'Pure price-gouging': Advocates celebrate price drop of critical TB test but say Big Pharma needs to do more

Every 20 seconds, someone dies of tuberculosis. Health advocates and expertssay it's largely due to inaccessibility of treatment butthey hopethat a newly announced reduction in the cost of TB testing might change that.

On Tuesday, several TB-focused organizations announced a major victoryafter the multinational conglomerate Danaher Corp. cut the cost of a criticalTB testby 20 per cent. The test can identify infection with TB and resistance to one first-line TB drug.

Danaher has also committed to make no profit on the sale of this specific TB test to low- and middle-income countries going forward, and to a yearly third-party assessment to ensure that remains the case.

It's the first time the cost of the test has been reduced in more than 13 years, says Stijn Deborggraeve, diagnostics adviser for the Mdecins Sans Frontires(MSF) Access Campaign.

"Five million additional tests can be procured with this lower price," said the Global Fund to Fight AIDS, Tuberculosis and Malaria in a statement.

The advocates CBC spoke with wanted to give Danaher credit for lowering the price of the standard TB test. It's a victory they have been fighting for since 2019.

But they were also disappointed that Danaher and subsidiary Cepheiddid not lower the price more, or commit to making their other tests more affordable, including the one for extensively drug-resistant TB the most dangerous form of the disease.

Razor-blade business models in mission-critical applications.- Rainer Blair, CEO of Danaher Corporation

It's pure price gouging. It's pure profiteering.- Stijn Deborggraeve, diagnostics adviser for the Mdecins Sans Frontires Access Campaign

John Green, a best-selling author,philanthropist and TB advocate, said "it is a very significant step" but still sounded a cautious note.

"When good things happen, you want to celebrate," he said. "But at the same time, I'm conscious of the fact that 1.6 million people are going to die of TB this year."

TB is the deadliest disease in human history and has killed an estimated one billion people in the last 200 years. Caused by the bacterium M. tuberculosis, TB is curable in virtually all cases, and has been for 70 years, thanks to powerful tests, medications and treatment regimes.

But according to experts, pharmaceutical companies are overcharging for critical treatments, developed with hundreds of millions of dollars in public funding, locking out those who need them most.

The fact that 1.6 million still die of the disease every year is a testament to what happens when you put profit over patients, says Green.

"The real cause of tuberculosis in the 21st century is not a bacteria," said Green. "It's human-built systems. It's human choice."

WATCH |A CBC report on tuberculosis from the 1990s:

Ensuring tuberculosis treatment

29 years ago

Duration 6:32

Public health nurses visit TB patients to ensure they follow a drug regimen of eight pills daily for up to a year.

On Friday, world leaders are set to meet in New York for thesecondUnited Nations High Level Meeting on TB. Advocates and experts hope to see promises of progress, not just from governments, but corporations as well.

"We can choose a world where no one dies of TB, just as we are currently choosing a world where 1.6 million people do," Green said.

TB is an airborne infectious disease that typically infects the lungs, but can colonize almost any part of the body. A third of all people globally are estimated to have a latent TB infection and more than 10 million get sick every year.

It has remained the world's deadliest infectious disease since the Black Death;the only exceptions being in 2020 and 2021, when it took second place after COVID-19.

TB tends to strike the most vulnerable, including young children and the immunocompromised. People in poor living conditions or with little access to health care, such as in impoverished countries or Canada's Indigenous communities, are also at higher risk.

'Printer ink' model

One of the majorchallenges with TB is diagnosis. One of the only reliable methods is to use molecular tests, says Carole Mitnick, a professor of global health at Harvard Medical School and a leading expert in TB treatment.

Part of the problem, Mitnick said, is that Danaher holds a virtual monopoly through subsidiary Cepheid, which produces the GeneXpert molecular testing system.

Since GeneXpert went to market in 2006, it has been sold under a"printer ink" or "razor-blade" model. This is when a company charges relatively little for the base of a product (like a printer or razor handle) but more for the required disposable components (like ink cartridges or razor blades).

Rainer Blair, the CEO of Danaher Corp., publicly referred to the practice as "razor-blade business models in mission-critical applications."

The testing machine, which can also be used to diagnose HIV, hepatitis, COVID-19, Ebola and a host of other diseases, is relatively affordable, Deborggraeve said. MSF gets machines that can run four tests at a time for $17,000 to $20,000. (All figures in U.S. funds.)

Many low-income countries got them years ago, when sales were subsidized by public funding, says Mitnick.

But that locks them into the GeneXpert system and forces them to buy the company's single-use TB test cartridges, which have been sold at a high markup for over a decade.

For all tests but one, those markups will continue.

Danaher and Cepheid did not respond to CBC News's request for comment.

We can choose a world where no one dies of TB- Author and TB advocate John Green

Danaher is a multinational conglomerate and holding company that had profits of $7 billion in 2022.

GeneXpert was developed usingmore than $250 million in public funding, much of which came from Canadian and U.S. taxpayers, according to one study.

