June 8, 2010

June 8, 2010
AIDS Drug Companies to Yield on Pricing

Welcome to another day in my life. Today is Tuesday and I hope you are having a safe and great week so far. I know it is an extremely busy week for me so I am just trying to pace myself to make it through the week.

I do have some good news for a change. With the way HIV/AIDS care is going in our country, I will take any good news we can get.

Following ongoing advocacy campaigns spearheaded by AIDS Healthcare Foundation (AHF) that targeted several of the largest AIDS drug companies over their pricing and rebate policies for the nation’s AIDS Drug Assistance Programs (ADAPs), the federally funded, state run programs that supply lifesaving AIDS drugs to low-income Americans in need, AHF is pleased to report that yet another drug company: ViiV Healthcare, a new drug company formed in a partnership between GSK and Pfizer, has announced an agreement that will provide additional cost savings to cash-strapped ADAPs nationwide. The agreement was reached between ViiV and the ADAP Crisis Task Force (ACTF) of the National Alliance of State & Territorial AIDS Directors (NASTAD). ViiV Healthcare, which markets the AIDS drug Selzentry (maraviroc, first introduced by Pfizer in August 2007) and the commonly prescribed anti-retroviral treatments Combivir and Trizivir, joins Merck and Company, Johnson & Johnson’s Tibotec Therapeutics and Abbott Labs among the ranks of AIDS drug manufacturers that have recently offered significant price cuts, freezes, price rebate adjustments and other concessions on the pricing of their lifesaving AIDS medications to ADAP.

“We are pleased that ViiV Healthcare is joining the ranks of AIDS drug companies offering price concessions that will make lifesaving drugs far more affordable and accessible to the nation’s AIDS Drug Assistance Programs and the thousands of people with HIV/AIDS who rely on the lifeline these programs provide around the country,” said Michael Weinstein, President of AIDS Healthcare Foundation. “Just one month ago, we lauded Merck for its offer to double its ADAP rebates, freeze the price of its key AIDS drug and start paying its ADAP drug discount rebates upfront to cash-strapped states—an industry first. At the time, we urged other drug companies to quickly follow Merck’s lead. Since then, Tibotec, the maker of the protease inhibitor Prezista also announced cost containment concessions for ADAPs. Over the past two years, in the wake of growing crises facing many of our nation’s ADAPs, AHF stepped up its AIDS drug pricing advocacy targeting several of these drug companies with protests, advertising and email campaigns, lobbying huge investment funds such as CalPERS and CalSTRS to look into the issue. We now urge other remaining drug companies, including BMS and Gilead Sciences, to offer similar concessions and compromises on pricing and drug rebates.”

While many states are facing massive budget shortfalls and are seeking to cut services, more than twelve have also gone as far as to institute patient waiting lists to access ADAP services, including Florida with the nation’s third highest case HIV/AIDS load which instituted an ADAP waiting list starting June 1st.

Background on AHF Advocacy and AIDS Drug Pricing As part of its ongoing advocacy to reduce AIDS drug pricing and increase access to antiretroviral medications, particularly for programs like ADAP serving low-income Americans in need, AHF utilizes a number of advocacy tactics and elements to press drug companies to lower their prices. In recent campaigns, AHF targeted Merck, BMS, Tibotec, Pfizer (which first introduced ViiV’s drug Selzentry in 2007) among others with actions including:

* AHF press statements decrying the high price of various AIDS drugs when initially FDA-approved and brought to market, including statements on: (Selzentry, Pfizer, August 2007; Isentress, Merck, October 2007; Prezista, Tibotec, January 2008) or in the case of salvage therapies like Isentress and Selzentry, when subsequently FDA-approved for far wider use as a first line therapy (Merck/Isentress, July 2009; Pfizer/Selzentry, October 2009);

* AHF protests at drug company headquarters or at health care investor conferences (JP Morgan Health Care Investor Conference, San Francisco, Feb. 2010 [Merck]; Barclays Conference, Miami Beach, March 2010 [Merck]; Bank of America/Merrill Lynch 2010 Health Care Conference, New York, May 2010 [BMS]) where drug company executives were expected to speak, as well as at medical and scientific conferences (Conference on Retroviruses and Opportunistic Infections [CROI], San Francisco, Feb. 2010 [Merck]);

* AHF print ad campaigns, train station banner advertisements and direct mail advocacy postcard campaigns in drug company hometowns (Merck in Whitehouse Station, NJ; BMS in Princeton Junction, NJ);

* AHF officials testifying at investment committee board meetings (such as California Public Employees’ Retirement System [CalPERS] and California State Teachers’ Retirement System [CalStRs] to ask that the funds which hold billions of dollars of stock in many pharmaceutical companies look into the drug companies AIDS drug pricing and policies. (Letters sent to Merck from CalPERS and CalSTRS on pricing of Isentress, 2009/2010; letter sent by CalSTRS to Johnson & Johnson (Tibotec’s parent company) regarding Prezista, April 2010; letter sent by CalSTRS to BMS regarding Reyetaz, April 2010).

Background on ADAP, Drug Industry Rebates and Drug Costs compared with ADAP Patient Enrollment

The nation’s AIDS Drug Assistance Programs operate in a largely secretive, somewhat Byzantine manner with regard to their partnership and interaction with the drug industry in the ongoing purchase of lifesaving AIDS drugs that each state’s respective drug program makes available to its low income citizens in need. By law and also by design, there is little or no public transparency regarding the actual drug pricing and purchasing process. And while ADAP officials and drug companies negotiate individual discounts on the price of AIDS drugs, a majority of these discounts are paid in the form of drug company rebates that are reimbursed to states long after the purchase and distribution of the drugs, a practice that clearly favors the industry. In essence, cash-strapped states—many of which have instituted ADAP wait lists and are exploring other drastic cost containment mechanisms—are floating short term loans to the multi-billion dollar pharmaceutical industry while they await their previously negotiated rebates. State ADAP officials must file drug company-required paperwork and documentation, which slows—or oftentimes halts—the entire rebate process. Last month, in an industry precedent, Merck announced it would double the dollar value of its ADAP rebates and also begin paying those rebates upfront before the state programs have distributed the lifesaving drugs to patients in need.

According to an annual industry report issued by the National AIDS State and Territorial Directors (NASTAD) in early May 2010, “Drug spending by ADAPs has increased more than seven-fold (617%) since 1996, more than twice the rate of client growth over this same period.” An AHF analysis of NASTAD’s report also showed that since 2000, ADAP spending on lifesaving antiretroviral medications (ARVs) has increased 120%, but the number of clients served by ADAP has only increased 80%.

“The price of these AIDS drugs continue to put an enormous strain on taxpayer funded ADAPs nationwide and the thousands of patients they serve,” added AHF’s Weinstein. “The limited funding available for ADAP is being exhausted by the high cost of many overpriced AIDS drugs. We thank the those companies such as Merck, Tibotec and ViiV for the doing the right thing and taking steps to improve access and urge others such as Gilead and BMS to follow suit.”

Until we meet again; here's wishing you health, hope, happiness and just enough.

big bear hug,

Daddy Dab