Industry

Johnson & Johnson under investigation for Pricing of TB Drug

September 15, 2023

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Last Updated on October 9, 2024 by The Health Master

Johnson & Johnson

The spotlight has turned towards pharmaceutical giant Johnson & Johnson (J&J) as South Africa’s antitrust regulator launches an investigation into the alleged excessive pricing of a crucial tuberculosis drug.

This probe extends to J&J’s Belgium-based subsidiary, Janssen Pharmaceuticals, adding another layer to the unfolding saga.

Excessive Pricing Allegations:

The Competition Commission of South Africa, tasked with overseeing business practices, initiated the investigation following concerning information regarding potential exclusionary practices and exorbitant pricing of the tuberculosis drug bedaquiline, marketed as Sirturo.

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Price Disparities:

Health advocacy groups in South Africa have voiced their concerns, revealing that the nation is paying more than double the amount for bedaquiline compared to other middle- and low-income countries.

This alarming price gap has raised eyebrows and spurred demands for transparency.

Bedaquiline’s Vital Role:

Since its approval in 2012, bedaquiline has been a lifeline for treating drug-resistant tuberculosis.

Its significance is particularly pronounced in South Africa, where tuberculosis remains the leading cause of mortality, claiming over 50,000 lives in 2021 alone.

With over seven million individuals living with HIV, South Africa faces a unique healthcare challenge.

Tuberculosis accounts for nearly one-third of deaths among those with HIV/AIDS, as highlighted by the World Health Organization.

Global TB Surge:

Compounding the urgency, global tuberculosis cases witnessed an unsettling rise in 2021, reversing years of progress, according to the World Health Organization.

This surge further underscores the critical importance of accessibility to bedaquiline for affected populations worldwide.

Johnson & Johnson ‘s Response and Controversial Pricing:

Johnson & Johnson has encountered mounting pressure to reevaluate bedaquiline’s pricing. In a recent statement, the company pledged to offer a six-month course of the drug to one patient through the Stop TB Partnership’s Global Drug Facility at a cost of $130.

However, the South African government procures bedaquiline directly from J&J and Janssen, sidestepping the Stop TB facility.

Prior to this commitment, South Africa was paying approximately $280 for a six-month course per patient.

The South African Perspective:

Professor Norbert Ndjeka, who leads the national department of health’s TB control and management, disclosed that South Africa recently inked a new two-year agreement with J&J for bedaquiline, albeit at a slightly higher cost than the previous $280 per course.

This development sheds light on the complex negotiations surrounding drug pricing in the country.

Media Interest and the Larger Context:

The Competition Commission’s decision to confirm the investigation comes amid heightened media attention.

Nevertheless, the commission has refrained from divulging further details.

This inquiry follows closely on the heels of the Health Justice Initiative’s revelations regarding South Africa’s COVID-19 vaccine procurement contracts with major pharmaceutical players, including Johnson & Johnson and Pfizer.

Vaccine Pricing Discrepancies:

The Health Justice Initiative’s findings painted a stark picture of pricing disparities.

J&J reportedly charged South Africa 15% more per vaccine dose compared to the wealthier European Union, while Pfizer levied over 30% more for doses than it did for the African Union.

This revelation comes against the backdrop of South Africa’s struggles to secure vaccine doses, despite grappling with higher COVID-19 infection rates compared to other African nations.

Financial Implications:

In these contracts, Pfizer mandated an advance payment of $40 million for doses, with only $20 million refundable if the vaccines failed to materialize, as revealed by the Health Justice Initiative.

Johnson & Johnson, on the other hand, required a non-refundable down payment of $27.5 million.

These staggering figures offer a glimpse into the financial dynamics between pharmaceutical companies and governments.

Closing Thoughts:

With J&J‘s revenues standing at $94.9 billion in the preceding year and Pfizer reporting record earnings of $100.3 billion in 2022, the investigation into bedaquiline’s pricing raises critical questions about accessibility, affordability, and equity in healthcare, not only in South Africa but on a global scale.

The outcome of this inquiry may set a precedent for future pharmaceutical pricing practices, potentially reshaping the landscape of healthcare accessibility for years to come.

Disclaimer: This article contains information derived from the source mentioned below. Our team utilized an AI language model to rewrite and present the news or article in a unique format.