C O M M U N I T Y A L E R T -- D R U G P R I C I N G

Spare the Protease but Keep the Price?

Please consider having your organization sign onto the attached Consensus Statement. It concerns the eventual price of two new potent drugs: the nucleoside analog abacavir (Ziagen) and the nNRTI efavirenz (Sustiva). Both of these compounds are under FDA review and no doubt will soon enter the market. There has been considerable speculation that either or both will be priced far higher than other nukes and nNRTIs, perhaps even in the range of the protease inhibitors that they would supplement or sometimes replace. Such a move would substantially increase the cost of health care for a great number of people with HIV. The ability of public programs such as ADAP and Medicaid to support HIV treatment would be further limited, and even private HMOs may object to prescribing these new drugs. We need to send a loud, clear and united message immediately before final pricing decisions are made by the sponsors, Dupont Pharma and Glaxo Wellcome.

We hope that this statement becomes the first step in a wider campaign over the cost of HIV treatments to be directed at all sponsors. Some companies in the past year have quietly raised prices on drugs that already bore high price tags, without strong protest from the HIV-affected community. There is no justification for these increases other than "what the market will bear." But as combination regimens become ever more elaborate, people with HIV as well as their third-party payers will likely face medical costs over the course of a lifetime rising into the stratosphere. The pharmaceutical industry, meanwhile, stands to reap a windfall. Companies have less justification for squeezing high short-term profits from their drugs since people will be using them for longer periods of time. Make no mistake about it -- each unfair pricing action cuts off the lifeline of treatment for another portion of the population!

Please join with us in putting this urgent issue on the front burner of AIDS activism and support our efforts by asking your agency or organization to sign-on to the attached consensus statement now. Also, please watch for further communiquÈs on this important issue.

Time is of the essence! To endorse the attached consensus statement, please reply ASAP to::

fax: 310/471-4565

e-mail: Linda_Grinberg@prodigy.com



Martin Delaney, Project Inform; Dave Gilden, GMHC/Gay Men's Health Crisis; Ron Baker, San Francisco AIDS Foundation; Linda Grinberg, FAIR/Foundation for AIDS & Immune Research; Bill Bahlman, ACT UP New York; John James, AIDS Treatment News

Consensus Statement on the Pricing of Abacavir and Efavirenz

We, the undersigned, have grave concerns regarding the overall cost of therapy for HIV disease. While we are heartened by the progress made in moving toward simpler, easier to use regimens, we are dismayed by the possibility that prices of new drugs in the nucleoside and non-nucleoside RT inhibitor class might be similar to those of protease inhibitors, rather than other drugs in their own respective classes. Such inappropriate pricing will quickly outweigh any possible added benefits of new drugs like (Ziagen) and efavirenz (Sustiva). As drugs become available which might facilitate better adherence and possibly more durable long-term treatment, manufacturers should be planning to lower the daily cost of their regimens, not increase them. The long-term survival afforded by the present generation of therapies makes it possible for manufacturers to set lower, or at lest stable prices, and still have adequate incentive to reinvest in continued development of HIV/AIDS drugs. Recently cited reductions in the overall cost of health care for HIV infected people will almost certainly be reversed in coming years if manufacturers continue to increase or maintain current pricing levels.

We are in a new era in the treatment of HIV disease and rethinking drug pricing which reflects this changing reality is long overdue.

To the best of our knowledge, the development costs of these drugs were not comparable to those of the first protease inhibitors, nor is on-going cost of product as high. Quite the contrary, because of the efficiency of the new drugs, far fewer pills and thus much less physical product is required for dosing on a daily basis. Similarly, there has been nothing extraordinary about the cost of clinical trials required to bring these drugs to market.

Abacavir and efavirenz are likely to be used by both treatment naive and treatment experienced patient populations, making their potential market very large. If the prices are high and either or both drugs used in naive populations in place of existing drugs, the overall cost of therapy will go up. An even greater cost penalty will occur for treatment experienced patients, who are likely to use both drugs together, often in combination with a protease inhibitor. This would lead to an unacceptably high cost of therapy. We cannot stand idly by while the price of living with HIV disease escalates so rapidly.

State ADAP programs have limited amounts of money allocated to them each year. Many of the state's annualized programs are bankrupt prior to fiscal year-end. Some state ADAP and Medicaid programs have removed vital medications to prevent and treat opportunistic infections from their formularies. State ADAP and Medicaid programs are under close scrutiny by governmental panels in order to cut costs.

The price of one drug can affect the availability of other medications. Increasingly, this same sad scenario is beginning to affect the availability of drugs within HMO settings. The price of these drugs will have a pervasive impact on the overall quality of care people with HIV/AIDS receive in this country.

The sponsors of abacavir and efavirenz have both expressed a strong desire to create goodwill and cooperative working relationships with the community. No one wants to see those relationships jeopardized or eroded over this issue, but that surely will happen if pricing is inappropriate. As we face another round of price setting, industry must recognize this is an issue that is now moving to the forefront. Exploitative pricing will trigger widespread hostility, contentious debate and closer scrutiny of industry practices in general. This will have far reaching consequences. Have DuPont Pharma and Glaxo Wellcome considered the possible repercussions of opening this Pandoraís box? Are you willing to risk the aftermath of ill will within the community and to be held accountable within industry?

Therefore, we must clearly state for the record that the only acceptable prices for these drugs must be in accordance with other drugs of their respective classes. (*See amended consensus statement attached as Addendum.) We urge manufacturers to immediately begin a dialogue with the community about this pricing issue and not presume it can simply announce a price immediately prior to regulatory approval, without consequences, as a fait accompli.


____________________________________ ________________________________

Signature ___________ Name of Organization (print legibly)



ACT UP/NY could not sign on to a statement
that labeled a price of $3,100 a year as "acceptable."
We changed one sentence wording:

"These drugs must be priced no higher, and preferrably much lower, than drugs of their respective classes."




September 9, 1998


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