The company has long refused to disclose the cost of producing the test cartridges. But in 2018, MSFcommissioned an independent analysis that concluded each costs around $3 to $4.50 at the volume required then.

In its statement on Tuesday, Danaher claimed that, at $7.97, it would be selling the basic TB cartridges at cost.

For decades, the company has sold them to impoverished countries and organizations delivering treatment within themfor $10 to $15 apiece a markup of 122 to 400 per cent, based on the only publicly available evidence.At this price point, widespread molecular testing is out of reach for many countries with the highest burdens of TB.

The experts who CBC spoke with said that since MSF's study in 2018, the number of cartridges sold has increased dramatically, meaning the cost of production is now likely even lower.

With the new pricing, Danaher now charges almost double for other cartridges capable of detecting extensively drug-resistant TB (XDR-TB), despite the fact they cost the same to produce.

"It's pure price gouging. It's pure profiteering," said Deborggraevein an interview before the price reduction was announced.

In a second interview Tuesday, Deborggraevereiterated that there are still questions left unanswered."We invite the companies to be transparent in the costs so that countries don't have to buy blindly."

TB still a global threat

Though 95 per cent of deaths from TB occur in impoverished countries, Canada hasa grim history with the disease anda grim present.

In 2021, the last year for which complete data has been published, 1,904 active TB cases were reported. Nearly 200 were drug-resistant. The vast majority were among Indigenous peoples or those born outside Canada.

Compared to the Canadian-born, non-Indigenous population, the rate of TB among First Nations was more than 80 times higher in 2021. Among Inuit, rates were nearly 700 times higher.

In Canada, along with other high-income countries, a single GeneXpert cartridge costs around $100 US, Deborggraeve said a markup of approximately 3,000 per cent.

Most Canadian hospitals don't typically use GeneXpert machines for TB diagnosis, since they have the resources for other techniques, such as skin tests, chest X-rays and mycobacterial cultures, but for remote communities,GeneXpert machines may be the only option. In Nunavut,the Qikiqtaaluk region uses the GeneXpert system to test for TB out of Iqaluit.

'Time for $5' campaign

Last week, Green joined organizations includingMSF and Boston-based Partners in Health incalling for the price of the testing cartridges to be lowered to $5. The "Time for $5" movement was started in 2019 to balance Danaher's profit with testing accessibility in high-burden countries.

Advocates say at that price, Danaher would continue making a healthy profit and that the number of tests that could be purchased and administered would jump dramatically.

Experts say it could save hundreds of thousands of lives over the next decade, since being able to buy enough cartridges is among the barriers faced by countries struggling with TB.

The campaign is backed by TB experts, organizations that deliver on-the-ground treatment and Nerdfighteria, the community that has formed around Green and his brother, science communicator Hank Green.

The Greens and Nerdfighteriahave raised tens of millions of dollars for Partners in Health, which provides critical health-care services, including TB treatment, in low-income countries.

John Green also previously spearheadedapressure campaign against pharmaceutical giant Johnson & Johnson, which was fighting to extend its patents for the TB drug bedaquiline.

Sometimes referred to as a "miracle drug," bedaquiline is a first-line treatment for multi-drug-resistant tuberculosis (MDR-TB).

A 2019MSF-commissionedstudyfound that J&J could sell bedaquilinefor just 25 centsUSDperdose and still make a profit. A separate study found that J&J suppliedless than half the funding to research and create bedaquiline. Public investment, much of it from taxpayers, made up anywhere from 61-85% of the total funding.

Though that campaign was successful in lowering the price of bedaquiline for many low-income countries, advocates say there's still work to be done.

"Because Johnson and Johnson hasn't completely released their secondary patents...there's still a number of countries, including South Africa, where governments and individuals are still overpaying really significantly for bedaquiline," Green said. "That fight also isn't over, but I do think that we've made really important progress."

The experts and advocates whoCBC spoke with felt that Green'sboosting of the TB campaign likely had something to do with Tuesday's announcement. Lucica Ditiu, executive director of the Stop TB Partnership, said Stop TB and the Global Fund had been in talks with Danaher for months with little progress until Green got involved.

But there may have been other factors at play as well, said Mitnick.

Molbio Diagnostics, a molecular diagnostics company based in India, is one of Cepheid's few competitors. Earlier this year, Molbio said it was dropping the price of its drug-resistant TB test to $7.95roughly the same price, now, asGeneXpert.

Chandrasekhar Nair, Molbio's director and CTO, said at that price they still make a profit, even with the much lower production volumes compared to Cepheid. He also said it costs them roughly the same amount to manufacture their dozens of types of tests and they all sell for around the same price.

When increased demand and production volume meant the cost of producing TB tests came down, they lowered the price, said Nair.

Mitnick saysthere are several reasons the Molbiotesting machine, known as Truelab, may be preferred over Cepheid's GeneXpert machines. It'smore resilient and portable, can be brought closer to where people liveanddoesn't require a constant supply of electricity or air conditioning.