Tackling High Drug Costs -Lessons from Australia and Brazil

In two related commentaries referenced below, the authors detail how Australia and Brazil managed to provide a blockbuster hepatitis C virus (HCV) medication without following the going-broke example of Blockbuster video stores.

  • Australia: S Moon et al. NEJM 2019; 380: 607-9
  • Brazil: EM da Fonseca et al. NEJM 2019; 605-6.

Australia provided a lump-sum payment of approximately 770 million dollars (in U.S.) over 5 years in exchange for an unlimited volume of direct-acting antivirals (DAAs). As a result of this approach, Australia managed to treat many more patients at a much lower cost.  “The government would have to spend …U.S. $4.92 billion more to treat the same number or it could treat 93,000 fewer patients with a fixed budget” of approximately U.S. $766 million.

With the Australian approach, the authors note that it is analogous to a patent buyout and works if the ongoing drug manufacturing cost is low and the manufacturer is able to meet growing volume demand.

Brazil’s approaches for DAAs relied on either threatening loss of patent protections and/or enabling local generic production of sofosbuvir.  This resulted in ~90% price discount. Patent protection in Brazil is granted only if a medication is approved by both INPI (Instituto Nacional da Propriedade Industrial) and ANVISA (Brazilian Health Regulatory Agency).

My take: Given the rising costs of medicines, examining how other countries surmount these financial barriers is important.  In my view, the often arbitrary and exorbitant pricing by pharmaceutical companies will erode the support of protective policies in the U.S. which thus far has helped produce many advances.

Skull Rock, Joshua Tree National Park


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