Global non-profit health advocacy organization Unitaid said today that its board has approved $30 million in funding to increase access to Cepheid's Xpert MTB/RIF diagnostic test for multi-drug-resistant tuberculosis in resource-poor areas of the world.
Under the agreement between Unitaid, the US Agency for International Development, and the Bill & Melinda Gates Foundation, Cepheid is expected to reduce the price of its Xpert MTB/RIF diagnostic cartridges from the current compassionate pricing of approximately $17 to less than $10, Unitaid said.
The price reduction will allow an "accelerated roll-out" of the test, Unitaid said, adding that the agreement will apply to more than 145 purchasers in low- and middle-income countries, including those with a high burden of multi-drug-resistant TB and co-infection of HIV and TB.
The World Health Organization and the Stop TB partnership will administer the Unitaid grant and will help distribute Cepheid's test in approximately 20 countries, according to Unitaid.
In addition, the TB Reach initiative of the Stop TB Partnership, supported by the Canadian government, will co-fund up to $10 million to help implement the tests in certain countries. The TB Reach Initiative has already assisted with the early introduction of Xpert MTB/RIF in select countries.
In a statement, Cepheid said that it "welcomed" the Unitaid funding, and that it was "honored" that Xpert MTB/RIF is increasingly viewed as an important tool in the global fight against TB, but noted that a final agreement had not yet been reached.
"While discussions with UNITAID, USAID, and the Bill and Melinda Gates Foundation are ongoing at this time and the final agreement is not yet completed, we believe that all parties are committed to working together to enable [high-burden developing country] programs to access the test at around $10, which should accelerate adoption in the countries where it is most needed."
Cepheid developed Xpert MTB/RIF in collaboration with the Foundation for Innovative New Diagnostics and the University of Medicine and Dentistry of New Jersey, and with funding from FIND, the National Institutes of Health, and the Bill and Melinda Gates Foundation.
The test runs on Cepheid's automated sample-to-answer GeneXpert system, which integrates sample processing and PCR in a disposable plastic cartridge containing all reagents required for bacterial lysis, nucleic acid extraction, amplification, and amplicon detection. The only manual step is adding a buffer to sputum before transferring a defined volume to the cartridge. The test cartridge is then inserted into the GeneXpert device, which provides results in about 90 minutes.
In September 2010, researchers from UMDNJ and other organizations published a study in the New England Journal of Medicine demonstrating Xpert MTB/RIF's ability to accurately diagnose MDR TB in resource-poor areas of the world (PCR Insider, 9/2/2010).
Shortly thereafter, the World Health Organization endorsed the use of Xpert MTB/RIF in such regions after conducting an 18-month assessment of the test's field-effectiveness to diagnose early TB, MDR TB, and HIV-associated TB.
The WHO followed that endorsement with a call in July 2011 for countries to eliminate the use of traditional serological testing for TB and instead rely on WHO-recommended microbiological or molecular tests.
Since Cepheid launched Xpert MTB/RIF in 2009, the company has obtained CE marking for the assay and attempted to offer compassionate pricing for resource-poor areas of the world and countries with a high TB disease burden. In September 2010, around the time of the NEJM publication, the company was offering compassionate pricing that cut the standard $64 test cost approximately in half.
Eventually, under its high-burden developing country program, Cepheid was able to reduce the cost of its test cartridge to around $17.
Even with the compassionate pricing, Xpert MTB/RIF sales have grown to become the third-largest contributor to Cepheid's overall revenues: In 2011, Cepheid placed 418 GeneXpert systems with HBDC countries, and Xpert MTB/RIF contributed approximately $15 million to the company's overall revenue, with a roughly 60 percent/40 percent revenue split between the company's HBDC and commercial operations (PCR Insider, 2/2/2012).
In April, Cepheid CEO John Bishop said that sales of the Xpert MTB/RIF were relatively flat in the first quarter of 2012 as compared to Q4 2011, after they had increased sequentially for multiple quarters, thus highlighting the inherent variability of the program. Nevertheless, he also noted that 61 of the 145 eligible countries in the HBDC program had purchased GeneXpert systems and Xpert MTB/RIF tests to date (PCR Insider, 4/26/2012).
Still, not everyone has been satisfied with the pricing of Cepheid's test, as independent non-profit health advocacy groups such as the Treatment Action Group and the Treatment Action Campaign have penned open letters to Cepheid and FIND calling for further price reductions, recognizing the assay's potential to significantly stem the spread of TB in the developing world.
Now, with the funding from Unitaid set to reduce the cost of the cartridge to under $10, the organization expects to further drive widespread adoption of the test. "Xpert, once introduced and widely scaled up, is expected to dramatically reduce the diagnostic gaps for tuberculosis, in particular in its multi-drug resistant form, or associated with an HIV infection," Unitaid said in a statement.
However, the organization also noted that increased adoption of the test will "only trigger a reduction of the burden of tuberculosis if the new cases it will identify will receive an appropriate treatment. Governments and donors will need to identify sufficient funding for this purpose in the coming years."
It is unclear whether the Unitaid funding will be used to reduce the cost of the GeneXpert system, which the company currently sells for around $17,000 to HBDC countries. Company officials were not immediately available for comment.
Cepheid continues to work with the laboratory of David Alland at UMDNJ to develop new and improved versions of Xpert MTB/RIF and the GeneXpert system, including a highly multiplexed version for detecting extensively drug-resistant TB that the team is developing under a $7.5 million grant from the National Institute of Allergy and Infectious Diseases.
Cepheid also plans to tackle TB testing in the US. At Goldman Sachs' Global Healthcare Conference earlier this month, Bishop noted that TB testing in the US was a key initiative for Cepheid in 2013.
The US has a low rate of TB incidence, but still represents an opportunity of between 400,000 and 500,000 tests annually, he said. Cepheid plans to file its TB test with the US Food and Drug Administration by the end of this year and to launch the assay during the first half of next year.