Substantial public investments in GeneXpert underscore need for affordable pricing

August 31, 2021 – Treatment Action Group (TAG)’s comprehensive analysis found that the public invested at least $252 million USD in the research and development (R&D) of GeneXpert. GeneXpert cartridges and instruments are used to diagnose tuberculosis (TB), HIV, viral hepatitis, sexually transmitted infections, COVID-19, and other infections. This substantial public investment stands in stark contrast to the lack of affordable pricing and favorable service and maintenance terms from the diagnostics company Cepheid. The finding is detailed in the new PLOS ONE study, “Public Investments in the Development of GeneXpert Molecular Diagnostic Technology.”

“This analysis is, to our knowledge, the only published study to quantify, in detail, public sector investments in the development of a diagnostic technology,” said Dr. Dzintars Gotham, the principal researcher and author of the study. “Where there are substantial public investments in developing a health technology, it is important to examine whether the public sector has received adequate returns for its investments.”

The $252 million figure accounts for early development at U.S. government labs, research funded by the U.S. National Institutes of Health, U.S. government grants, R&D tax credits, and funding from non-profit and philanthropic sources, but given the limited data available in the public domain, this figure should be considered a conservative estimate.

“Earlier analysis by Médecins Sans Frontières (MSF) showed that it costs Cepheid less than $5 to produce one test while Cepheid is charging low- and middle-income countries a mark-up of at least 100% for TB tests and 300% for COVID-19 tests,” said Stijn Deborggraeve, Diagnostics Advisor for Infectious Diseases at MSF Access Campaign and co-author of the new PLOS ONE study. “Cepheid’s profiteering during the COVID-19 pandemic is unacceptable, especially considering the massive amount of public funds that Cepheid received to develop the GeneXpert technology and roll out the system in low- and middle-income countries.”

“This study brings to light the extensive public funding that subsidized Cepheid’s R&D costs and further supports global demands for the company to make GeneXpert tests available at fair and equitable prices that reflect the cost of production plus a reasonable profit markup, with volume-based price reductions,” said David Branigan, TB Project Officer at Treatment Action Group and co-author of the PLOS ONE study.

This analysis highlights the importance of ensuring that public funding for health product development comes with conditions that promote transparency and equitable access. It complements the results of an earlier study, which found that public investments in the development of the life-saving TB drug bedaquiline far exceeded those of Johnson & Johnson, the proprietor of the drug; meanwhile the price of bedaquiline remains a barrier to scaling up treatment coverage.

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About GeneXpert
GeneXpert tests are rapid, accurate, and automated diagnostic tests, making them ideal for use in decentralized settings without extensive laboratory infrastructure. GeneXpert instruments are priced at $17,000 per four-module unit, service and maintenance plans cost approximately $2,000 to $3,000 annually, and individual test cartridges are currently priced from $9.98 (TB) to $19.80 (COVID-19) per test.

An independent cost-of-goods-sold analysis commissioned by MSF Access Campaign found that it costs Cepheid from $2.95 to $4.64 to produce each test cartridge at annual volumes of 10 million, which was exceeded in 2017 for TB tests alone. The civil society Time for $5 Coalition has demanded Cepheid reduce the price of GeneXpert tests to $5, inclusive of service and maintenance, across diseases.

About Treatment Action Group
Treatment Action Group (TAG) is an independent, activist, and community-based research and policy think tank committed to racial, gender, and LGBTQ+ equity; social justice; and liberation, fighting to end HIV, tuberculosis (TB), and hepatitis C virus (HCV). TAG catalyzes open collective action by affected communities, scientists, and policymakers to ensure that all people living with or impacted by HIV, TB, or HCV — especially communities of color and other marginalized communities experiencing inequities — receive life-saving prevention, diagnosis, treatment, care, and information. We are science-based activists working to expand and accelerate vital research and effective community engagement with research and policy institutions for an end to the HIV, TB, and HCV pandemics.

About MSF Access Campaign
The Access Campaign is part of Médecins Sans Frontières (MSF), an international, independent, medical humanitarian organisation. Our work is rooted in MSF’s medical operations and supports people in our projects and beyond. We bring down barriers that keep people from getting the treatment they need to stay alive and healthy. We advocate for effective drugs, tests and vaccines that are: available, affordable, suited to the people we care for, and adapted to the places where they live.

Source: Treatment Action Group