An Institutional Analysis of the Diagnosis and Monitoring Tests Market Future Challenges to the Sustainability of the HIV/AIDS Responses in Southern Countries An Institutional Analysis of the Diagnosis and Monitoring Tests Market Preliminary Results Cristina d’Almeida CEPN - Université Paris 13 Nord ANRS

Motivation Strong impact on the sustainability of the HIV/AIDS Policies in Southern Countries A highly specialized - “science-based” - market  lack of economic studies Major Concerns: Least Developed Countries: Access hindrances:high prices (namely VL) and viral diversity Developing Countries: high prices, learning costs, technological dependency upon northern countries

Methodology Institutional and Organizational Market Analysis by means of the Industrial Organization (IO) Theory First step: Analysis of the Monitoring Tests Market: CD4, Viral Load (VL) and Genotyping Study Case: Brazil Interview with the most relevant stakeholders Research on patents/ patent applications databases In the near future: Approach Brazil/Cameroon

Main factors that impact the demand for HIV/AIDS monitoring tests The introduction of new therapeutic regimens by means of evidence-based proofs Viral resistance and therapeutic failures Late introduction of HAART (monitoring of mortality and morbidity) New therapeutic guidelines: precocious start for HAART New monitoring technologies addressed to children: CD 45 counts The ageing of the HIV+ population

Antibody detection (1-2 months) The HIV/AIDS Dynamics Source: WHO (2005) Window Period 60 Antibody detection (1-2 months) Viraemia ~200 CD4 cells/ml blood >350 cells/ ml blood >500 cells/ ml blood ? ? ? ?

WHO Guidelines for the use of HIV/AIDS Monitoring Tests CD4 Viral Load Assymptomatic patients Every 3-4 months/year Every 3-4 months/year * Every 3-4 months/year * AIDS “Naive” patients: 2-8 weeks after start of HAART Every 3-4 months/year Therapeutic failures 2-8 weeks after start of HAART 2-8 weeks after start of HAART * Not recommended to LDC, due to the high costs US Department of Health and Human Services (2008)

Technological Complexity Product differentiation Market Structures CD4 Viral Load Technology Flux Cytometry (FCM) RT-PCR NASBA b-DNA Technological Complexity Less complex More complex Product differentiation Same technology but different wavelenghts readings Different technologies, different principles Nr of main competitors 3 4 Price variation Equip:USD20,000 – 35,000 Tests:USD 5-20 Equip:USD 70,000 – 80,000 Tests:USD 15 - 20

CD4 Tests Suppliers: International Activities Rank intern. market Priority markets Costs * (USD) Becton, Dickinson 1st Europe (32%) Equipments: 20,000 (SP) Reagents/Tests: 5-20 Beckman Coulter* 2nd Americas (38%) Equipments: 22,000 (SP) Reagents/Tests: 5-8 * New investments: China and India Partec GmbH 3rd Equipments: 22,000 Reagents/Tests: 8-10 *Source: OMS (2007)

Viral Load Tests Suppliers: International Activities Rank intern market** Priority Market Costs * (USD) Roche Diagnostics 1st Europe (35%) Equipments: Reagents/Tests: 125 Abbott Equipments: 33,500 Reagents/Tests: 20-70 2nd Siemens Diagnostics 3rd Europe + Middle East + Africa (35%) Equipments: 40,000 Reagents/Tests: 28-90 bioMérieux 4th Europe +Middle East +Africa (62%) Equipments: Reagents/Tests: 38-76 *Source: OMS (2005) **IVD general

The Intellectual Protection Know-how (specific to each technology) – trade secrets Reagents (biomarkers, devices) – patents Equipments (owned or outsourced) - patents Trademark

Preliminary Conclusions and Remarks A Complementary Market to the ARV Market (association/repetition) Cartel structures and high concentration (mergers and acquisitions) Horizontal Intellectual Property, comparted to the ARV market A market addressed to the needs of southern countries => inequities Distinct product differentiation between the CD4 and the VL markets => different strategies

Preliminary Conclusions and Remarks(cont.) Main hindrances to competition: High technological specialization The relevance of human resources capacitation Information assymetries Intellectual Property (royalties: ~20%) Absence of local institutional mechanisms towards national production in southern countries New technological trends: Real-time PCR (for VL)

Thank You! crisdalmeida@gmail.com