The Looming Crisis in Drug Pricing

"By any measure, the present system of paying for expensive anti-HIV therapies is on the verge of collapse. The AIDS Drug Assistance Program (ADAP) is failing to meet needs in many states, leading to lengthy waiting lists and reduced coverage. Nor can Medicaid keep up. Even people with private insurance programs are affected. ...Every year, more and more people are priced out of the market for insurance and forced into the government programs, again increasing the demand on those programs.

"...Certainly, the increased number of people seeking treatment puts growing pressure on all payer programs. But there is simply nothing that can be done about that, other than to create better prevention programs, a vaccine or a real cure. In contrast, the upward spiral of drug prices is both unnecessary and something we should be able to change.

"...In the last round of Federal negotiations over the ADAP program, the final amount agreed to by Congress and the Administration fell far short of what was needed just to keep up with the growing demand. To make matters worse -- far worse -- almost all of the pharmaceutical companies announced, without warning, sudden price increases in late 2001 and early 2002. As a consequence, roughly half the amount of new money allotted was consumed by price increases, further diminishing the number of people served. ...[A] similar scenario almost certainly occurred for the Medicaid program.

"...There is no economic justification for constantly increasing prices. ...Not only are AIDS drugs already among the highest priced, but such drugs are used for a lifetime. Each new drug is a new and virtually permanent profit stream for industry and its stockholders.

"...It must stop. ...Surely there must be room for a compromise that places a higher value on human life. After years of quiet acceptance, the HIV community is rising up against drug pricing, just as it did in the early years of the epidemic.

"In the last few weeks, one company, Pfizer, announced a 'two year price hold' on prices for ADAP programs, while another, Bristol Meyers Squibb announced a one year hold. ...Unless guarantees are built in that prevent them from simply postponing a large leap in prices until the end of the 'hold,' such offers are meaningless.

"...The HIV community must unite.... There is perhaps no more critical domestic battle around HIV than the fight to stabilize, if not reduce prices. Without it, our entire system of paying for medical care for people with HIV is in jeopardy, brought about by the companies that already profit most from the disease."

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