Abdel Gawad Ellabbad knows exactly how he was infected with hepatitis C.
As a schoolboy in this Nile Delta rice-farming village, his class marched to the local clinic every month for injections against schistosomiasis, a parasitic disease spread by water snails.
A nurse would boil the syringes, fill each with five doses and then jab five boys in a row with a single needle.
“I didn’t want that hot needle touching me, so I thought I’d be smart,” Ellabbad, 52, said. “I let the other guys go first.”
Six million Egyptians were infected with hepatitis C by unsterile needles during the country’s decadeslong fight against schistosomiasis. The virus spread insidiously; today, at least 10 percent of Egyptians, nearly 9 million people, are chronically infected, the highest rate in the world.
But a grand experiment unfolding across the country may change all that.
Once demonized for withholding lifesaving AIDS drugs from poor countries in Africa, chastened pharmaceutical companies are testing an alternative strategy: a complicated deal to sell hepatitis drugs at a small fraction of their usual cost while imposing tight restrictions intended to protect lucrative markets in the West.
The strategy has raised howls of outrage from public health advocates in some quarters. If it succeeds, though, the arrangement in Egypt may serve as a blueprint not just for curing hepatitis around the world, but also for providing other cutting-edge medicines to citizens in poor countries who could never afford them.
The experiment here is about a year old and, while still fragile, appears to be headed for success.
Ellabbad, for one, was finally cured of hepatitis this spring. An air-conditioning repairman, he took a three-month regimen that included sofosbuvir, first of the new generation of miracle drugs. The pills would have cost more than $84,000 in the United States.
He got them free from the Egyptian government, which paid about $900.
“Before, I felt like I was dying,” he said. “Now I feel like I’ve never felt before. Like I’m 35 again.”
A Worldwide Problem
Hepatitis C is a global crisis: About 150 million people are chronically infected, four times as many as have HIV, and about 500,000 die each year of its complications, particularly cirrhosis and liver cancer.
The virus is a resilient foe. Usually transmitted by contact with blood, hepatitis C may not cause symptoms for years. Some patients clear the infection on their own, but in most, it becomes chronic, slowly damaging the liver over time.
Nowhere is the virus more entrenched than in Egypt. There are an estimated 150,000 new infections each year, caused by reuse of disposable syringes, accidental needle sticks, tainted medical equipment, and even the sharing of nail clippers and toothbrushes among family members.
Each infected Egyptian passes the virus to three others on average, said Dr. Manal Hamdy El-Sayed, who directs the national hepatitis-awareness campaign. Egypt’s National Liver Institute runs 50 treatment centers and consumes a third of the national health budget.
Fear of the virus is pervasive.
Sherif Mechawy, a barber in an upper-class neighborhood of Cairo, pumps sanitizer on his hands and holds up a clear plastic package containing a comb and a disposable razor for each client.
“They have to see me open it with their naked eyes,” said Mechawy, 39. About a quarter of his customers prefer to bring their own clippers and scissors.
For full shaves, he wears latex gloves. The hepatitis virus can survive two days or more on a surface, and Mechawy knows even the groove where the razor fits in the holder is dangerous.
Even harder hit than Cairo are the villages of the Nile Delta, where half of all men older than 50 are infected.
Mohamed Khafagy, a tour guide from a rice-farming village, said every family he knew had lost someone to hepatitis C. Liver disease killed his father, two uncles and a cousin.
Khafagy, 39, is infected, too, and has developed Stage 3 fibrosis, which in a wealthier country would prompt rapid treatment.
He knows that drugs to cure his infection are trickling into the country from the West. But the nearest government clinic, in Kafr el-Sheikh, has a three-month wait for appointments.
“Will I last that long?” he wondered aloud.
A Game-Changing Drug
For a poor country, Egypt has a relatively effective health care system, including legions of liver specialists. Committed to repairing the damage done by the schistosomiasis campaign, the health ministry in 2007 developed an ambitious national hepatitis treatment plan using two old drugs: interferon and ribavirin.
The drugs are loaded with side effects and difficult to tolerate. Last year, Gilead Sciences, based in California, offered an alternative.
The company makes sofosbuvir, which since 2013 has been sold in the United States as Sovaldi for about $1,000 per one-a-day pill. A course of the drug, taken with ribavirin and often interferon, usually cures hepatitis C infection in 12 weeks.
Sofosbuvir is a blockbuster; in its first year on the market, the drug earned Gilead more than $10 billion.
But for the past year, Gilead has sold the drug to the Egyptian government for about $10 a pill. The government distributes it to pharmacies across the country, where it is dispensed free to patients.
Gilead also allows 11 Indian and two Egyptian companies to make sofosbuvir under license and to sell it at any price they like, in return for a 7 percent royalty.
Gilead was under some pressure to make the drug more widely available. Egypt’s patent office rejected the company’s application, making it inevitable that generic versions would eventually be sold there, said Dr. Wahid Doss, the chairman of the National Committee for Control of Viral Hepatitis.
In return for selling sofosbuvir cheaply, Gilead asked that Egypt impose strict restrictions on every bottle to prevent the drug from being sold on the black market and undermining its business elsewhere.
All pills must be dispensed by government pharmacies, for example, and all patients must turn in an old bottle to get a fresh one. Those receiving new bottles must immediately unscrew the cap, break the seal and take the first pill in front of the pharmacist – making it nearly impossible to resell the bottle.
Those restrictions infuriated international activists pushing for greater access to medicines, who saw them as violations of patients’ rights.
Heba Wanis, a pharmacist who until recently worked at the Egyptian Initiative on Personal Rights, said she found the requirement to take a dose in front of the pharmacist “humiliating” and felt it “raised a lot of ethical issues.”
