Current affairs

Indian Pharmaceuticals Hit a jackpot with PEPFAR

In the year 2003, the then US president George Bush signed an authorization to launch an International program to combat HIV/AIDS world wide. The act was called ‘ United States Leadership Against Global HIV/AIDS, Tuberculosis, and Malaria Act of 2003’ and initially US$ 15 billion were authorized. This act is popularly known with its short form, PEPFAR. This program has been reauthorized and relaunched on 30 July 2008 as ‘ Tom Lantos and Henry J. Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008’. In its revised form, the act authorizes US Government to spend US$ 48 billion in next five years towards eradication of these dreaded diseases.

United States government has planned, in partnership with other host nations, to achieve following targets before year 2013.

* Treatment for at least 3 million people

* Prevention of 12 million new infections

* Care for 12 million people, including 5 million orphans and vulnerable children.

To meet these goals and build sustainable local capacity, PEPFAR will support training of at least 140,000 new health care workers in HIV/AIDS prevention, treatment and care in. The program is being implemented in Botswana, Cote d’Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania and Uganda.

So far the previous experience has been that when such International programs are launched, multinational drug companies make most of the dough. They manage to increase sale of their formulations to a huge extent through such International efforts. The cost of the drugs is paid by the Governments and these companies earn huge profits. However with PEPFAR, things have turned out to be different. In May 2007 President Bush increased the authorization amount for this program to US$ 30 Billion. He also announced that this program can use in future, Generic formulations along with Branded formulations manufactured by multinational drug giants. Generic drugs and formulations are made as per exact formula of the original drug but is sold without any brand name and since these are much much cheaper, it is possible to treat higher number of patients at the same cost. The only condition that was laid was that the prior approval of the FDA was necessary before these formulations could be procured.

In last 2 years, FDA has approved about 100 such generic formulations. Surprisingly , almost 95% of the approved formulations are submitted by Indian pharmaceuticals. Arbindo Pharma is leading with 34 approvals. CIPLA and US Subsidiary of MATRIX laboratories have got 15 approvals each. Companies such as Strides, Emcure and Hetero have won 5 to 15 approvals each.

antiaids drugs

Managing Director of Arbindo Pharma says that his company is selling these formulations at one third cost of the branded products. This allows the PEPFAR program to treat three times more number of patients. Another Pharma major CIPLA has accepted that they are earning 20 to 25 million US$ every year through this program.

With PEPFAR being able to treat more and more number of patients each year, the profits of Indian Pharmaceuticals are on the rise for sure. Even though this arrangement is beneficial to all concerned, it can be said without any doubt, that Indian Pharmaceuticals have hit a jackpot and are set to improve their balance sheets in years to come.

15 November 2009


About chandrashekhara

I am a retired electronics engineer. I am interested in writing, reading books. Other hobbies include Paper models, wooden fret work and social networking.


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