Why Are There So Few Generic HIV Drugs?

U.S. pharmaceuticals are uniquely shielded from competition

Few can argue with the fact that HIV drugs are expensive. In fact, according to the Centers for Disease Control and Prevention, a person living with HIV who starts treatment early will be faced with lifetime costs of roughly $250,000, and that’s just for the pills alone.

The costs can hardly be surprising given that a standard three-in-one option, like Triumeq (abacavir + dolutegravir + lamivudine), has an average wholesale price of over $3,400 per month. Other combinations well exceed this.

Pills on a conveyor belt
Monty Rakusen / Getty images

Despite this, you don’t often hear much in the way of a public outcry against the price of antiretroviral drugs. This is likely due to the fact that many get their HIV drugs paid for, at least in part, by insurance or various governmental, institutional, or manufacturer subsidies.

But some rightly wonder how antiretroviral drugs can carry such a hefty price tag in the United States when generic versions sold overseas cost as much as 2000% less than what American consumers pay.

By way of comparison, a generic form of Triumeq was introduced in South Africa in 2017 at a wholesale price of roughly $75 per year. That is less than the wholesale price paid per day in the United States.

The reasons for the dearth of generic antiretrovirals in the U.S. are at once simple and confusing, involving a mix of science, politics, and profitability. It is only by segregating these intertwined issues that one can make better sense of the challenges facing both Americans living with HIV and the American healthcare system at large.

Changing Demand

Typically speaking, when a drug patent expires—usually 20 years after it was first filed—the right to copy the drug will be open to anyone who chooses to create a generic version. One of the primary goals of the generic manufacturer is to gain market share based on price, with more manufacturers spurring greater competition and lower costs.

While the rollout of generic drugs in other disease fields is typically robust, it tends to be less so with antiretroviral drugs. This is due in part to advances in sciences that have made former "superstar" drugs like Sustiva (efavirenz) and Viramune (nevirapine) second- and third-line treatment options rather than first.

The loss of their preferred status is driven by the fact that newer HIV drugs tend to have fewer side effects, are less likely to develop early drug resistance, and are more "forgiving" (meaning that you can miss the odd dose without serious consequence).

While drugs like Sustiva and Viramune are still considered vital components of combination antiretroviral therapy, the impetus to create generic versions of them is often diminished by the time the patent has expired. So while there may be 20-plus generic versions of a cholesterol drug like Lipitor (atorvastatin), there may be only four or five generic forms of HIV drugs like Sustiva or Norvir (ritonavir),

Most often, these HIV generics are produced by three major manufacturers—Aurobinda, Cipla, and Mylan—who are able to amass a huge basket of generic products and generate profitability even as market demand wanes. Smaller generic manufacturers are less able to do this and tend to focus on a smaller range of products with higher demand and higher profit.

And therein lies one of the challenges facing generic HIV drug manufacturers: Fast-changing science can make certain drugs obsolete.

In recent years, once-important HIV drugs like Crixivan (indinavir), Invirase (saquinavir), Rescriptor (delavirdine), Videx (didanosine), Viracept (nelfinavir), and Zerit (stavudine) have all been retired.

Shifting Priorities

This doesn't necessarily mean that an expired HIV drug patent is necessarily on its way out the door. Take, for example, Viread (tenofovir disoproxil fumarate, or TDF), a drug whose patent expired in 2016.

Around the same time, its manufacturer (Gilead Sciences) gained the approval of an "improved" form of Viread known as tenofovir alafenamide (TAF). This new version not only requires a smaller dose but significantly reduces the risk of kidney side effects associated with TDF.

While the introduction of TAF should have set the scene for TDF's retirement, a change in science actually benefited the older drug.

Rather than focusing solely on treatment, TDF was approved for a new form of HIV prevention known as pre-exposure prophylaxis (PrEP). The strategy—involving a daily dose of the two-in-one drug Truvada (TDF + lamivudine)—can reduce a person's risk of getting HIV by as much as 90%.

Truvada, including the repurposed TDF, is one of only two drugs approved for PrEP by the Food and Drug Administration—the other being the "upgraded" version of Truvada called Descovy (TAF + emtricitabine).

Meanwhile, TAF is only available in combination drugs like Descovy rather than as a single pill. (There is a single-pill option called Vemlidy, but it was only submitted and approved for the treatment of hepatitis B, not HIV.)

Gilead's staging of approvals has allowed Viread to maintain market share by reducing head-to-head competition between their own products while generic manufacturers have leapt aggressively into the space, creating no less than eight different generic versions of Viread in the United States.

Unique Protections

HIV drug manufacturers in the United States are in the unique position of having minimal competitive pressure from anyone but the largest multinational generic producers.

Firstly, the consumer demand for newer, one-pill options has mostly relegated individual tablets to later-stage therapy. Not surprisingly, the patents for many combination tablets are nowhere near the end of their lifespan.

Even if the individual drugs are made available by generic manufacturers, the consumer will more often opt for the single-pill, brand-name options.

This has created a challenge for generic drugmakers, given that an increasing number of combination drugs involving newer integrase inhibitors are being released into the market. Many of these drugs only gained FDA approval in 2014 or later, meaning that they will have market exclusivity well into 2030 and beyond.

Pricing and the Federal Government

Even beyond the issue of consumer demand, the competitive playing field in the United States has long been slanted in the direction of the non-generic HIV drug manufacturer. This is due in large part to the fact that the U.S. government is the single largest purchaser of antiretroviral drugs today.

Through the federally mandated AIDS Drug Assistance Program (ADAP), state governments are directed to purchase HIV drugs directly from wholesalers.

ADAP drug prices are set through the Federal 340B Drug Pricing Program, which discounts the average wholesale price by anywhere from 60% to 70%. After factoring in rebates, the brand-name drugs almost always end up being cheaper than their generic counterparts.

