The AIDS Healthcare Foundation announced Thursday that it is urging all AIDS drug manufacturers to “reduce the cost of their medications by 20% for cash-strapped state AIDS Drug Assistance Programs (ADAPs)—the federally-funded, state-run program to provide HIV/AIDS drugs to low-income Americans.”
The letter came the same day the Florida Department of Health reached an agreement with Welvista, a charitable group set up by pharmaceutical companies, to provide drugs to Florida patients relying on its AIDS Drug Assistance Program. Florida’s program, as of Feb. 3, has a waiting list of 3,085 patients, the longest in the U.S. (See full waiting list below.)
The press release indicates:
AHF made the request informal letters to each of the major AIDS drug makers: Abbott Labs, Boehringer Ingelheim, Bristol-Myers Squibb, Genentech, Gilead, Merck, Tibotec, and ViiV.
In the letter, AHF’s President Michael Weinstein states: “On behalf of the thousands of Americans whose access to life-saving care is threatened, AIDS Healthcare Foundation (AHF) requests that you reduce drug prices for AIDS Drug Assistance Programs.
Ged Kenslea, communications director of the foundation told The Florida Independent the pharmaceutical companies have 10 days to respond to the letter. He said he hopes the nationwide Drug Assistance Program funding crisis may prompt a more in-depth response from the manufacturers.
Kenslea explained that due to the costs, two or three antiretrovirals can cost up to $12,000 a year, adding that “the pharmaceutical pricing model has become unsustainable.”
Joseph Terrill, domestic testing manager for the foundation, told the Independent, “Price cuts have been an ongoing conversation with the pharmaceutical companies over the last few years, and in some cases, we’ve been successful in getting them to increase rebates or price freezing.”
“I support the AIDS Healthcare Foundation call to pharmaceuticals to reduce prices,” Michael Rajner, legislative director of the Florida GLBT Democratic Caucus, told the Independent. “The pharmaceutical industry continues to show profits. At the same time, they have provided unprecedented access and support through AIDS assistance programs to thousands of patients. But I support cuts because we have ended up rewarding them through public-funded programs.”
Tim Boyd, the policy research coordinator for the foundation, explained that from 1992 through 1996 the yearly average wholesale price of one anti-retroviral drug was $4,000. By the 2007-2010 period, the average wholesale cost of one drug in one year was almost $12,000. He pointed out that it is common for patients to be on a three-drug cocktail. (See full graph below.)
According to the foundation, in 2009, the total U.S. sales of Atripla was $1.6 billion. The Drug Assistance Program price for that drug was $10,000 per patient per year, while the wholesale price was $21,000 per patient per year. In that same year, U.S. sales of the anti-retroviral Reyataz totaled over $770 million while Isentress totaled $370 million.
Boyd explained that the government-funded AIDS drug programs get a discount on these antiretrovirals, and added that by 2007 about 87 percent of Drug Assistance Program funds were used to buy those drugs.
In an email to the Independent, Boyd added:
One of our biggest concerns regarding pricing is that each subsequent generation of AIDS drugs are priced higher than the previous one. New [anti-retrovirals], such as Isentress (made by Merck) and Reyataz (made by Bristol-Myers Squibb), are driving up costs in ADAP to the point that paying for one of these drugs means fewer people can be served using existing funds (the crisis we now find ourselves in).
We don’t begrudge the companies for their profits. We recognize the work they do in developing lifesaving drugs, and bringing them to market. We also realize that company profits will help fund the research necessary to develop the next generation of AIDS drugs. However, too often the pricing policies of companies makes access to these drugs prohibitive. Funding for ADAP and other programs is limited, and because of this, the high prices charged for AIDS drugs like Reyataz or Isentress means that fewer people can access treatment.
The AIDS Healthcare Foundation press release adds:
A 20% price reduction (or rebate in applicable states) will enable ADAPs to provide lifesaving treatment to all those who need it. Moreover, this discount will have negligible impact on your company’s revenue from the ADAP program. ADAP budgets for purchasing drugs are fixed– as evidenced by the waiting lists – which means that drug companies will receive all of the money available to the program regardless of pricing. The only question is, given the cost of drugs, how many people ADAPs will be able to serve with this set pot of funds.
A Drug Assistance Program watch update:
Antiretroviral drug price progression:
