Price of AIDS drug soars fivefold;"We view this as very unethical"

The Seattle Times ^ | Monday, January 05, 2004 | Carol M. Ostrom

[yankeedame]

Monday, January 05, 2004 - Page updated at 12:00 A.M.

Price of AIDS drug soars fivefold

By Carol M. Ostrom
Seattle Times staff reporter

A huge price increase for a key HIV/AIDS drug has taken patients by surprise, bewildered pharmacists and prompted a cadre of angry doctors to fire off a protest to the pharmaceutical company.

Pete Widowitz, an AIDS patient who has used Norvir successfully since the mid-1990s, discovered the price increase last month when his pharmacist called about a refill Widowitz had phoned in.

Widowitz pays for the medications and then is reimbursed by his insurance company. So the pharmacist wanted him to know that his cost for Norvir, one of several drugs he takes, had increased from $665 per month to more than $3,200 — nearly five times.

About 20,000 HIV/AIDS patients nationwide use Norvir, most in small doses with other medications, said a spokeswoman for Abbott Laboratories, the maker of Norvir, which came onto the market in 1996. Like Widowitz, many patients live on limited incomes and are fearful that this price increase will trigger larger insurance premiums or closure of public programs that subsidize medications.

Abbott's move has mobilized AIDS activists around the country and, some say, the world.

"This is an international issue now," said Fred Schaich, president of the International Foundation for Alternative Research on AIDS (IFARA). Schaich said AIDS activists in many countries are organizing to put pressure on Abbott, which says the price increase was necessary to help fund creation of other drugs for AIDS (acquired immune deficiency syndrome) and HIV (human immunodeficiency virus), the virus that causes AIDS.

Locally, about 30 doctors and other health providers who care for HIV/AIDS patients have protested to Abbott, a well-established pharmaceutical firm headquartered in Illinois. They warned that the "unconscionable price increase" for the drug will have "long-term serious consequences."

"We view this as very unethical," said Dr. Rob Killian, a Seattle family physician who signed the letter. "Not in my 15-year history have I seen anything like this — for a drug out for years, to increase the price this much."

Gaetano Forte, head pharmacist at Cherry Street Pharmacy on Capitol Hill, said he also had never before seen a price increase of that magnitude. "It was very upsetting to everyone. We all feel terrible about this, and we don't understand why a drug company would do something like this."

Abbott spokeswoman Laureen Cassidy said the higher price helps pay to develop new drugs and new formulations of existing drugs. "This is about preserving patient choice," she said.

For example, the company is now developing new versions of HIV/AIDS drugs that don't require refrigeration, important in the developing world, Cassidy said. Abbott provides Norvir at cost in Africa, according to its Web site.

"There is an escalating cost for bringing new drugs to market for the world, both domestically and for developing countries, and Abbott has been very much a part of the solution, including increasing access initiatives in the developing world," Cassidy said.

The new price also better reflects current market value of Norvir, which is now typically taken as a smaller-dose "booster drug" in combination with other, newer medications, she said.

Cassidy said public programs providing assistance to AIDS patients will be protected from the price increase until June 2005. Nationwide, about half of the patients taking the drug get help through state Medicaid or an AIDS Drug Assistance Program, she said. Abbott also is enlarging its patient-assistance program, which allows people without insurance to get the drugs for free, she said.

The company's reassurances, however, left some local officials unconvinced.

"While we will be sheltered (from the increase), we won't be sheltered very long," said Jack Jourden, director of the state Department of Health office that supervises the state's assistance program. The price increase, he said, "doesn't make sense to us."

Patients outside the program, particularly those who pay percentage co-pays on drugs, may be drastically affected, Jourden said.

The Governor's Advisory Council on HIV/AIDS, Jourden said, has asked Gov. Gary Locke to protest the price increase directly to Abbott. Locke's office said the request is under review.

Dr. Brad Roter, a consultant to the HIV Early Intervention Program — this state's AIDS Drug Assistance Program, which helps patients with drug costs and insurance premiums — said the increase may cause a serious cash-flow problem in some states. Washington and many other states pay the new price upfront and then get the difference back as a rebate from the manufacturer.