Another factor shielding pharmaceuticals is the way in which treatment is dispensed. Unlike private health insurance, ADAP treatment choices are directed solely by guidelines issued by the Department of Health and Human Services, which currently place all-in-one combination tablets—the very drugs protected by patents—as the preferred option in first-line therapy.

It is not collusion driving these directives. Studies have long shown that people on a one-pill therapy are more likely to remain adherent to treatment compared to those taking several pills.

To further protect their market position, almost all brand-name manufacturers have agreed to offer financial support to people who cannot afford their drugs, either in the form of co-pay assistance or the subsidization of care for those who don’t qualify for insurance. It is an offering generic manufacturers are hard-pressed to match.

As valuable as these incentives are, they still don’t address the generally high cost of HIV drugs when compared to the same drugs sold outside of the United States.

Overseas Competition

The big pharma supply chain is a global enterprise that extends well beyond U.S. borders. Major pharmaceutical companies are frequently situated in the heart of emerging markets where diseases like HIV are prevalent. Doing so not only helps reduce the cost of manufacturing but also allows them to retain some control over the intellectual rights of their products.

This is especially true in countries like India, whose laws allow for the production of essential HIV drugs irrespective of the patent. As a result, India is today a major supplier of generic antiretrovirals to developing countries—drugs that are not only chemically identical to the original but have also been independently granted approval by the FDA.

As such, one can purchase a generic version of Atripla (efavirenz + emtricitabine + TDF) for roughly $50 at a retail counter in South Africa, while being faced with a wholesale price of over $3,400 here in the United States.

The major pharmaceutical companies have long insisted that the pricing disparity is a result of the cost of research and development (R&D), which may not only take years but can end up costing billions of dollars. On the surface, it’s a fair claim, given that the bulk of the preliminary R&D takes place in the United States.

By foregoing patent laws, Big Pharma argues, countries like India can easily make a profit on low-cost generics, since they are not burdened with R&D investments. Pharmaceutical giants, by contrast, don’t have such luxury, and, by default, neither do their customers.

The irony, of course, is that 80% of the active pharmaceutical ingredients (APIs) in U.S.-made drugs and 40% of all finished drugs come from countries like India and China, according to the FDA.

Despite claims that India is making huge profits by sidestepping patent laws, the annual turnover for the Indian pharmaceutical industry represents a mere 2% of the total global industry revenues.

Big Pharma's Generic Strategy

Despite claims of patent infringement, many American pharmaceuticals are well staked in the Indian generic industry. This includes Pennsylvania-based Mylan, which merged with pharmaceutical giant Pfizer in 2020 to form a new non-patent drug division called Viatris.

It was irony not missed by advocates, who argued that such practices are discriminatory, enabling American firms like Mylan to sell cheap, generic antiretrovirals for the developing world that they cannot sell here.

Similarly, the pharmaceutical giant GlaxoSmithKline (GSK) spent seven years as a major shareholder in Aspen Pharmacare, providing the South African-based generic manufacturer sole rights to some of their patented drugs. By doing so, GSK made profits on generic drugs sold in Africa but refused to surrender the same patent rights here in the United States.

Drug Importation Laws

The cross-border sale of pharmaceutical drugs remains a highly contentious issue, despite the fact that an estimated 8% of Americans turn to overseas pharmacies to lower their drug costs. Canada is a prime focus of the debate, garnering criticism from those who claim that the country’s popular online pharmacies are profiteering from the illegal importation of drugs into the United States.

In terms of actual revenue, sales from online Canadian pharmacies are relatively small. In 2016, sales were a little more than $115 million, a fraction of the roughly $445 billion generated by U.S. pharmaceutical manufacturers that same year.

Yet, even as advocates and some lawmakers endorse opening direct-to-consumer cross-border sales, the laws governing the personal importation of drugs curtail most Americans from even considering it.

According to FDA regulations, it is illegal for individuals to import any drug into the United States for personal use unless they comply with the following special circumstances:

  1. The drug is for use for a serious condition for which treatment is not available in the United States.
  2. The drug has not been commercially promoted to U.S. consumers.
  3. The drug does not represent an unreasonable health risk to the user.
  4. The person importing the drug verifies in writing that it is for their own use and provides contact information of the prescribing doctor or proves that the product is for the continuation of treatment started in another country.
  5. The individual does not import more than a three-month supply.

The conundrum is that the rules were based on the admission by the FDA that they "cannot ensure the safety and effectiveness of drugs that it has not approved."

The fact that the bulk of generic HIV drugs used in developing countries are FDA-approved has not swayed FDA or congressional lawmakers to significantly alter current laws.

List of HIV Generics in the US (2021)

While the United Kingdom and other developed countries have upwards of 15 to 20 licensed generics (and developing countries have as many as 30), the United States currently has 10:

  • Combivir (lamivudine + zidovudine)
  • Epivir (lamivudine)
  • Epzicom (abacavir + lamivudine)
  • Norvir (ritonavir)
  • Retrovir (zidovudine)
  • Reyataz (atazanavir)
  • Sustiva (efavirenz)
  • Viramune (nevirapine)
  • Viread (tenofovir disoproxil fumarate)
  • Ziagen (abacavir)

A Word From Verywell

The high prices of HIV drugs should not dissuade you from seeking treatment. Speak with your local HIV organizations about assistance programs you may be qualified for. The Human Resources & Service Administration maintains a directory of state HIV/AIDS hotlines to help you with referrals.

Many of these organizations have care navigators trained in assessing financial eligibility and linking people with HIV to assistance programs, including ADAP, Medicaid, and manufacturer patient assistance programs (PAPs).

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