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Policy Coherence To Boost East Africa Pharmaceutical Industry


Intellectual Property Watch

02/10/2015 BY  FOR INTELLECTUAL PROPERTY WATCH

KAMPALA, UGANDA – The pharmaceutical industry in the East African Community is approaching a higher level of production quality and manufacturing practices. To benefit the industry and increase access to medicines, stakeholders are working towards a united regulatory policy framework aimed at harmonising industrial, health and regulatory policies. 

“The main objective of the industrial policy is to develop a viable local industry which is competitive, reliable, innovative, productive and responsible,” said Ermias Biadgleng, legal affairs officer, United Nations Conference on Trade and Development (UNCTAD). “While the main aim of the health policy is to promote health for all through universal health coverage in terms of prevention, treatment and rehabilitation.”

Biadleng was moderating a panel of experts attending a regional pharmaceutical workshop on policy coherence for local production of pharmaceutical products and other means to improve access to medicine and medical products in the East African Community, held in Kampala, Uganda from 21-23 September. The workshop was organised by UNCTAD, Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ) and the East African Community (EAC) Secretariat.

EAC has so far adopted the Regional Pharmaceutical Manufacturing Plan of Action, 2012-2016, the Regional Intellectual Property Policy on the Utilisation of Public Health-Related WTO-TRIPS Flexibilities and the Approximation of National Intellectual Property Legislation, 2013. TRIPS is the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights, which contains flexibilities for developing countries in enforcing the agreement.

“The East African Community Regional Pharmaceutical Manufacturing Plan of Action, 2012-2016, (RPMPOA) is a regional roadmap to guide the East African Community towards evolving an efficient regional pharmaceutical manufacturing industry that can supply national, regional and international markets with safe, efficacious and quality medicines,” said Jennifer Gache, Senior Industrial Engineer, EAC Secretariat.

The RPMPOA is divided into six strategic intervention pillars, which if effectively implemented are expected to lead to a strong local pharmaceutical industry. Implementation of RPMPOA is part of the EAC Industrialization Policy and Strategy, which has prioritized the development of regional pharmaceutical industry among regional industries through collective efforts of the EAC partner states.

According to Thomas Walter, “The implementation of RPMPOA has been much more successful than anticipated. It will be revised next year for the next five years. The next action plan will have a bigger scope, focusing on those areas which have been a bit neglected in the ongoing plan.”

Walter is the senior adviser Industrialization, TRIPS and Pharmaceutical Sector Promotion, EAC-GIZ Programme on Regional Integration.

“We have not had any significant utilization of the TRIPS flexibilities neither by companies nor by governments in the EAC,” said Thomas. “The reasons are complex. One of the main reason companies are not utilizing TRIPS is because all the pharmaceutical products produced locally are generics, and production of generic medicines do not require utilization of TRIPS flexibilities. This situation may change in future as we are moving to new treatment regimes.”

Utilization of TRIPS flexibilities towards improved local production of pharmaceuticals is pillar 5 of the RPMPOA.

World Health Organisation describes a generic drug as “a pharmaceutical product, usually intended to be interchangeable with an innovator product that is manufactured without a licence from the innovator company and marketed after the expiry date of the patent or other exclusive rights.”

In a presentation from the private sector perspective titled, The State Of EAC Internal Market And ECT: Implications For Drug Policy (pdf), Pierre Claver Niyonizigiye from Siphar Pharmaceutical Manufacturers, in Burundi, revealed that according to 2014 RPMPOA estimations, the market share of locally produced pharmaceutical drugs per country is: Kenya 30% of the estimated 558 USD million market, Tanzania 31% of the estimated 350 million USD market, Uganda 5% of the 270 million USD market, Rwanda 0.00% of the 75 million USD market, and Burundi 3% of the 75 million USD market.

The region has about 65 pharmaceutical companies, with Kenya having 42 of the companies.

With the enactment of the EAC Common Markets Protocol, the pharmaceutical industry now has a regional market of over 143.5 million people. Trade between EAC partner states in pharmaceutical products in 2011 was estimated at USD 264 million. This situation presents both opportunities and challenges to the pharmaceutical sector in the region given that only 30 percent of the medicines demand is met through local production.

According to Thomas, “the main cause for this is lack of access to a competitive market. Once the manufacturers have access to a bigger market, not only the national public procurement but also the international procurement agency, the utilized capacity will shoot up.”

Article 35, of the Common Market Protocol calls on partner states not to discriminate against suppliers, products or services originating from other partner states, for purposes of achieving the benefits of free competition in the field of public procurement.