The state's Medicaid program paid about $329,000 last year for Norvir for 244 patients, said Jim Stevenson, spokesman for the Medical Assistance Administration of the state Department of Social and Health Services.

The price increase has inflamed simmering anger about drug pricing among doctors, patients and AIDS activists.

Norvir, the brand name for ritonavir, is one of the early protease inhibitors, drugs that in the mid-'90s changed AIDS from a certain death sentence to a chronic disease for many patients. The medications drastically reduce virus levels by curtailing viral replication.

Today, Norvir is used mostly as a "booster" drug for other, newer-generation HIV/AIDS drugs — many of them made by Abbott's competitors.

It's now very unusual to use any other protease inhibitor without Norvir, said Dr. Peter Shalit, Widowitz's doctor, "because they just work so much better with them."

About 80 percent of the patients taking Norvir, said Cassidy, the Abbott spokeswoman, take only one or two pills daily, instead of the 12 per day that used to be a typical dose.

A daily dose of 12 pills used to cost about $20, Cassidy said. Now, even with the higher cost per pill, a typical daily dose of one pill costs about $8.50, and a daily dose of two pills about $17. "It's well below what most protease inhibitors are priced at; it's the lowest-priced protease inhibitor, even with the price increase."

But if patients were taking the old typical dose — the one Widowitz was on — the cost would be more than $100 per day, or about $38,000 per year.

Abbott is pricing Norvir as though it is a "full component" in the drug cocktail, complained Shalit. "But it's not being used for its activity against the virus — it's used as a booster for the other drugs."

While Abbott vigorously denies it, Shalit and others believe the Norvir price increase was aimed at Abbott's competition. In essence, Shalit said, increasing Norvir's price raises the cost of taking Abbott's competitors' drugs used in combination therapy. That could push patients toward Abbott's newer drug, Kaletra, a combination drug with Norvir built in. With the Norvir price increase, Kaletra's competition has become more expensive than Kaletra, approved by the Food and Drug Administration in 2000.

In their letter to Abbott, the local doctors also expressed worry that the increased cost of Norvir would have a chilling effect on development of other drugs designed to work with its boosting power; at least one such drug is now being tested in Germany.

Shalit and some other local doctors said they're now going to try to get patients off the Norvir-boosted regimens, if they can do it without compromising their patients' health. "In most cases, I can't get people off it, but I can reduce doses," Shalit said.

Widowitz, who was taking 12 pills of Norvir daily, switched a few weeks ago to another regimen that requires only one dose a day.

Is it working? "I don't know," he said. "It's too early to tell."

Doctors and pharmacists say HIV/AIDS drug therapies are very individualized — what works for one person may not for another, and some tolerate side effects of one drug but not another. So finding a combination that works therapeutically and is also tolerable is sometimes difficult — in some patients, impossible.

Widowitz says he trusts Shalit implicitly. But he knows firsthand how tricky medications can be for someone with AIDS. It took him about a year to get used to Norvir, he said, and it was difficult to tolerate its side effects.

Still, he did it, and the drug kept him alive. "A lot of people weren't able to do it," said Widowitz, who keeps a file folder of obituaries done on friends. "Some people couldn't find anything, and they just died."

Widowitz says he's lucky because his private insurance, which now costs $875 per month, will cover the drug. But he worries that the huge price increase will affect premiums, already steeply escalating. Unlike some of his friends, he has an insurance policy — no longer sold — that doesn't require him to pay a percentage of drug costs once he has paid his deductible.

"There are people way worse off than me," says Widowitz, 59, a former computer-project manager. "They're really going to be hurt."

Forte, the pharmacist, said he was bewildered by the company's actions.

"I know there is capitalism and free enterprise and all that — everybody has a right to make a profit — but isn't this like during a national disaster charging $20 for a gallon of water or something?"

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com

Copyright © 2004 The Seattle Times Company

[steve50]

Now we know why the African Aids problem is getting $15 billion of taxpayers money thrown at it.

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[Doctor Stochastic]

Other drugs (synthyroid, for example) have also gone up in price the last few years. The non-PCS prices for the (drugs I started 20 years ago) have increased substantially, just faster than college tuition.

