The Role of Generics Companies in Improving Global Health with Mylan
Earlier this year, we had the opportunity to sit down with several members of Mylan’s leadership team to explore what shared value means for generic pharmaceutical companies and to better understand the important role that generics companies play in addressing some of the world’s biggest health challenges.
In this conversation with Heather Bresch, Chief Executive Officer, Rajiv Malik, President, and Anil Soni, Head of Global Infectious Disease, FSG’s Neeraja Bhavaraju and Nina Harstad discuss the unique opportunities generic companies have to create shared value by expanding access to affordable medicines to hundreds of millions of people in new markets and developing innovative products that address unmet health needs.
We have shared our five key insights here and you can read the full conversation below.
“We have made a conscious decision to serve low, middle and high-income countries, which often differentiates us from our peers. I’m really proud of that. People define access in different ways, but to us making the world healthier truly means reaching 7 billion people.”
— Heather Bresch, CEO
Five key insights from Mylan on creating shared value
- Generic companies play a key role in expanding access to medicines: Even in the United States, generics are fundamental to access — they account for 90 percent of all medicines in the country. In developing countries, the role for generics is distinct in three ways: availability, affordability, and innovation. With that, we have been able to reach millions of patients that [other pharmaceutical companies] cannot.
- Generic companies play a unique role in product innovation: Our research scientists have developed new generic products that do not have a branded equivalent. For example, we developed a new dosage form of a protease inhibitor for infants. Traditionally, these products are not palatable or practical for infants, so our research scientists developed a granule that can be sprinkled like a sugar packet into milk or porridge. This has the potential to transform how to treat infants with HIV.
- Innovation goes beyond products to innovating around policy and delivery: There’s another side of innovation: how do you actually get the product into people’s hands? We were among the first people advocating for treatment as prevention. We saw the need first-hand, and it built our desire to get more medicine into patients’ hands with support for the clinical research that ultimately achieved that policy change.
- Partnerships with NGOs, donors and governments are critical: We partnered with Clinton Health Access Initiative (CHAI) — they really helped us bring the costs down. CHAI partnered with scientists, other industry partners, the pharmaceutical industry, WHO, and UNAIDS, to take into consideration all molecules that are available and create affordable and effective drug cocktails. They helped us break down barriers and scale-up. And the Global Fund and PEPFAR played a huge role in providing funding.
- Breadth of portfolio and market span allow for leveraging of capacity and investments: We have a different approach while making decisions about capital investments as compared to companies with limited portfolio and span. We serve many different markets and provide various dosage forms which means that the same CAPEX / capacity can be used for different products and markets.
What do you see as the role of generic pharmaceutical companies in expanding access to medicines?
Rajiv Malik: In HIV, for example, Gilead Sciences develops innovative antiretroviral therapies that have a tremendous impact. However, Gilead’s market reach is limited to a million patients in the United States and Europe. But for HIV, there is a large population that needs this medicine that lives beyond the United States and Europe. And that’s where we come in. We partner with Gilead, further refine the science to bring the cost of these products down significantly and make them affordable and use our global supply chain, with the result that millions of patients over the last ten years have access to the same products which Gilead could not do on their own.
Anil Soni: Even in the United States generics are fundamental to access — they account for 90 percent of all medicines in the country. In developing countries, the role for generics is distinct in three ways: availability, affordability, and innovation. With that, we have been able to reach millions of patients that other pharmaceutical companies cannot.
On price — at the beginning of the 2000s, when the Global Fund and PEPFAR were created, there was a fundamental question: Can we price products low enough to reach patients? We were newly able to use our purchasing power and the billions of dollars provided by donors, but at the time, the price for HIV treatment was more than $10,000 USD per person per year. Even with concessions, it was $1,000, which is still prohibitively expensive. That’s where generics companies like Mylan offer fundamentally lower prices and we got that down to $75 per person per year, which we can do because we are so competitive on cost of goods sold (COGS). We’re not just copying — we’re actually driving prices down by driving costs down.
The next role for generics that is distinct is capacity. Fifteen to twenty years ago the question was: How many people can we get on treatment?
Getting more people on treatment is better for people and for our business. But no one could have imagined that the number of people on treatment in developing countries would be more than ten times the number of people on treatment in the United States and Europe.
Achieving that volume is hard — decades ago the traditional players would have said it’s impossible. But now, our manufacturing and R&D facilities in India are of a unique scale to handle it.
The third distinct role for generics is innovation. First, we are able to combine molecules for low-income markets in a way that you cannot in the United States due to the patent landscape. Second, you need to develop different kinds of products in these markets. Our research scientists have developed new generic products that do not have a branded equivalent. For example, we developed a new dosage form of a protease inhibitor for infants. Traditionally, these products are not palatable or practical for infants, so our research scientists developed a granule that can be sprinkled like a sugar packet into milk or porridge. This has the potential to transform how to treat infants with HIV.