“Many of the procurement laws of the partner states have not adapted to the regulation of the common market protocol even though the heads of state have committed to this protocol,” Thomas said. “It’s up to the heads of government to enforce the required approximation of the legal framework in order to actually create this market. National procurement laws and regional common market still have elements of incoherence which need to be eliminated.”

The EAC governments are the largest clients for the region’s local pharmaceutical products. The preferred method of procurement is international competitive bidding. Other methods used are restricted procurement, direct purchase and local tenders. The source of funds for this procurement comes from revolving funds, government funding from the central government and complementary financing, and grants from Global Fund for AIDS, Tuberculosis and Malaria and development partners.

To assist the manufacturers develop their capacity, EAC governments have provided a number of policy incentives. These include: tax and customs exemption, price control, preferential procurement and import classification.

In the EAC treaty, Chapter 21, Article 118 provides for developing a common regional medicines policy, which includes establishment of quality control capacities, good procurement practices and harmonisation of drug registration procedures.

Benchmarking

Regional economic communities can borrow from each other aspects of regulatory framework. The EAC is borrowing from the Ghana model, whose government has established a very supportive system to develop the local pharmaceutical industry over the last 20 years.

Kwabena Asante-Offie represented the Pharmaceutical Manufacturers Association of Ghana at the conference. “In East Africa,” he said in a panel discussion, “the industry sector is leading the development of the pharmaceutical sector. While in West Africa, it was the ministry of health that led the development of a robust pharmaceutical industry”. This is because the industry started more as a public health concern rather than an industrial development strategy.

Other Policies

Other key policy and regulatory initiatives of EAC are at the working stage. These include an EAC Anti-Counterfeit Bill (2013) which is being modelled into the Competition Act, the proposed African Community Medicines and Food Safety Commission Bill, the Medicines Registration Harmonization initiative, launched in 2012, and the procurement of essential medicines and health supplies.

Ghana should repay $3.8 million to Global Fund in faulty condom deal


Lauren Gelfand
December 11,  2014

condoms1

 

 

Tender for more than 120 million condoms was riddled with fraud — and the goods were bad

Ghana’s Ministry of Health spent some $3.8 million of a Global Fund grant on faulty condoms procured in a tender that was riddled with fraud, the Office of the Inspector General has found. In addition to developing a plan to recover the funds, the Secretariat will be placing all purchasing for Ghana under the pooled procurement mechanism and requiring greater oversight by the local fund agent.

The investigation report published on 11 December confirmed that the procurement of 128 million male condoms purchased for the Ghana Health Service between 2010 and 2013 were “substandard, over-priced and bought through a non-competitive tender process involving forged documents”.

The tendering process was flawed from the outset, according to the report. Advertised only locally for a very short time period, the bid was whittled down to a single source with the immediate disqualification of two other bidders. An evaluation by the Ghana Central Tender Board was not reviewed, making the process decidedly untransparent.

Only a month after the bid was approved, the MoH agreed to a 35% per unit cost increase — an increase worth nearly $1 million over what had been a fixed-price contract that was ostensibly not subject to adjustments. According to the investigation, there is no evidence that the supplier, Global Unilink, provided the Ghana Health Service with documentation including market-pricing data to justify the price increase.

Moreover, the tender was predicated on the provision of falsified documents. Global Unilink provided misleading information related to where the condoms were manufactured, including a falsified manufacturer’s certificates that declared the condom manufacturer was WHO-certified.

This led to the other major problem: the condoms were of decidedly inferior quality. The investigation confirmed that the supplier did not source the product from a WHO-certified manufacturer, as it had been contracted to do. The purchased prophylactics did not meet WHO specifications or standards, even though the samples submitted during the tender for quality tests did come from a WHO-certified manufacturer. What this means is that quality condoms were provided for testing and low-quality ones supplied for use.

These quality issues came to light when end users reported that they burst too easily, did not contain enough lubricant and, according to one Ghanaian media report, were not big enough.

Why the Ghana Health Service failed to continue to carry out quality control tests on the Be Safe condoms remains to be seen; going forward, Aidspan understands from the Global Fund Secretariat: “the Secretariat will provide the Ghana Food and Drug Authority with advance notice of the dispatch of critical health products and commodities procured for Global Fund programs from whatever source. The LFA will verify the quality testing has been conducted before distribution.”

Other safeguards have been put in place, specifically related to the procurement of health products and commodities for Ghana. Since 2012, Ghana has been enrolled in the pooled procurement mechanism and global drug facility, meaning that ARVs, HIV test kits, drugs and diagnostic kits for malaria and TB drugs are all now procured by the Global Fund on Ghana’s behalf. The MoH is now only responsible for the procurement of products such as gloves and cotton swabs.

