Presence of "buyers clubs" increases risk of fake meds

Pharma giant Gilead has warned about the dangers of the rise in "buyers clubs" that are sprouting up to offer cheaper versions of its blockbuster hepatitis C drugs.

In a regulatory filing, the pharmaceutical firm noted the growing existence of online "buyers clubs" in developed countries, which purport to provide access to generic versions of Sovaldi (sofosbuvir) and Harvoni (ledipasvir/sofosbuvir), the publication Money Control reported.

Sovaldi was approved in the US in December 2013 and in the EU in January 2014, with Harvoni's approval following in October 2014. The branded products feature price tags of almost $100,000.

The drugs have reached superstar status as they have a cure rate of over 95 per cent within just three months and have fewer side effects than traditional therapies. It's for these reasons the drugs have larger price tags, the drugmaker says.

Gilead claimed the buyers clubs were personally importing the medicines but the drugs had not been approved for use in countries they were imported to, and there was no guarantee they were the real deal and could, in fact, be counterfeit or substandard, the company said. Some buyers clubs also do not require a doctor's prescription to access the drug.

"To the extent patients take unapproved generic versions of one or more of our medications and are injured or not cured by these products, our brand or the commercial or scientific reputation of our HCV products could be harmed," the firm said in the filings.

Buyers clubs have popped up following widespread criticism of the exorbitant cost of some drugs. Gilead, in particular, has come under attack for charging sky-high prices for its hepatitis C treatments, and numerous claims have been made that the prices are affecting access in many countries.

In response, the buyers clubs promise access to foreign but cheaper versions of the drugs. The small-scale import for personal use exploits a loophole in World Trade Organization patent rules.

In an interview with CNBC TV18, a Gilead spokesperson said: "With regard to buyers clubs, the source and quality of hepatitis C medicines secured through medical tourism and buyers clubs are unknown. Patients cannot be sure that they are receiving effective or safe medicine."

One buyers club interviewed by Money Control said supply chain integrity was important but that the club had had no issues with counterfeits or substandard drugs. "As an additional safety check, we provide a tablet testing service using qNMR (quantitative nuclear magnetic resonance analysis). This is available to any patient who has sourced generic medications from any source. To date, none of the samples tested has been found deficient," James Freeman, founder of Australian buyers club FixHepC, told the publication.

"Looking at India specifically what the licence says is that the product is licensed to be sold within the territory – it is a point of sale licence, rather than an end-user licence of the type found in say arms sales," he said. "Gilead uses one set of laws to price these medications at unaffordable prices. We use another set of laws to help provide affordable access… FixHepC uses the law to correct that problem, at least for those fortunate enough to be able to afford generic prices. It is an imperfect solution for an imperfect world."

In many cases, Indian suppliers of cheap generics are involved in the trade.

In 2014, following a backlash over price and access in developing countries, Gilead signed non-exclusive licensing agreements with seven India-based generic pharmaceutical manufacturers – Cadila, Cipla, Hetero Labs, Mylan, Ranbaxy, Sequent Scientific and Strides Arcolab – to allow access to generic versions of its hepatitis C medicines in 91 developing countries, which represents more than 50 per cent of the global hepatitis C burden.

Under the licensing agreements, the Indian companies are allowed to manufacture and market the drugs under their own brand name. They received a complete technology transfer of the Gilead manufacturing process to enable them to scale up production as quickly as possible and they were also granted the right to set their own prices for the generic products, with a royalty on sales then paid to Gilead.

A controversial anti-diversion programme was reportedly included so as to prevent people in developed and middle-income countries from accessing the cheaper versions of the drugs.

Meanwhile, concerns about counterfeit copies of the drugs have already materialised after 14 bottles of fake Harvoni pills were discovered at a pharmacy chain and pharma wholesalers in Japan earlier this year. And last year knock-offs were found circulating in Israel.