been subject to review by an acceptable regulatory authority. Prequalification relies on review of product information and manufacturing site inspections to determine if the product meets WHO standards. The Emergency Plan provides a smaller selection of ARV products than the other initiatives. Because the plan provides only ARV products that have been approved by FDA or another acceptable regulatory authority, it provides six ARV products, all of which are original versions. 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. While the plan does not provide the FDCs preferred by the focus countries, these products are available through the other initiatives. As of December 2004, the Emergency Plan provides one version—the original version—of each of the five ARVs necessary to build all of the first-line regimens. The plan also provides a double-ARV FDC (ZDV + 3TC) that can be used in half of those regimens, but not the regimen that is recommended by WHO as the first choice for rapid implementation of large-scale HIV/AIDS treatment programs in resource-limited settings (d4T + 3TC + NVP). These six products, flagged with filled diamonds in figure 2, are the only first-line ARVs that have been approved by FDA or another acceptable regulatory authority and thus comply with the plan’s quality assurance requirement. Because no generic ARVs currently meet the plan’s quality assurance requirement, the Emergency Plan does not provide generic versions of any of the first-line ARVs or the double-ARV FDC provided under the plan. In addition, the Emergency Plan does not provide any version of three other FDC products that are generally available to the focus countries, including the triple-ARV FDC (d4T + 3TC + NVP) that is preferred by the majority of the focus countries. The other initiatives provide not only the original versions of the first-line ARVs but also generic versions that meet their quality assurance requirements. In addition to ARVs that have been approved by FDA or another acceptable regulatory authority, the other initiatives also accept those that have been prequalified by WHO. Thus the other initiatives provide generic versions of most of the first-line single ARVs, as well as a double-ARV FDC (ZDV + 3TC) and a triple-ARV FDC (d4T + 3TC + NVP), flagged with unfilled diamonds in figure 2, that are not provided under the plan. Other generic versions of all ARV products are available to the focus countries but are not provided under the Emergency Plan or under the other initiatives. The additional generic ARVs generally available to the focus countries, shown in figure 2 as vertical lines without diamonds, have been neither approved by FDA or another acceptable regulatory authority nor prequalified by WHO. 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. (See table 1.) 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. (See fig. 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. The difference in price for these three regimens when built with the lowest-priced ARVs provided under the other initiatives and when built with the lowest-priced ARVs provided under the Emergency Plan ranged from $40 less per person per year for the regimen ZDV + 3TC + EFV to $368 less for the regimen ZDV + 3TC + NVP. There was no difference in price for the regimen d4T + 3TC + EFV because the lowest-priced ARVs provided under the Emergency Plan and the other initiatives are the same. All of the first-line regimens could be built for a lower price using the lowest-priced generic ARVs that are generally available to the focus countries but not provided under either the Emergency Plan or the other initiatives. 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. For example, the price for the regimen that WHO recommends as the first choice for rapid scale-up in settings with limited health care resources (d4T + 3TC + NVP) is $343 more per person per year under the Emergency Plan. Thus for every 100,000 patients on this regimen for 5 years, the plan could pay over $170 million more than the other initiatives for purchase of these ARVs. The overall impact of these price differences over the life of the plan and on the treatment goal is difficult to estimate precisely because, for example, the mix of ARVs and treatment regimens that will be used as the Emergency Plan expands is unknown and product prices may change. The Coordinator’s Office has taken steps to expand the selection of quality-assured ARV products it provides to the focus countries to include the preferred FDCs and lower-priced generics. However, the patent requirement could present a barrier to expanding the selection. 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. The selection of ARV products provided is currently limited primarily by the plan’s quality assurance requirement. The Coordinator’s Office has been encouraging manufacturers to seek FDA approval for their ARV products, and thereby satisfy the plan’s quality assurance requirement. FDA officials told us that the agency has been helping existing and potential manufacturers of ARV products, particularly FDCs, to prepare applications for submission to FDA. Several manufacturers told us that they have been working with FDA to develop applications. One of the manufacturers we spoke with announced in October 2004 that it had submitted an application, and the others told us that they intended to do so. FDA officials said that these applications would have priority for review and that they expect to be able to act on complete applications within several months of submission. In addition, the Coordinator’s Office has worked with FDA to clarify that FDCs are eligible for expedited review and to assemble into a single guidance document several sets of regulations and guidelines that pertain to this expedited review. As part of this guidance, FDA has included a list of combinations of ARVs for which FDA believes there are sufficient publicly available safety and effectiveness data that an application would not need to include additional clinical studies. The Emergency Plan may not be able to expand the selection of ARV products it provides to include lower-priced generic ARVs unless the Coordinator’s Office addresses a potential barrier presented by the applicable patent requirement in the Foreign Assistance Act of 1961. 