Health experts say the arrival of cheaper Chinese-made AIDS drugs is unlikely to have a significant short-term impact on the sales of Western pharmaceuticals companies in China.

　　THE launch of a cut-price generic version of the AIDS drug AZT by a Chinese pharmaceutical company last week marks the start of China's attempts to lower the price of HIV treatment and make it affordable for more of the country's estimated 850,000 registered HIV carriers, health experts and government officials said.

　　Another two generic AIDS drugs, including D4t, will be given approval for sale in China by the end of the year, Zhang Zhijun, deputy director of the State Drug Administration's registration office told State television September 1.

　　Small market

　　However, health experts here said the arrival of cheaper Chinese-made AIDS drugs is unlikely to have a significant short-term impact on the sales of Western pharmaceuticals companies already importing their own versions of the drugs mainly because the healthcare system does not have enough trained physicians and hospitals capable of delivering HIV/AIDS treatment.

　　International healthcare experts in Beijing estimate that of the 850,000 people known to be infected with HIV, only 400-500 are being treated using the cocktail therapy treatment and there are fewer than a dozen hospitals in the country that can deliver treatment.

　　GlaxoSmithKline Plc, Merck & Co Inc, and Bristol-Myers Squibb Co., are believed to be the only Western pharmaceutical manufacturers with approval to sell AIDS drugs in the country.

　　The companies do not disclose their sales but with only 400-500 patients being treated, the market is very small.

　　GSK and Bristol-Myers also provide their drugs free to many patients as part of trials, and continue to provide a life-long supply for patients once the trials are over.

　　Falling cost

　　The cost of treatment has already fallen significantly. Following talks with the government, the three companies agreed at the end of last year to lower the prices of their drugs by 60-80 percent, which has brought the average cost of treatment using a cocktail of Western drugs down to 20,000-30,000 yuan a year (US$2,400-US$3,700) from 80,000-100,000 yuan last year, according to Shen Jie, director of the National Center for AIDS Prevention and Control.

　　The government thinks this is still too expensive, even though it has so far refused to exempt the imported drugs from 17 percent value-added tax (VAT), a 9.0 percent import duty and the various charges imposed by distributors.

　　Various government ministers and health officials have said an annual cost of around 3,600 yuan a year is more suitable.

　　More treatments

　　Despite of the reductions, there has only been a small increase in the number of patients being treated.

　　Bristol-Myers' spokeswoman in Shanghai Che Fei said that more people are being treated, although it is a slow process.

　　"More people are seeking treatment for HIV but it takes time for the fall in price to feed through and you can't expect for a disease like AIDS that as soon as you drop the price, patients flood in.

　　"The price of Bristol-Myers' two drugs (Videx and Zerit) combined is now US$5 a day or 40 yuan. Of course poor farmers who have been infected through blood banks can't afford that, and the government should give these people free treatment, but city dwellers can handle the price."

　　Che said price is not the only issue in AIDS treatment in China -- the lack of healthcare infrastructure is also a major factor.

　　"It's very convenient to accuse drugs companies of charging too much. Although there are 850,000 HIV virus carriers in China, there are less than 100 physicians qualified and trained to use cocktail therapy. So even if the price dropped to zero, there wouldn't be enough medical staff qualified to treat all the extra patients."

　　Still expensive

　　Even though the prices of the domestically-made drugs are expected to be 80-90 percent lower than the brand-name equivalents sold by the multinationals, they will still be beyond the reach of the majority of sufferers.

　　"There are two groups of patients in China," said Li Jinliang, general manager of Shanghai Desano Co., which is seeking government approval to produce ddI and D4t, the generic versions of the drugs Videx and Zerit developed by Bristol Myers Squibb, and Nevirapine, developed by Boehringer Ingelheim GmbH.

　　"One group is very rich and can afford the drugs whatever the price. The other group is very poor and even the price of the Chinese-made drugs will be too high for them. So the growth in the market will depend to a large extent on government support."

　　Ray Yip, senior advisor for health and nutrition at the United Nations Children's Fund in Beijing agreed saying: "Cheaper drugs doesn't mean more people will get treated. It might look very impressive on paper to see how much the price is coming down, but it will still be beyond the reach of most affected individuals and there isn't enough capacity to treat many more people."

　　"It's not just a matter of selling the drug and diagnosing the virus. It requires staff with proper training and knowledge. Even if you made the drug free, there would still be obstacles -- you can't develop a care provider system reasonably capable of providing the kind of diagnostic and treatment skills needed overnight."

　　Cao Yunzhen, professor at the Chinese Academy of Medical Sciences and a professor in Aids Research at the Aaron Diamond Center in the United States, said there are fewer than a dozen hospitals in China that can deliver adequate HIV/AIDS treatment.

　　"I don't think generic AZT coming onto the market is going to make much difference and I don't think many more patients will be treated," Cao said.

　　"Even if you use cheap AZT, the other drugs you need to combine it with are still expensive. However, what will make a difference is when Chinese companies like Desano get approval to make other drugs such as ddI and Nevirapine. That will change the situation because we can then make a cheaper cocktail but I think we'll have to wait one or two years for that."

　　Experts also warned that unless distribution and administration of the generic drugs is strictly controlled by the government, they could do more harm than good.

　　Financially-strapped hospitals may be tempted to sell the generic drugs to patients in the hope to make money, but they may not provide the patients with proper administration and monitoring.

　　"The trouble with Chinese companies is that they don't have strong R&D (research and development) capabilities, so they don't know how to train medical staff to use the drugs. AZT cannot be used on its own, it must be used in combination with other drugs or the virus can become resistant," said Cao, who is returning to China from the United States in October to start a clinical training project in Yunnan Province.

　　"There is a danger that if drug distribution is not controlled, there will be trouble. The government must intervene and take responsibility and control these drugs."

　　The potential market in China for AIDS drugs is significant.

　　Although there are no accurate figures, the government has estimated that at the end of last year there were around 850,000 people registered as infected with HIV.

　　The United Nations and other multilateral agencies estimate the true figure to be higher, while the numbers are expected to soar over the next few years.

　　In a report published in June, the United Nations warned that under current trends, and in the absence of effective counter-measures, China could have 10 million people infected with HIV by 2010.

　　The Chinese Government has started to acknowledge the scale of the problem. Last year it published a plan of action to contain, prevent and control HIV/AIDS.

　　The Chinese Government is also applying to the new Global Fund to fight AIDS, tuberculosis and malaria, for money to fund treatment for poor farmers in central Henan Province, thousands of whom contracted the HIV virus by selling blood to unregulated blood banks but who are too poor to pay for life-sustaining drugs.

　　For the Western pharmaceutical companies, who are under growing pressure to make their AIDS drugs available at cost to developing countries, the price of providing cheap AIDS drugs in China could well be worth paying over the long term.

　　"Western drugs companies want to make money here but they can't make a lot from AIDS (treatments)," said one health expert.

　　"These cheaper generic drugs will not result in the displacement of their profit centers -- they don't make money from the poorest people.

　　"But they have other big drugs they want to market here because China has such a huge population and offering cheap AIDS drugs will help them access this market." (SD-Agencies)