Time to lower the price of Xpert cartridges to US$5

Advocates request Cepheid immediately reduce the price of Xpert tests to US$5, inclusive of service and maintenance; the company responds they are “not able to predict the amount of further reductions or when they may be available”; advocates reiterate the request that Cepheid provide a detailed plan for how it will lower the price of Xpert tests to US$5.

On 21 October 2019, TB advocates sent an open letter to Cepheid requesting that the company immediately reduce the price of Xpert MTB/RIF and Xpert MTB/RIF Ultra cartridges to US$5, inclusive of service and maintenance. Since 2012, the volumes of sales of Xpert tests increased dramatically from 1.3 million to nearly 12 million cartridges sold in 2018 to the public sector alone, which is expected to have resulted in significant manufacturing efficiencies and cost savings.

“According to an independent cost-of-goods analysis commissioned by Médecins Sans Frontières (MSF), at annual volumes of 10 million, Cepheid’s manufacturing cost per [Xpert] cartridge is estimated to be as low as US$3. Therefore, the US$5 price point would enable Cepheid to include a comprehensive service and maintenance plan as well as a reasonable margin of profit within the price per cartridge, while also meeting the WHO [World Health Organization] target product profile price of under US$6 for rapid molecular TB diagnostic tests.”

The signatories requested a response by 28 October 2019, “which should articulate a plan for how Cepheid intends to lower the price of all Xpert cartridges to reflect the cost-of-goods efficiencies generated from the increased volumes of sales, as well as the public and philanthropic investments that supplemented the development of GeneXpert and the Xpert MTB/RIF and MTB/RIF Ultra assays.”

To read the full letter, click here.

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On 4 November 2019, Cepheid responded to the open letter demanding that the company reduce the price of Xpert cartridges to US$5, inclusive of service and maintenance, so that Xpert tests can be fully scaled up as the initial test for TB diagnosis.

In the response, Warren C. Kocmond, President of Cepheid, did not detail any plans to lower the price of Xpert cartridges from the high price of $9.98, or to incorporate service and maintenance into the price of the cartridge. He did allude to the cost savings resulting from manufacturing efficiencies, but claimed that these efficiencies are allowing Cepheid to pursue other investments.

The company stated that they “share” the advocates’ desire for more affordable TB tests, and that they are hoping for “breakthroughs” to enable affordable pricing in the future, but that they are “not able to predict the amount of further reductions or when they may be available.”

Cepheid’s full response to the open letter can be downloaded here.

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On 6 January 2020, TB advocates sent an open letter replying to Cepheid, acknowledging the company’s response and reiterating the request that Cepheid provide a detailed plan for how it will lower the price of Xpert tests for TB to US$5, inclusive of service and maintenance. The letter also requested that Cepheid lower the price of Xpert tests for HIV, hepatitis B and C, human papillomavirus (HPV), and other sexually transmitted infections (STIs), inclusive of service and maintenance.

According to an independent cost of goods (COGS) analysis commissioned by Médecins Sans Frontières (MSF), the estimated cost per cartridge to produce Xpert TB tests at volumes of 10 million is estimated to be as low as $3. The COGS analysis also found that there is no significant cost distinction to warrant the higher price of Xpert tests for HIV, hepatitis B and C, HPV, and other STIs: the basic materials to construct the bacterial and viral cartridges are the same.

“Given the current high volumes of sales and resulting manufacturing efficiencies and cost savings, we know Cepheid can do better than $9.98 per cartridge for TB tests… In 2011, Cepheid stated that ‘[t]he single most influential factor impacting the price of the test going forward is test volume...’ Higher annual test volumes have arrived; it’s time that the global public share the benefits of Cepheid’s lower production costs.”

The 156 signatories to the letter requested a response by 21 January 2020, “which should directly address the evidence presented in this correspondence, and articulate how Cepheid will lower the price of TB test cartridges to $5, as well as how Cepheid will lower the price of all GeneXpert assays, inclusive of service and maintenance.”

To read the full letter, click here.

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By TB advocates

Published: Jan. 8, 2020, 2:12 p.m.

Last updated: Jan. 8, 2020, 3:20 p.m.

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