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. Because all five of the first-line ARVs are currently under U.S. patents, even if a generic ARV were to receive FDA approval, thus meeting the plan’s quality assurance requirement, the patent requirement would prevent its purchase unless the patent holder had granted permission. 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. The Coordinator’s Office has the authority to provide ARV products notwithstanding the patent requirement. We asked officials from the Coordinator’s Office whether the Coordinator would use this authority in order to purchase an FDA-approved generic ARV for which permission could not be obtained from the patent owner. Officials from the Coordinator’s Office told us that they could not address hypothetical situations but that the Coordinator would consider using his authority to make funds available to purchase these products notwithstanding this requirement if the ARV in question is critical to the plan’s treatment responsibilities and no readily available substitute exists. It may not be possible for most generic ARVs to meet these conditions because generics are by definition substitutes for existing products. In addition, a representative of one of the generic manufacturers we spoke with told us that the company is concerned and is hesitating to apply to FDA because it has sought, but not yet obtained, assurances from the Coordinator’s Office that once its products have met the plan’s quality assurance requirement these products will be eligible for purchase under the Emergency Plan. During its first year, the Emergency Plan has provided a limited selection of ARV products that does not fully support the treatment strategies of the focus countries and is not optimally coordinated with other multinational initiatives because it does not include the FDCs and lower-priced generics that the majority of these countries prefer. Better coordination with the focus countries and with other treatment initiatives could facilitate more rapid implementation of the Emergency Plan. Moreover, given the intended scale of the plan, lower prices for ARVs could result in savings of hundreds of millions of dollars, which could be used to treat additional patients or to support other aspects of the program. The Coordinator’s Office has taken steps to expand the selection of ARV products that meet its quality assurance requirement—with special focus on FDCs—by working with manufacturers and FDA to increase the number of products that have FDA approval. If applications proceed as anticipated by ARV manufacturers and FDA, we expect that FDA-approved generic ARVs will be available early in 2005. 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. We provided a draft of this report to the Department of State, HHS, and USAID. Written comments submitted by the Department of State on behalf of itself, HHS, and USAID are reprinted in appendix III. In its comments, the Department of State expressed concern about how our report addressed the issue of ARV quality and urged us to mention prominently in the report recent changes in the list of products that are prequalified by WHO. However, we stated in the draft report that concern about quality is the primary factor limiting the selection of ARVs provided under the Emergency Plan and the other initiatives. Our draft report recognized that quality assurance is a critical concern, and provided background information on the quality assurance requirements of the Emergency Plan and the other initiatives and specified the quality assurance processes applied to each ARV product. However, as the draft report stated, evaluating the quality assurance processes used by each initiative was beyond the scope of our work. We have updated the draft report to reflect all changes in the availability of ARV products, including those highlighted by the Department of State. The Department of State also characterized figure 3 (see app. II) in the report as misleading because not all of the generic ARV products are sold on the market in all 15 focus countries. However, the draft report explained that the laws of individual countries may not allow for the purchase of some products. In response to the agency’s concerns, we clarified this further in notes to figure 3. In addition, the agency expressed confusion over our use of the term “generic” and offered the more formal term, “therapeutic equivalents,” used by FDA. In the draft report, we used the word “generic” broadly to mean a copy of an original product, regardless of whether FDA or another national regulatory authority has determined the generic product to be a therapeutic equivalent to an original product. We have further clarified our use of the term in the report. We agree with the agency’s comment that it is important to