How do you identify and make progress toward access challenges that are not about product innovation, such as strengthening health systems or building workforce capacity?
Heather Bresch: It is remarkable work that the team has done to cut costs and make products really affordable. But we still know that even the affordable medicines aren’t always reaching people. We tend to think of innovation as scientific advancement. While that’s important, there’s also another side of innovation: how do you actually get the product into people’s hands?
Something that sticks with me from a trip we took to Africa ten years ago was that there was a minimum CD4 count for doctors to put people with HIV on treatment. We were among the first people advocating to treat everyone, and for treatment as prevention.
We saw the need first-hand, and it built our desire to get more medicine into people’s hands with support for the clinical research that ultimately achieved that policy change. While it may not be traditional innovation, that is breaking down an important barrier.
RM: We have developed meaningful partnerships. We partnered with Clinton Health Access Initiative (CHAI) — they really helped us bring the costs down. CHAI partnered with scientists, other industry partners, the pharmaceutical industry, WHO, and UNAIDS, to take into consideration all molecules that are available and create affordable and effective drug cocktails. They helped us break down barriers and scale-up. And the Global Fund and PEPFAR played a huge role in providing funding.
AS: Often, we engage our partners in shared problem-solving about access impediments. For example, the head of PEPFAR shared that a key challenge is the requirement for people to go to a clinic every month to get a month’s supply of ART. As the number of people being treated rapidly increases, clinics are facing resource constraints. She identified a need for multi-month packs that would allow patients to get a three or six month pack when they go in. So she’s asking us to stretch what our product can do to better meet the conditions and needs of our users.
How do you consider the business value of these types of investments?
HB: Our business is focused on doing “good” and doing well. This is a balancing act that we believe serves both our mission, as well as all of our stakeholders.
We have made a conscious decision to serve low, middle, and high-income countries, which often differentiates us from our peers. I’m really proud of that. People define access in different ways, but to us making the world healthier truly means reaching 7 billion people.
AS: Mylan has recently become a more proactive supporter of operations research. For example, there was a study called MaxART in Swaziland that aimed to put everyone on treatment and show that it’s cost-effective as prevention. We provided product for that trial and, in other cases, have helped co-design trials. At no point did I need to calculate the expected ROI for working on these trials. Internally, we knew we should do this because it will advance the science, it will advance access, and that’s our goal. And yes, there will be more supply and business, but that’s intuitive for us.
One of the key questions when thinking about business rationale is the opportunity cost. We have a certain set of resources for business development across a set of projects. Thanks to our senior leadership, we get a disproportionate share of those resources, even though our products and projects are not delivering the same type of return. They do have net present value that is positive, but it’s a different calculation about how a company thinks about tradeoffs and opportunity cost.
RM: We have a different approach while making decisions about capital investments as compared to companies with limited portfolio and span. We serve many different markets and provide various dosage forms which means that the same CAPEX / capacity can be used for different products and markets if we are unable to get the assumed market share in a tender. We make educated decisions based on a successful track record and past learnings.
What are the biggest challenges that Mylan faces or will face in growing access to its medicine?
RM: In the developing market, the big risk is if the Global Fund and PEPFAR limit funding. For sustainability, we can do what we can, but someone needs to provide funding. In the U.S. market, the biggest challenge right now is how biosimilars will commercialize and there are a lot of unanswered questions and uncertainty. Mylan has one of the industry’s leading biosimilars portfolios.
AS: Outside of disease areas such as HIV, TB, and malaria, there are many other diseases with no donors, and there are a lot of challenges there.
Hepatitis, for example, is a huge killer with little donor support, so countries have a hard time driving adoption even if it is cost-effective. We’re trying to show that it’s cheaper to treat it than bear the costs of illness over time.
However, even trying to work on these areas with ministries of health would be challenging in the absence of the type of infrastructure provided by a Global Fund, CHAI, and PEPFAR. There’s also a real issue of quality. One of the other reasons why the ARV story has been a success story is that the donors have insisted on a high quality standard for products. There’s a level playing field for HIV — you either need to get FDA approval or WHO pre-qualification, but that same standard doesn’t exist in other areas.
For a challenge in the U.S. context, we are working to launch lower cost HIV products. But not only is there a lack of incentives to use low-cost specialty products, but there are actually dis-incentives in the system. It’s not a normal market where a lower cost product will win. We’re expected to offer low-cost alternatives, but the system isn’t structured to enable uptake of them. Those are some of the challenges where a legislative fix would better enable access.
Read more interviews with shared value leaders in global health >