The Secretariat should pursue the recovery of the full $3.84 million spent on the faulty condoms — funds that Ghana itself has since 2013 been seeking from the supplier, Global Unilink, according to Ghanaian media reports.

A majority of the faulty condoms remain undistributed, stored in an MoH warehouse that, itself, has been subject to major scrutiny for the poor quality and conditions. In one Ghanaian media report, the facility was described as having a leaky roof and poor temperature controls — less than ideal conditions even at the best of times. The condoms are to be withdrawn and destroyed by the MoH and Ghana Health Service in line with “international procedural and environmental regulations” — whether this will happen is unclear.

Ghana has a generalized HIV prevalence rate of under 2% but within certain key populations, including commercial sex workers and men who have sex with men, the rate is considerably higher. Results from a demographic and health survey supported by the Global Fund should be published in 2015: the best way to determine whether there has been an increase in infection rates. It will not, however, be possible, to make any causatory inference that a spike in infections is due to the use of these problematic prophylactics.

Procurement irregularities and over-pricing in Madagascar


www.aidspan.org

by David Garmaise

January 8, 2014

Suppliers alleged to have colluded on bids

An investigation by the Office of the Inspector General (OIG) into procurement contracts for five malaria grants to Madagascar has found evidence of non-compliant expenditures, over-priced goods and collusion among suppliers. A report on the investigation was released on 3 January.

Procurement activities from four Round 9 grants under investigation involved two government and two non-government bodies: the central support office for health sector projects (UGP: Unité de Gestion des Projets d’Appui au Secteur de Santé ) and the central governments health products procurement office (SALAMA: Centre d’Achats de Médicaments et de Matériel Médical); Pact and the Madagascar intercooperation association (AIM: Association Intercoopération Madagascar). Procurement activities under a Round 7 grant were also investigated, with UGP as the PR.

By April 2012, when the investigation was launched, some $70.8 million had been disbursed over the five grants; expenditures of $12.2 million were examined.

The investigation has implicated three of the four PRs in non-compliant expenditures worth some $1.1 million, including $462,670 in over-pricing; only AIM was exonerated for any suspect spending.

Table: Summary of non-compliant expenditures and amounts of over-pricing identified by the OIG

PR Grant

Disbursed as of 30 April 2012

Reviewed by the OIG

Amount of non-compliant expenditures

Of which, amount of over-pricing

UGP MDG-910-G17-M

$8,867,217

$6.0 m.

$843,600

$382,937

MDG-708-G09-M

$24,170,652

Pact MDG-910-G19-M

$13,741,533

$1.4 m.

$299,672

$74,464

SALAMA MDG-910-G16-M

$16,397,630

$ 2.3 m.

$17,068

$5,269

AIM MDG-910-G18-M

$7,652,053

$2.5 m.

NIL

NIL

Totals

$70,829,085

$12.2 m.

$1,160,340

$462,670

 

With respect to the grants administered by UGP, the OIG uncovered evidence that groups of vendors colluded and submitted bids for procurement contracts that had not been independently prepared. In a restricted national tender launched by UGP in 2010 for supplies and equipment for an indoor residual spraying campaign, the OIG found that contracts worth $640,146 were compromised; of this amount, slightly more than half was charged at above-market rates.

Such practices needed the collusion of a procurement unit official, according to the OIG.

The grant administered by Pact required the PR to use SALAMA as a procurement agent. During 2011–2012, Pact entered into three contracts with SALAMA. The OIG found that two of the contracts – $270,643 for laboratory equipment and $29,029 for rapid diagnostic tests – were overpriced by $74,464 in total. The OIG said that Pact exercised insufficient oversight of the contracting process with SALAMA. However, the OIG acknowledged that Pact undertook corrective measures shortly after the issue was raised, and managed to recover some of the excess.

With respect to the grant for which SALAMA was PR, the OIG said that in January 2011, a contract was awarded for $17,068 to IDA Foundation to supply an anti-malarial medicine manufactured by REMEDICA, a supplier approved by the World Health Organization.

However, the medicines actually delivered by IDA and distributed by SALAMA were produced by another manufacturer, Guilin Pharmaceuticals, which was not an approved supplier, resulting in an overcharge of roughly $5,000.  IDA has since committed to refund the excess charges.

The OIG found fault with SALAMA, IDA and the local fund agent (LFA) for the fact that the wrong drugs were distributed to patients.

An annex to the report included detailed comments from the UGP, Pact and SALAMA on an earlier draft of the report. These comments prompted changes to the final report.