distinguish between issues of quality assurance and intellectual property, and these issues were treated separately in the draft report. In addition, our concern about the patent requirement being a potential barrier to expanding the selection of ARV products provided under the Emergency Plan is only with respect to those generic products that have first met the plan’s quality assurance requirement. Lastly, the Department of State highlighted that the patent requirement is a statutory restriction under the Foreign Assistance Act of 1961, as we noted throughout the draft report. We revised the draft to further clarify the source of the patent requirement. The Department also said that the Coordinator’s Office has decided to exercise its authority with respect to the patent requirement “as necessary.” However, because the comments did not clarify when it might be necessary for the Coordinator’s Office to use its authority to make funds available to purchase products notwithstanding the patent requirement, it remains unclear if all generic products that have met the quality assurance requirement will be eligible for purchase under the Emergency Plan. In its comments, the agency also provided additional information on the Emergency Plan’s outreach activities and plans for bulk purchasing of ARV products. The Department of State, HHS, and USAID individually submitted technical comments, which we incorporated where appropriate. As we agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution of it until 30 days from the date of this letter. We will then send copies to the Secretary of State, the Secretary of Health and Human Services, and the Administrator of the U.S. Agency for International Development and make copies available to others who request them. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov. If you or your staffs have any questions about this report, please call me at (202) 512-7119. Another contact and key contributors are listed in appendix IV. 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. Our report also provides price information for the ARV products provided under the Emergency Plan and under the other initiatives. We report prices quoted, during June and July 2004, by 13 selected manufacturers of ARV products that are generally available to the focus countries. Lastly, we examine the efforts of the Office of the U.S. Global AIDS Coordinator (Coordinator’s Office) within the Department of State to expand the selection of quality-assured ARV products provided at the lowest possible price to the focus countries. Aspects of implementing HIV/AIDS treatment programs other than the selection and price of medications, such as human resources and supply chain management, and treatments other than ARVs, such as medications to treat opportunistic infections, are outside the scope of this report. Similarly, the HIV/AIDS prevention and care objectives of the Emergency Plan are outside the scope of this report. We conducted our review from January 2004 through January 2005 in accordance with generally accepted government auditing standards. To compare the selection of ARV products provided under the Emergency Plan to that provided under the other initiatives, we reviewed the requirements that apply to the purchase of ARV products under the Emergency Plan. Specifically, we reviewed relevant laws, regulations, and guidance from which the plan’s requirements arise. We also reviewed documentation from the Coordinator’s Office and the U.S. Agency for International Development (USAID) to determine which products had been provided under the plan as of December 2004. In addition, we interviewed officials from the Coordinator’s Office, USAID, and the Department of Health and Human Services’ (HHS) Office of Global Health Affairs, Centers for Disease Control and Prevention (CDC), and Food and Drug Administration (FDA) about experience within federal programs with purchasing ARVs for developing countries. Lastly, we interviewed officials at the nongovernmental organizations (NGO) that have received funding under the Emergency Plan to purchase ARVs in the focus countries. These NGOs include Catholic Relief Services Consortium, Columbia University Mailman School of Public Health, Elizabeth Glaser Pediatric AIDS Foundation, and Harvard University School of Public Health. To determine the selection of ARV products provided under the other initiatives, we reviewed the requirements that apply to the purchase of ARV products under the HIV/AIDS treatment initiatives funded by the World Bank, the United Nations Children’s Fund (UNICEF), and the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund). Specifically, we reviewed guidance documents from the Global Fund, the World Bank, UNICEF, and WHO related to the purchase of ARVs under these initiatives. We also interviewed officials from these organizations regarding the requirements that apply to the provision of ARVs under their treatment initiatives and to confirm the accuracy of information obtained from their Web sites. In our comparison we determined the quality assurance process applied to each product, but we did not evaluate the different quality assurance processes required under the Emergency Plan as compared with those required under the other initiatives or determine the comparative quality of the products. Our review of the ARV products provided under the Emergency Plan and the other initiatives focuses specifically on the ARVs that are recommended by WHO for treatment of HIV/AIDS in countries with limited health care resources. In order