Dr. Jennifer Cohn, medical director of the drug access campaign at Doctors Without Borders, described the requirements as “a third party introduced into the doctor-patient relationship.” Giving a drug company control over who receives its products sets “an incredibly dangerous precedent,” she said.
But so far, no outrage is visible on the streets.
“I agree with this completely,” said Ellabbad, the air-conditioning repairman. “I’m a poor man. If I did not have to hand in the bottle each time, I might have sold them to buy my son a house.”
Egypt’s health officials also say that the deal is fair.
“We don’t have a problem with the rules,” said Dr. Gamal Esmat, a liver specialist at Cairo University Medical School and a co-author of the national hepatitis plan. “They are to prevent the black market from moving it to other countries.”
”If you can solve the hepatitis problem in Egypt, you are a hero,” he added. “The drug companies know that.”
The Egyptian government’s ambitious goals are to treat 300,000 hepatitis patients a year starting in 2016 and to drive the national infection rate below 2 percent by 2025.
The first year was successful: A total of 125,000 patients have been treated with sofosbuvir. Now that licensed generic versions are available for as little as $4 a pill, Egypt is even phasing out purchases from Gilead.
Instead, the company’s next-generation product, Harvoni, a sofosbuvir-ledipasvir combination that cures with no need for interferon or ribavirin, is being tested for rollout in December at about $14 a day.
Already, the arrangement that Gilead struck with the Egyptian government has been emulated by other pharmaceutical companies.
In August, the government announced that it would import a rival three-drug combination named Viekira from AbbVie. Like Gilead, AbbVie offered the pills at about 1 percent of the price in the United States, or about $13 a day. In a further anti-resale measure, AbbVie renamed it Qurevo for the Egyptian market.
In October, the government began importing Daklinza, a hepatitis drug from Bristol-Myers Squibb.
The sudden availability of world-class hepatitis medicines has prompted “great excitement in Egypt,” Doss said, adding, “People are getting cured.”
Indeed, some Egyptian patients seem mystified by their good fortune.
“Do you Americans love Egyptians more than yourselves?” asked Hany Tawfik, 66, a private equity specialist who in 2014 was the first Egyptian to receive sofosbuvir. “Why aren’t you putting pressure on Gilead to sell to you at a reasonable price, too?”
A Drug Company Shift
For the moment, executives at the drug company, too, seem pleased with the deal they struck. Large-scale diversion of hepatitis drugs onto the black market has not happened in Egypt, and officials do not seem particularly worried that it will.
“Some leakage is a given,” said Gregg H. Alton, executive vice president for corporate and medical affairs. “Our goal isn’t to stop it 100 percent; if we wanted that, we’d do it the draconian way and not be in the country at all. But we do want to stop large leaks.”
In the United States and Europe, the company has been condemned for price gouging. Its new hepatitis drugs are among the most costly in the world, and the market for them is immense.
Gilead’s approach in Egypt is a radical departure, informed by the pharmaceutical industry’s disastrous experience with AIDS drugs in Africa.
In 1997 South Africa, which had the world’s worst AIDS burden, passed a law allowing it to suspend patents and buy generic versions of HIV drugs. Western manufacturers retaliated, closing some of their South African plants and threatening to stop selling their new drugs there.
They went so far as to sue President Nelson Mandela, starting what former U.N. Secretary-General Kofi Annan described as a “worldwide revolt of public opinion.” The tactic backfired.
Poor countries forced price cuts in AIDS medications by threatening to revoke patents. The Indian generics industry emerged, and it now makes most of the world’s HIV medicines – at less than $100 per patient per year.
Those low generic prices prodded wealthy donor nations to create programs like the Global Fund and the President’s Emergency Plan for AIDS Relief. Now 14 million people infected with HIV are receiving treatment.
In 2006, Gilead bucked the industry’s reluctance to cooperate with Indian generics companies and gave several of them licenses to make its best HIV drug, tenofovir, for distribution in Africa in return for a 5 percent royalty.
In the nine years since, millions of Africans have taken generics containing tenofovir, but those pills have not turned up in large amounts in the United States or Europe. “Our worst fears did not come true,” Alton said.
Gilead does not want to take a loss in poor countries but is willing to help at almost no profit, he added. But critics note that in its arrangement with Indian generics manufacturers, the company reserved not just the richest markets for itself but also middle-income countries like China and Russia, where an estimated 73 million people are infected with hepatitis.
Indian licensees were originally allowed to sell generic versions in only 91 of the poorest countries.
Alton acknowledged that millions of patients had been excluded from the deal Egyptians received, but said Gilead was negotiating with their governments and “will discount in them at rates that are realistic.”
By August, Gilead had added 10 middle-income nations to its access program, including Brazil and Argentina, and was selling all of them Sovaldi at $10 a pill and Harvoni at about $14.
Outside activists and some Egyptian doctors worry that the current orderly arrangements could spiral into chaos as more generics appear.
Egypt has thousands of small pharmacies that are barely regulated. Drugs are often sold without prescriptions. Officially, the government sets private-sector prices; in reality, the pharmacists charge what they want.
Gilead’s restrictions may have been observed by the Egyptian government, but they will be ignored in small private pharmacies, a prominent generics maker predicted.
“I don’t think patients will accept them,” said Sherine Helmy, the chief executive of Pharco, a major Egyptian drugmaker. “If you are sick, and your wife comes to buy your bottle, should the first pill be taken by your wife?”
And what happens if foreigners infected with hepatitis C in developed countries begin to see Egypt as the place to lay hands on a fast and cheap cure?
If an uninsured American patient “has a prescription from an Egyptian doctor, should we stop him?” Helmy said.
“You cannot prevent people who are sick from getting medicine,” he added. “It’s a human right.”