In an attached letter, the Global Fund’s executive director, Mark Dybul, said that the Secretariat has moved to respond to the findings, including limiting the scope of the grants to essential malaria activities; suspending the signing of Phase 2 of the UGP NSA grant; moving to 100% verification by the LFA; and requiring pooled procurement for most commodities. SALAMA has also been removed as a PR, and its grant is in closure. A recovery plan should be in place by March 2014, Dybul added.

Separately, the OIG said it had been advised of the findings of a forensic audit commissioned by Pact and conducted on one of Pact’s sub-recipients. The OIG said that the audit identified procurement irregularities, which will be followed-up directly by the Global Fund Secretariat.

The report of the OIG investigation can be found on the Global Fund website here.

Regional and temporal trends in malaria commodity costs: an analysis of Global Fund data for 79 countries


AllAfrica.com

By Lauren Gelfand and Karanja Kinyangui

January 8, 2014

ANALYSIS

Aidspan is pleased to share three recently published peer-reviewed articles that support our work as monitors of the Global Fund. All conclusions drawn within these academic papers remain the purview of their authors and do not reflect the opinions of Aidspan.

Regional and temporal trends in malaria commodity costs: an analysis of Global Fund data for 79 countries

When a market functions well, commodity prices are determined by the forces of supply and demand, with competition driving prices lower for consumers. Health care markets, however, do not often work this way. Asymmetrical information means that supply of commodities can be interrupted, creating an artificial monopoly that keeps prices high.

In a paper published in the Malaria Journal, authors Frank Wafula, Ambrose Agweyu and Kate Macintyre analyse trends in commodity purchases by the Global Fund for malaria. Procurement data from 79 countries for three malaria-related commodities are analysed to observe time and regional pricing trends.

The authors conclude that global procurement costs vary by region and have declined over time overall, suggesting that at the global level, a mature market for malaria-related commodities is operating. Regional variation, however, requires further attention with routine analysis to identify and correct market insufficiencies.

Does global procurement and price negotiation through the Global Fund reduce HIV commodity costs?

The Global Fund spends between 40-60% of its annual budget on procurement of commodities for HIV, TB and malaria, necessitating complete, accurate and timely data about price changes over space and time. In a study published in the Journal of Acquired Immune Deficiency Syndrome (abstract can be found here) authors Frank Wafula, Ambrose Agweyu and Kate Macintyre analysed pricing data for three widely used commodities in HIV programmes: male condoms, anti-retroviral drugs (ARVs) and HIV rapid tests.

Comparing costs over seven years from 2005-2012, across regions and between national and a pooled procurement programme run by the Global Fund, the authors observed a generally flat line for pricing of HIV tests and condoms, with price drops noted for ARVs.

To ensure that global pricing for these life-saving commodities continues to decline to ensure greater access over time and across regions, the authors conclude with the need for regular and comprehensive analysis to identify and correct market insufficiencies.

Responding to health challenges: the role of domestic resource mobilisation

The gap in unmet needs for AIDS and TB is vast and cannot be filled by international donors alone. More domestic investment, either through taxes or levies or more efficient spending of existing resources, is needed to tackle the two diseases.

Governments and donors must collaborate to promote a greater investment at the national level in health programming. If a proposal is sound and attracts external financing, it should be equally sound for domestic investment. What must follow the 2015 conclusion of the work towards the Millennium Development Goals must be a new era of Domestic Resource Mobilization.

In a paper written by Alan Whiteside and Gavin Surgey, ten recommendations for countries to improve domestic financing to lead to better health are offered by the authors, including for governments to address rigid budgeting practices that make it hard to reallocate revenues toward health.

Faith reps welcome first pharma agreement with patent pool


Graph showing HIV copies and CD4 counts in a h...
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July 15, 2011

Summary & Comment: The first agreement between the Medicines Patent Pool and a pharmaceutical company – Gilead Sciences – to improve access to HIV and Hepatitis B treatment in developing countries is a commendable step towards alleviating suffering of people living with HIV and AIDs in Africa. M.Makoni

“An important first step” was announced on July 12 when Gilead Sciences became the first pharmaceutical company to sign a licensing agreement with the Medicines Patent Pool to increase access to HIV and Hepatitis B treatment in developing countries. The agreement allows for the production of four HIV medicines – tenofovir, emtricitabine, cobicistat and elvitegravir – as well as a combination of these medicines into a single pill called “Quad”. Additionally, the license allows for the development and production of other combination pills that include these medicines. Tenofovir is also used to treat Hepatitis B. “This is no doubt an important first step to making essential medicines available at a lower cost especially in countries that have had to wait years before they can afford ‘new’ medicines for HIV-related treatments”, stated Peter Prove, Executive Director of the Ecumenical Advocacy Alliance.