to determine the appropriate treatment recommendations to focus on in this report, we reviewed literature on the use of ARVs in general and in countries with limited health care resources in particular. Our literature review included searches of scientific publications using electronic databases, including the National Library of Medicine’s PubMed, as well as the Web sites of the New England Journal of Medicine, the Journal of the American Medical Association, and The Lancet. We reviewed literature on ARV treatment available from the Coordinator’s Office, USAID, HHS, FDA, CDC, the HHS Office of the Inspector General, the Congressional Research Service, the Congressional Budget Office, and the Institute of Medicine. We also reviewed treatment guidelines and related documentation from WHO, the Global Fund, the World Bank, the Joint United Nations Programme on HIV/AIDS, UNICEF, and the United Kingdom’s Department for International Development. We also interviewed officials from several of these organizations. To understand the issues involved in providing ARVs in countries with limited health care resources, we interviewed officials from several NGOs that are working in these settings—including Doctors Without Borders, the William Jefferson Clinton Foundation (Clinton Foundation), the Bill and Melinda Gates Foundation, John Snow Incorporated (JSI), Family Health International (FHI), and Management Sciences for Health (MSH). We also reviewed documentation on the focus countries’ national HIV/AIDS strategies and treatment guidelines, including information that we obtained from the Coordinator’s Office and NGOs. The prices we report are prices that 13 selected manufacturers quoted to us during June and July 2004 for the focus countries. We surveyed the manufacturers from which the major organizations that support treatment programs in the focus countries have considered purchasing their ARVs. These organizations include JSI, FHI, MSH, the Clinton Foundation, the Global Fund, the World Bank, WHO, UNICEF, Doctors Without Borders, the International Dispensary Association, and MissionPharma. We selected a manufacturer for inclusion in our report if it makes at least one of the ARVs included in the WHO-recommended first-line regimens and was selling or willing to sell its ARV product to at least one of the focus countries. Thirteen of the 15 manufacturers that we considered met these criteria and were willing to quote their prices for the first-line ARVs for the focus countries. We did not select products based on registration with the focus countries’ national drug regulatory authorities because information on country-level registration was incomplete or not available. Because some of the manufacturers we surveyed offer their products at significantly lower prices to developing countries than to developed countries, we requested price quotes specifically for the focus countries. We did not attempt to determine the prices that specific purchasers are paying for these products because at the time we conducted our analysis there was limited experience in the focus countries with using the funding sources discussed in this report for large-scale purchase of ARVs. Because different manufacturers offer their reduced prices according to differing criteria, in some cases the lowest price offers are not available to all of the focus countries. Specifically, Guyana and Vietnam are not eligible to purchase ARVs at some manufacturers’ lowest price. In addition to these two focus countries, other developing countries outside the scope of this report may not be eligible for the prices we present. To help ensure that the manufacturers’ prices we present are as comparable as possible across different manufacturers of the same ARV, we surveyed manufacturers using a standard set of questions. We developed our questions on the basis of our literature review and discussions with various officials from U.S. government agencies, officials from other initiatives, representatives from NGOs, and representatives from pharmaceutical manufacturers. These questions took into account differences in purchasing agreements, including price negotiation based on volume and length of contract, inclusion of shipping and insurance, and financing guarantees. Some of the manufacturers we spoke with told us that they offer prices that are negotiable depending on the volume of the purchase, the length of the contract for purchase, and the degree to which financing can be guaranteed. Therefore we requested prices based on the following purchase scenarios, all of which assume financing has been guaranteed: (1) purchase of enough medication to treat 500 patients for 1 year, (2) purchase of enough medication to treat 10,000 patients for 1 year, and (3) purchase of enough medication to treat 10,000 patients for 3 years. All manufacturers were given the opportunity to provide prices according to these scenarios, although some told us that their prices were not negotiable. We developed the scenarios based on estimates of the scale of existing treatment programs in the focus countries, and the potential scale of programs over the next 3 years. We verified, with officials from USAID and other experts in ARV procurement, that these scenarios represented plausible purchasing arrangements both now and over the next 3 years as treatment programs expand in developing countries. Because the price information we requested is considered proprietary by the manufacturer, we could not directly assess the reliability of the price data given to us. However, we checked