[Ken522]

Price of AIDS drug soars fivefold

Now who's to blame for this?? Let's see - the drug company should be wholly responsible because the company is making OBSCENE profits ... never mind that without the drug companies, there would be no drugs to complain about and the AIDS carriers would just have to suffer in silence. Sheeze!

[FITZ]

Yes --- and that's where the $15 billion being thrown at Africa is going to end up --- once government money is involved, prices go up.

[captnorb]

Think of all those dollars going to real research...the cure for cancer, diabeties, heart disease.....Ah yes; we can't take money away from an "emotional" issue like a totally preventable problem which is self made for most.

You want to play....You got to pay!

[thoughtomator]

Wow... for that $665 every month - the OLD price - you could insure someone who is uninsured for a year. There's not a country on the planet that can afford to pay this much for AIDS symptom management.

[steve50]

You want to play....You got to pay!

Want implies an option not to play. Since it's taxdollars that are funding this African payoff "want" doesn't enter into it, you are forced to pay for drugs for foreign citizens.

[NYFriend]

The thing that everyone is forgetting is that the market isn't really in effect here. Most of these drugs are bought by governments (state or federal or both) and not by people. The government can't refuse to buy them, because in most cases they are required by law to do so. They have the power to change those laws, but can't (as we all know) for political reasons. That way, there is no upper limit in the on drug prices, unless the government imposes them. individual consumers impose those upper limits collectively, by reduce the amount they are will to buy at a given price. It doesn't work for government payers. Since the government has to tax that money out of us, we should be upset about this and we should permit our government to intervene in the drug companies business practices.

[Steve_Seattle]

"A daily dose of 12 pills used to cost about $20, Cassidy said. Now, even with the higher cost per pill, a typical daily dose of one pill costs about $8.50, and a daily dose of two pills about $17. "It's well below what most protease inhibitors are priced at; it's the lowest-priced protease inhibitor, even with the price increase."

Ok, so buried deep in the article, the truth comes out: because of the way the drug is now administered, the daily dose has gone down from 12 pills to one or two, and a typical patient is now paying $3-12 LESS per day for the drug than before, despite the price increase.

[nightdriver]

The drug companies have said that since the government was thinking about passing a drug entitlement bill, the price would double. They also promised that if the bill ever passed (which it did) the price would at least double again, so there's the reason.

The problem is the government, not the drug companies. We all now have to compete with the government now that it is a quasi-consumer now.

[nightdriver]

The drug companies have said that since the government was thinking about passing a drug entitlement bill, the price would double. They also promised that if the bill ever passed (which it did) the price would at least double again, so there's the reason.

The problem is the government, not the drug companies. We all have to compete with the government now that it is a quasi-consumer.

[nightdriver]

Sorry for the double post. Need coffee.

[freedomcrusader]

Yep, I noticed the same thing. The truth is buried way down in the article amongst hyperbole and accusations.

[Porterville]

It would break my heart to have a five fold increase in something as critical as pharmaceuticals.... it is pretty unethical, if the drug companies want to make a good name for themselves and keep people from finding alternative sources across the border or knockoff drugs in Brazil, they are certainly going about it the wrong way.

[sharktrager]

Actually, the drug companies have regularly scheduled price increases, and have for years. The way the wholesalers make money is because the price they charge is based on the current price listed by the manufacturer. They buy before the price goes up, and then charge a price based on what it would cost if they bought it today.

This is true for virtually all non-generic drugs. Where the real problem comes in is for the pharmacies and hospitals. The insurance companies seem to conveniently delay the increase in reimbursement, or increase reimbursements less than prices went up. The pharmacies can't exactly afford to refuse to accept the insurance, so they are stuck with it.

The large hospital groups and major chains have the clout to keep reimbursements in-line. The smaller operators don't.

[camas]

i wonder if this will slow down the "bug chasers"????

[Atlas Sneezed]

How has the price of condoms changed during the period these guys infected themselves?

[Indrid Cold]

Insure them for what? Not health. For my (healthy) family of 4 it's over $600 per month. I suppose I could get a better rate by getting a $10,000 deductible or going a plan that only covers catastrophic...