A big US pharma company has finally taken proactive measures (learning from history no doubt) to license innovative drugs to low-cost drug makers in India so that they reach the people who need them the most.

It’s a big day for global healthcare. Particularly for HIV-affected people but also for the world in general.

A big pharma company has finally taken proactive measures (learning from history no doubt) to license innovative drugs to low-cost drug makers in India so that they reach the people who need them the most.

The US drugmaker, Gilead Sciences today said it has inked licensing agreements with four Indian drug companies - Hetero Drugs Ltd., Matrix Laboratories Ltd., Ranbaxy Laboratories Ltd. and Strides Arcolab Ltd. – for three drugs which are currently in late-stage clinical development. (The drugs are not yet approved but let us give them the benefit of doubt.) Gilead said the goal is to ensure that low-cost versions of its drugs would be rapidly accessible in developing countries as soon as they are developed and approved.

But what is key here is the “complete technology transfer of the Gilead manufacturing process” to support Indian manufacturers efforts. This will help them obtain local regulatory approvals and scale up production as soon as possible following the U.S. Food and Drug Administration approval of pipeline products covered under the agreement.

At one level, it looks a logical business move. Gilead, in supplying drugs to 1.6 million HIV patients, is already working with several drug companies in the developing world. At another level, the agreement will have a significant impact on the capabilities of Indian manufacturers. After all, learning by emulation is also good learning!

Under the terms of the new agreements, licensees are allowed to establish their own prices and will pay a royalty on sales of the finished product, which supports product registration, medical education and training, safety monitoring and other critical activities.

Moreover with this agreement, Gilead becomes the first pharmaceutical company to enter a licensing agreement with the Medicines Patent Pool Foundation. The Pool was established in July 2010 with the support of UNITAID, is working to partner with a number of pharmaceutical companies to expand global access to quality, low-cost antiretroviral therapy through the licensing of patents. Companies interested in producing the generic versions of Gilead medicines for developing countries will be able to approach the Patent Pool to negotiate licensing terms.

Hopefully, these efforts will further dent the HIV crisis. Especially since efforts to fight the disease have become debilitated as global donors, almost all from the developed world, are unable to commit funds.

As recently as 2000, the cost to supply one person living with HIV/AIDS with a year’s supply of antiretroviral medicine averaged about $10,000. Since then, generic competition, bulk purchase agreements and innovation have dramatically reduced drug costs. For example, in 2008, low income countries paid, on average, $400 per patient per year for a WHO-recommended once-daily regimen. And prices have continued to drop even further, as that same regimen now is available for $159 per patient per year, a reduction of 60 percent since 2008 alone.

Clearly, HIV/AIDS provides a classic example of how outstanding results can be achieved if all interest groups converge. I wonder what it will take for the world to unite to fight some of the other diseases, this time non-communicable ones?