New Kids on the Bloc

Perhaps at no other time in the development of treatments for fighting HIV has the new-drug pipeline been such a paradox of bright possibilities and dark realities. On the positive side, more than two dozen medications are in human trials right now, and many are expected to reach the consumer market within the next few years. Virtually all of these drug candidates offer significant advantages over currently available treatments'by targeting drug-resistant virus, having fewer side effects, being easier to take, or attacking HIV at different infection and replication stages'according to James Rooney, vice president of research at Gilead Sciences, which has several anti-HIV drug candidates in development. But some of these forthcoming medical marvels might be so expensive that they could be difficult for many HIVers to afford as treatment options. For example, some sophisticated antibody therapies require massive numbers of antibodies to be produced, and these are extremely pricey for the developers to manufacture, says Judith Feinberg, MD, president of the Great Lakes chapter of the American Academy of HIV Medicine. Because of these increased expenses, the costs of resulting pharmaceuticals will similarly increase relative to other types of medications for consumers. Even new drugs that are meant to replace existing medications in triple-drug cocktails are likely to be more expensive, one insider warns. 'Generally speaking,' says Lei Chou, director of the Access Project at New York's AIDS Treatment Data Network, 'when a new drug comes out, it's set at a pricing point higher than existing drugs'usually around 20% higher or more.' Rob Camp, antiviral project director at New York'based Treatment Action Group, warns that novel therapies with no real competition in their drug class or those shown to be particularly effective as salvage-therapy treatments are likely to be priced even higher than the standard 20% markup over existing treatments. 'If a new agent works,' he says, '[manufacturers] can pretty much charge whatever they feel like. If there are limited other options, they're going to charge top dollar for it.' In a worsening scenario the nation's publicly funded HIV treatment plans'AIDS Drug Assistance Programs and Medicaid'are facing severe fiscal crises just as forthcoming treatments threaten to be significantly more expensive than existing medications. According to Chou, the client burden for ADAP programs is expected to grow dramatically, affected by new state budgets'scheduled to take effect in June, as of press time'that would cut Medicaid spending. Scores of HIV-positive people who might become ineligible for Medicaid programs would be forced to turn to the last-resort safety nets of state-run ADAPs'where more than 1,200 people nationwide are already on enrollment waiting lists. 'Adding more medications [that also happen to be more expensive] to these systems'while certainly important from the perspective of treating the disease'will certainly also overwhelm those systems financially,' warns Gene Copello, MD, executive director of Florida-based AIDS Institute. Coming Up With Solutions There is hope on the financial horizon, though. ADAP and Medicaid groups have begun unprecedented cooperative efforts to jointly negotiate as a power bloc for bulk discounts on anti-HIV medications, according to Bill Arnold, director of the ADAP Working Group. Around the middle of 2003 officials from the six states with the largest ADAPs'California, New York, Texas, Florida, Illinois, and New Jersey'banded together for the first time to successfully press pharmaceutical companies to lower their prices on anti-HIV drugs. And in April federal officials gave the green light to a joint drug-buying effort by Medicaid programs in five states'Michigan, Vermont, New Hampshire, Nevada, and Alaska'to negotiate medication prices and buy prescription drugs in bulk quantities. U.S. Department of Health and Human Services secretary Tommy Thompson said the collaboration'and others like it, even on a national scale'could help lower the cost of drugs and allow cash-strapped states to continue to provide medications to low-income citizens. In Alaska alone the savings from the program in 2005 is expected to be about $20 million. That money, officials point out, will go a long way toward being able to pay for additional medication and services for Medicaid patients. 'We're going to see a lot more of this kind of approach to finding savings,' Arnold says. 'If the economics of the market are such that the only real clout you have is to buy twice as much, you have to look around for other people to join with you to buy twice as much. The larger the negotiating entity, the larger the price cut will be because of the clout the entity has.' Medicaid programs and some state health agencies also are beginning to turn to Canadian pharmacies to 'reimport' brand-name drugs'including antiretroviral medications'they sell at a fraction of U.S. prices because of Canadian government cost controls. The medications are considered reimports because they usually originate from manufacturers in the United States, who sell them as exports for the Canadian market. California lawmakers, who debated a drug-reimportation bill in May, say buying all of the state Medicaid program's drugs from Canada could save $30 million a year. And a Minnesota drug-reimportation program designed only for state employees and their dependents is expected to save $1.4 million by the end of 2005. ADAPs, however, are not considering reimporting medications, officials say, because of the discounts they already receive on brand-name drugs. The Future of the Business Copello believes that the bloc negotiations and multistate bulk-buying agreements reached so far are only the beginning of such cost-saving efforts. 'It's encouraging that this is happening, and I think it will have an impact and lower prices in the purchasing pool,' he says. 'I think it's going to become more of a trend, and I think it's a good trend.' It is also a trend whose timing could not be better, according to AIDS activists. In one intensely watched example, Abbott Laboratories stunned the HIV treatment world in December by boosting the price of Norvir, its 8-year-old protease inhibitor, by more than 400%, significantly increasing medication costs for people who use the drug to boost the effects of other protease inhibitors. The only experimental anti-HIV drugs currently in final human trials and expected to reach the consumer market in the next year or two'capravirine, an Agouron nonnucleoside reverse transcriptase inhibitor, and tipranavir, a Boehringer Ingelheim protease inhibitor'are both designed to be taken with Norvir as a booster. 'That raises really hideous, horrible questions about how costly these treatments are going to be,' Camp warns. 'Unless the new drugs are priced at bottom-barrel prices, [the regimen is] going to be very costly.' Bloc drug-discount negotiations or bulk-buying practices could help make these two new treatments more affordable, but such collaborative efforts should not focus solely on getting the best medication prices, both Chou and Feinberg say. ADAPs, Medicaid programs, and even private HIV treatment centers must band together to convince pharmaceutical companies to consider pricing issues'whether their new medications will 'break the bank,' as Feinberg puts it'before a potentially lifesaving medication is hyped in the media and then priced out of reach to those in need. This was largely the case with Fuzeon, which reached the market in mid 2003. Its $20,000 annual price tag forced many ADAPs to delay adding it to their formularies, restrict the number of clients who could receive it, or flat out refuse to pay for it. According to Chou, drugmakers also need to be made aware that while their anti-HIV drugs were once used mainly for short-term treatment of people in late-stage HIV disease'people who typically did not live long'their usage is dramatically different today. 'We're not using these drugs in acute situations anymore,' he explains. 'It's turning more and more into lifelong maintenance therapy. That fundamentally changes the life span of a drug and its profit margin. The industry needs to take a good look at that'and at the fiscal realities in the United States and elsewhere'and reevaluate their pricing structures because it can't continue like this.'