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turned to Coartem to replace their existing antimalarial medicines rendered increasingly ineffective by the emergence of drug- resistant strains of the malaria parasite.
As recently as 2002, annual production of Coartem was only 100 000 treatments and the original 2001 agreement between Novartis and the WHO had projected worldwide demand of slightly more than two million treatments by 2005.
The supply chain for Coartem and other ACTs is complex and time consuming. Artemisinin, the intermediate from which the active ingredient in all ACTs is derived, is a plant-extraction product, and crops of Artemisia annua must be planted one growing season ahead of harvesting and extraction for use in production.
Cultivation requires a minimum of seven months. Extraction, drug-substance production, tableting, packaging and shipping extend the production cycle to 14 months.
During 2005, Novartis broadened and diversified its supplier base for artemisinin and other key raw materials – transitioning from China’s largely wild crop of Artemisia annua to more reliable commercial cultivation on plantations. A key step was an agreement between Novartis and East African Botanicals (EAB) that led to new planting of more than 1 000 hectares in Kenya, Tanzania and Uganda. The additional commercial cultivation boosted global agricultural production of Artemisia annua to roughly 10 000 hectares, a sufficient level to support projected future demand for ACTs.

Financing from Novartis enabled EAB to offer firm purchasing agreements to numerous local farmers, including many on small lots. At the same time, construction or expansion of extraction and purification facilities in Kenya and Uganda is creating hundreds of jobs, improving the local economy and upgrading safety standards.

JOINT PROJECT
Artemisinin has been used for centuries in traditional Chinese medicine to treat malaria. The Chinese researched and discovered the medicinal value of artemisinin and Chinese scientists played pivotal roles in research and development of both of the active ingredients in Coartem. The drug was co-developed by Novartis and Chinese partners who continue to supply active ingredients, though the final Coartem tablets are produced by Novartis in China and the US.
As part of last year’s scale-up, both the Chinese firms that manufacture active ingredients – Kunming Pharmaceutical Corp. (KPC) which provides artemether and Zhejiang Medicine Co. (ZMC) which provides lumefantrine – completed major capacityexpansion programs and passed inspections by Australia’s main medicines regulator certifying compliance with international good manufacturing practice (GMP).
Meanwhile, Novartis raced to install new production and packaging lines at a pharmaceutical plant in Suffern, New York. Production of Coartem at Suffern began in September and annual capacity exceeds 100 million treatments. In all, Novartis and
partners invested almost USD 50 million during 2005 to expand production capacity for Coartem.
“This has really been a joint project and I can’t give enough credit to the Chinese government and Chinese scientists,” Dr. Vasella adds. “The partnership has been outstanding.”

FUNDS FLOW
Along with the exceptional efforts on the supply side, parallel efforts by the WHO and the Global Fund to Fight AIDS, Tuberculosis and Malaria have been critical in expanding access to Coartem. The WHO provides technical guidance on malariacontrol policy and helps countries make proper use of the new drugs when they arrive in the field.
Meanwhile, the Global Fund has become the world’s largest financier of antimalarial programs and has committed more than USD 200 million for the 2005-06 period, sufficient funding to cover projected Coartem demand through the end of 2006. Additional funds for malaria-control programs could become available this year through other international initiatives, such as the USD 1.2 billion US Presidential Malaria Initiative.
“While we provide Coartem at cost, our efforts would be in vain without the Global Fund’s financial aid allowing governments of malaria-endemic countries to purchase the drug,” Dr. Vasella says.

 

NOVARTIS GROUP BUSINESS REVIEW 2005