the prices quoted to us against other published sources from our literature search and manufacturers’ Web sites and determined they were reliable for our purposes. In some cases a manufacturer’s prices include costs that other manufacturers do not include—such as shipping and insurance charges. We note where these differences exist, and have determined that they do not undermine the essential comparability of the prices presented in our report. In making this determination, we first requested specific information from each manufacturer about what is included in its price and the terms of the purchase agreements it uses. The manufacturers we surveyed for this report used one of six standard agreements to cover shipping and insurance (see table 2). We also asked multiple purchasers about the shipping and insurance costs they have incurred when purchasing ARVs. While systematic evidence was not available, the organizations we spoke with provided estimates ranging from 3 to 15 percent additional cost for shipping and insurance for large-scale ARV purchases. One NGO that was purchasing ARVs under the Emergency Plan told us that purchasing the same ARV product through two different distribution channels—one directly from the manufacturer with shipping and insurance costs included in the price and one through a distributor that added those costs to its price—made no appreciable difference in the final cost of the product. We also found, after reviewing responses to our survey, that manufacturers of both original and generic products used a range of purchase agreements, both more and less inclusive of shipping and insurance costs. Other factors that may contribute to the total cost of ARVs to a specific treatment program, such as taxes and distribution surcharges, are beyond the scope of this report. 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. We interviewed officials from the Coordinator’s Office and USAID regarding how they interpret these laws, regulations, and guidance and how they apply these requirements to the provision of ARVs under the plan. We also interviewed officials from the Coordinator’s Office regarding their efforts to address potential barriers to expansion. Lastly, because the Coordinator’s Office is working with FDA to support the ability of additional ARV manufacturers to meet the Emergency Plan’s quality assurance requirement, we interviewed officials from FDA regarding these efforts. We surveyed the following 13 manufacturers during June and July 2004 to obtain price quotes for the focus countries for the ARVs used to build the WHO-recommended first-line regimens: Aurobindo Pharma Limited (Aurobindo) Boehringer Ingelheim (BI) Bristol-Myers Squibb Company (BMS) Cipla Limited (Cipla) Combino Pharm Cristalia Produtos Quimicos Farmaceuticos LTDA (Cristalia) Far-Manguinhos FIOCRUZ Ministry of Health (Far-Manguinhos) GlaxoSmithKline (GSK) Government Pharmaceutical Organization Thailand (GPO) Hetero Drugs Limited (Hetero) Merck & Co., Inc. (Merck) Ranbaxy Laboratories Limited (Ranbaxy) Strides Arcolab Limited (Strides) The price per person per year for each ARV product—stavudine (d4T), zidovudine (ZDV), lamivudine (3TC), nevirapine (NVP), and efavirenz (EFV)—is shown in figures 3 and 4. Figure 3 shows prices quoted for single-ARV products, and figure 4 shows prices quoted for fixed-dose combination (FDC) ARV products. For each product we indicate the type of standard agreement used to cover shipping and insurance charges and whether the manufacturer indicated that the price quoted was negotiable or based on a specific purchase scenario (see figure notes a, b, and c). Both figures also show which ARV products are provided under the Emergency Plan, which additional products are provided under the other initiatives, and which products are generally available to the focus countries but not provided under either the Emergency Plan or the other initiatives, as of December 2004. Other key contributors to this report are George Bogart, Chad Davenport, J. Alice Nixon, Nkeruka Okonmah, and Roseanne Price. Global Health: U.S. AIDS Coordinator Addressing Some Key Challenges to Expanding Treatment but Others Remain. GAO-04-784. Washington, D.C.: July 12, 2004. United Nations: Reforms Progressing, but Comprehensive Assessments Needed to Measure Impact. GAO-04-339. Washington, D.C.: February 13, 2004. Global Health: Global Fund to Fight AIDS, TB and Malaria Has Advanced in Key Areas, but Difficult Challenges Remain. GAO-03-601. Washington, D.C.: May 7, 2003. Global Health: Assessment of First Year Efforts of the Global Fund to Fight AIDS, TB and Malaria. GAO-03-755T. Washington, D.C.: May 7, 2003. The Global Fund to Fight AIDS, Tuberculosis, and Malaria Has Been Established but It Is Premature to Evaluate Its Effectiveness. GAO-02- 819R. Washington, D.C.: June 7, 2002. Foreign Assistance: USAID Relies Heavily on Nongovernmental Organizations, but Better Data Needed to Evaluate Approaches. GAO-02- 471. Washington, D.C.: April 25, 2002. Global Health: Joint U.N. Programme on HIV/AIDS Needs to Strengthen Country-Level Efforts and Measure Results. GAO-01-625. Washington, D.C.: May 25, 2001. Global Health: U.S. Agency for International Development Fights AIDS in Africa, but Better Data Needed to Measure Impact. GAO-01-449. Washington, D.C.: March 23, 2001. Global Health: The U.S. and U.N. Response to the AIDS Crisis in Africa. GAO/T-NSIAD-00-99. Washington, D.C.: February 24, 2000.

Summary: 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. 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.