HEALTH NEWS

Critics decry escalating HIV/AIDS drug prices
Drug companies cite research costs as driving up expenses

RYAN LEE
Friday, January 16, 2004

Living with HIV since 1985, Atlanta resident Hugh Joiner developed a hazardous pattern with the drugs he took to fight the disease.

Joiner would start a drug regimen and experience temporary improvement, but within 12 to 18 months he developed a resistance to the drug combination, rendering the medications useless.

He would start a new regimen, and within 12 to 18 months, a new resistance would form.

But at the end of the long line of drugs that no longer worked for him, Joiner found hope.

In 2003, Joiner’s doctor encouraged him to join a trial for a new drug called Fuzeon — a first-of-its-kind drug designed for people who found no relief in other anti-HIV drugs.

“The drug, for me, has made all the difference in the world,” Joiner said. “It’s just been a godsend.”

Fuzeon, which requires an injection two times per day, even helped Joiner get over his fear of needles, though he was disappointed to learn that F. Hoffmann-La Roche and Trimeris Inc. — Fuzeon’s manufacturer — recently postponed trials that would have produced a similar drug that required as little as one shot per week.

Since he began taking Fuzeon, which stops HIV from entering healthy cells, Joiner said he has more energy, his T-cells have increased from two to 59 and his viral load has dropped considerably.

But with the end of his trial approaching, Joiner said he is uncertain how he will be able to afford Fuzeon, priced at nearly $20,000 for an annual supply.

“The cost is what’s the problem,” Joiner said. “I would try to stay on it, but I just don’t know if I could afford it.

“Those who can afford it will get it, those who cannot will do without,” he said. “I know that’s a cruel thing to say, but so goes life.”

Smoke and mirrors?
When asked why he thinks Fuzeon costs so much, Joiner gives a popular answer.

“They say because it’s so hard to make,” Joiner said of Roche’s justification. “From my understanding it’s just because of the technology and the difficulty in producing the drug.”

Pharmaceutical companies have repeatedly argued that the amount of research and development invested in anti-HIV drugs requires high prices.

“It’s allowing us to make investments in future innovations — novel therapies, drugs with less side effects — and to bring those to market so patients have access to more and better medicine,” said Heather Mason, vice president, specialty operations pharmaceutical products for Abbott Laboratories.

But critics say the R&D argument is bogus.

“The companies for years have done some real smoke and mirrors, as if there is some kind of secret formula for setting prices,” said Dr. Howard Grossman, a longtime AIDS activist with a private practice in New York City. “They’ve never really proven exactly how they set the price of drugs, and given they’ve bought most of Congress, they’ve never been forced to.”

Clint Trout, associate director of federal and international policy at the AIDS Healthcare Foundation, said market forces — including competitor pricing and government regulation — influence how companies price drugs “100 percent of the time.”

“R&D really doesn’t have that much influence on the price,” Trout said. “But high prices are necessary for all the consumer marketing the drug companies do — they send a drug rep to our clinics every five minutes trying to get them to prescribe their drugs to patients.”

As an example of how drug companies have been exaggerating the role R&D costs play in drug prices, critics point to a recent announcement by Abbott that it was raising the price of Norvir — a protease inhibitor that has been available since 1996 — by more than 400 percent.

“There is absolutely no reason but corporate greed for the Norvir price increase,” Trout said. “It’s really inexcusable what Abbott has done.”

Because Norvir plays a booster role in drug cocktails containing drugs manufactured by Abbott’s competitors, there has been widespread belief that the company raised Norvir’s price to steer patients to its more expensive drug, Kaletra.

Norvir used to cost $54.25 for a month’s supply, but now costs $265.67 for the same amount.

Norvir is often used with GlaxoSmithKline’s Lexiva — which costs $480 per month’s supply — meaning the cost of that combination increased from $534 per month, to $745. The old price of a combination containing Norvir and Bristol-Myers Squibb’s Reyataz was $738, but with Norvir’s price increase now costs $949.

Abbott’s Kaletra — which competes with Lexiva and Reyataz — has Norvir built into it, and is unaffected by the price increase. It is sold at $580 per month’s supply.

Still, Mason contends Norvir’s price hike was triggered by R&D costs.

“We did not make this pricing decision lightly,” Mason said. “We carefully considered many things, and ultimately our very complex decision process allowed us to reach this difficult conclusion that this new price is necessary to be able to support our ability to continue research to bring the next generation of HIV medications to market.”

In their complex decision process, Abbott officials never considered that Kaletra would benefit from Norvir’s price increase, Mason said.

Grossman scoffed at such explanations. “It’s all about their market position,” he charged. “This is as anti-patient a move as I have ever seen.

“Their feeling is Kaletra is the best, strongest drug, and it should be the first, last and only drug used by HIV patients,” he said. “They don’t understand why that hasn’t happened, and instead of lowering Kaletra’s price, they’ve raised everybody else’s.”

As for Fuzeon’s $20,000 price tag, Trout said he believes it is a test case for pharmaceutical companies to see how much they can charge.

What is most troubling to some activists is that in addition to inflating drug prices, the pharmaceutical companies relentlessly fight any efforts to cut into their large profit margins — even at the expense of those needing medications.

“Everybody recognizes that their bottom line is about profit making,” said Rachel Cohen, U.S. director of Campaign for Access to Essential Medicines for Doctors Without Borders, an activist group that focuses on diseases in Third World countries. “The pharmaceutical companies are actively promoting policies that would delay development of generic drugs in developing countries, which significantly limits access to treatment.”

HIV drugs used to cost the same amount in Africa as they did in the United States, until countries like India began developing generic drugs, a move fiercely opposed by brand-name drug companies. Whereas an annual HIV regimen was costing people $16,000-$18,000, some generic regimens are now available for as low as $140 annually, Cohen said.

Both generic and brand-name manufacturers still generate a profit in Africa, despite the cheap prices — further proof, Cohen said, that companies can easily recoup R&D costs without high prices.

Mason, from Abbott, said her company has been fulfilling its duties in Africa and other developing areas.

“When you’re in the pharmaceutical business, you have patient assistance programs, and you ensure patients in need get the medicine when they can’t afford it — that’s part of what we do,” she said. “But the plight of HIV in the Third World is just not the responsibility of pharmaceutical companies, it is the responsibility of this world to care for this.”

Drug companies also flex their muscle domestically, spending $105.7 million lobbying U.S. politicians since 1990, including $29 million in 2002 — 75 percent of which went to Republicans — according to the Center for Responsive Politics.

“There is no way you can overstate their influence in politics,” said Trout. “I would say in Washington they are the most powerful lobby, and very few politicians will cross drug companies.”

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