Cheaper antiretroviral drugs (ARVs) and efficient performance in supply and delivery mean that more people living with HIV and AIDS can receive treatment. The Supply Chain Management System (SCMS), recognizing that high pricing of ARVs is a barrier to treatment, has developed a successful strategy that is helping reduce ARV prices worldwide. From January to March 2007, SCMS saved more than $30 million on its ARV purchases against the World Health Organisation's Accelerated Access Initiative1 unit pricing.
"SCMS has achieved savings by purchasing generic medicines whenever possible, pooling procurement (such as consolidating multiple orders to buy in larger volumes), and establishing long-term, indefinite quantity contracts with manufacturers, thereby leveraging lower prices through bulk purchases" explained Ambassador Mark Dybul, US Global AIDS Coordinator.
Buying generics has been the most important factor in lowering SCMS' purchase prices, representing 88 percent of ARVS purchased (by volume) in this period. SCMS purchases low-priced generic ARVs that have been approved or tentatively approved by the US Food and Drug Administration (FDA) and shares pricing information with others, therefore reducing costs. A "tentative approval" indicates that the drug meets quality standards and is safe to use, but for patent reasons cannot be marketed in the US.
SCMS is committed to helping reduce the cost of ARVs for all buyers worldwide. By setting a benchmark in pricing and sharing prices with others, SCMS is helping a growing number of US government-funded projects reduce costs. When additional generics are approved prices are further reduced due to competition among generic producers. With reduced prices we hope a greater number of children and adults can have access to life-saving medicines.
1) The Accelerated Access Initiative is a program of the World Health Organization (WHO) in partnership with six research-based pharmaceutical companies to provide developing countries access to branded ARV medicines at heavily discounted prices.
Crown Agents USA, Inc is a member of the Partnership for Supply Chain Management System consortium. See resources section.