The Medicines Patent Pool, founded by UNITAID in 2010, aims to stimulate innovation and improve access to HIV medicines through the negotiation of voluntary licenses on medicine patents that enable robust generic competition and facilitate the development of new formulations. The Medicines Patent Pool was recently endorsed by the G8 and the UN High Level Meeting on AIDS as a promising, innovative approach to improve access to HIV medicines.

According to David Deakin of the UK faith-based organization Tearfund, “The patent pool offers a completely new paradigm to address the HIV needs of developing countries. As someone who has previously been involved in the pharmaceutical industry, the pool, although far from perfect, represents one of the biggest breakthroughs ever in beginning to develop a sustainable solution to treatment access in developing countries.” In recent months Tearfund has worked with the UK AIDS Consortium to put pressure on pharma companies to join the Medicines Patent Pool. A current initiative involves sending thousands of signatures from church members to Johnson & Johnson in the UK.

While this historic agreement between Gilead Sciences and the Medicines Patent Pool marks the first step in access to affordable medicines for people living with HIV, six other patent holders are currently in negotiations with the Medicines Patent Pool. Some concern has already been raised by Médecins Sans Frontières over the exclusion of some middle-income countries in the Gilead agreement, with the hope that future agreements are inclusive of all developing countries. “The Medicines Patent Pool will only work effectively if others follow Gilead and join the pool,” stated Deakin. “It is really important that companies such as Johnson and Johnson, Merck and Abbott now enter their own negotiations with the pool. One of the reasons given for not doing so previously was that they wanted to see the first pharma company reach a successful outcome. With Gilead this has now been achieved so there is no excuse for not entering into their own negotiations if they are serious about contributing to a sustainable solution to meet the needs of millions who need access to treatment.”

Source: AfricaFiles – Ecumenical Advocacy Alliance

AIDS Funds Frozen for China in Grant Dispute


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New York Times

May 20, 2011

By 

China’s management of grants and its hostility toward grass-roots organizations in public health issues has drawn a rebuke from a global fund. Read more

The Global Fund proposes joint action to prevent theft of medicines


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GENEVA – The Global Fund to Fight AIDS, Tuberculosis and Malaria will invite major international funders of drug supplies to developing countries, technical and law enforcement agencies and implementers of health programs to intensify joint efforts to prevent theft of medical drugs.

The Global Fund will invite the agencies to take concerted action to stem drug thefts, ranging from information-sharing and joint strengthening of procurement and distribution capacity in developing countries to applying stringent security measures around drug storage and transport. A preliminary meeting will be held in January to draw up a joint action plan.

Theft of drugs is an old and persistent problem in developed and developing countries alike, especially for drugs that may be cheap or free in the public sector but fetch high prices on the open market or in neighboring countries with different pricing policies. Problems are exacerbated by limited resources and imperfect distribution systems in many of the world’s poorest countries. Read more

Ghana- Storm over $130 million grant to Anglogold


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AfricaFiles no.25153, March 18, 2011

The Ghana Coalition of NGOs in Health (GCNH) has questioned the selection of AngloGold Ashanti by the Global Fund for HIV, Tuberculosis and malaria control, to carry out malaria programmes in Ghana. AngloGold received an amount of about $130 million last year to extend its malaria programme to 40 districts in the Ashanti, Western, Northern, Upper East and West, Regions. The coalition argues that it is often civil society organizations that are responsible for such activities in all countries, and is therefore baffled as to why in Ghana a multinational company was given that mandate. According to the group, the whole nation could have benefited from the amount if it had been given the money as it has members nationwide who could have prosecuted the programme unlike AngloGold which is doing the work only in districts of aforementioned Regions.

It alleged that AngloGold made a huge profit last year and could have organized the amount of money it has been given for such an assignment as corporate social responsibility. “Is it fair for a company that makes such profit to be given such grant meant for the whole country? The Global Fund gathers money from other multinational companies in the world therefore it is not fair that AngloGold should be the principal recipient,” Dr. Joan Awunyo-Akaba, National Chairperson of the coalition argued. She continued, “If it is true that AngloGold is trying to set up its NGO so it can share the money as a sub-recipient then I think it is unethical. Our information is that AngloGold has used only about $6 million of the money and has not covered even the slated districts. The money belongs to the people of Ghana so it is not too late for the company to get in touch with the coalition and work with us.Read more

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