Pricing of New HIV Drug Threatens Access to Treatment -- Sign-On Request
September 27, 2007
Dear fellow activists, organizations and concerned individuals.
A new HIV drug produced by Merck is about to be approved by the Food & Drug Administration in early October. While this is great news, especially for people who have developed resistance to existing therapies, the pricing of this treatment will have a major impact on the various publicly funded programs like Medicaid, Medicare, and the AIDS Drug Assistance Program, all of which are already straining at the breaking point.
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Fair Pricing Coalition Statement to Merck
Medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.
George W. Merck, 1950 Address to the Medical College of Virginia
Early in October of 2007, we will see the approval of Merck's new integrase inhibitor, Isentress(r), a drug many believe is among the most potent and least toxic yet developed for HIV. It has been proven to be highly active even in people who have developed resistance to three previous classes of drugs. It comes at a most welcome time, following the approval of three other new drugs and shortly before a fourth that is likely to be approved in early 2008. The availability of Isentress and four other new drugs at roughly the same time offers perhaps the greatest hope yet of a normal lifespan for people with HIV. We the undersigned have joined together to urge the people who are Merck to complete this remarkable story by pricing this drug with genuine sensitivity to the needs of HIV+ people and with due recognition of the fragile public health financing system so many depend upon.
Merck has long demonstrated an outstanding commitment to fighting AIDS as well as a sensitive understanding of how pricing affects access to treatment. We recognize the claims that Merck has spent more than a billion dollars researching drugs and vaccines for HIV over the last 20 years. We remember how, at the beginning of the protease inhibitor era, Merck announced a price for Crixivan that was approximately $2000 a year less than its two competitors. And recently, Merck announced a substantial reduction in the price of Stocrin, its internationally sold version of Sustiva (sold in the US by Bristol-Myers Squibb, with no reduction in price). Surely, Merck's history is that of a true friend of people with HIV and a responsible corporate citizen who shares our concerns with the cost of health care.
Still, we have concerns about the potential pricing of Isentress. We are excited about this drug and of course, we recognize that Merck must recover its costs and ultimately make a profit. We understand the nature of business and the interests of stockholders. The question is how will Merck balance the needs of people with HIV, the limitations of the payers, and the interests of its stockholders? We suspect that there may even be special economic pressures, given some of the turmoil the company has faced in recent years. But these factors in no way change the pressures experienced by people with HIV/AIDS and by payers, both governmental and private. We urge, in the strongest terms possible, that Merck price this drug responsibly and not based on industry averages or what the market will bear.
The Fair Pricing Coalition has met a number of times with Merck and all these issues have long been on the table. Some factors, however, have changed since these discussions began. Of greatest concern is the state of public health financing, including Medicare, Medicaid, and the Ryan White Program. Appetites for large increases to the fixed discretionary Ryan White Program are long over; cities, states, and clinics are expected to do far more with much less. Moreover, Medicare and Medicaid, entitlement programs that are impossible to sustain and finance as currently structured, are consistently scrutinized for new potential cost-savings. Access to these programs in no way shields eligible patients from burdensome cost-sharing. Medicare Part D beneficiaries, ineligible for subsidies, face significant cost-sharing based on the price of a drug. Any argument that patients in public health programs are unaffected by the market price of these drugs would be inaccurate. Furthermore, a significant percentage of the HIV-infected population has inadequate health care coverage (such as limited prescription drug coverage) while others are not poor enough to qualify for publicly funded systems. Drug prices certainly affect these under-insured or uninsured patients as well.
As a demonstration of his determination to rein in discretionary spending, President Bush in 2007 issued veto threats on most of the appropriations bills with planned increases, most notably the health bill that would fund any potential increases to Ryan White and other HIV programs. Pressure is on federal and state budgets as never before to reduce spending and increase savings in health care. This pinch will all but certainly be magnified for people with HIV, over two-thirds of whom do not have private health insurance or no health coverage at all.
These would be difficult challenges under any circumstances, but they are today compounded by the massive national debt that has accumulated in the last 7 years. Additionally, there is widespread concern about the possibility of economic recession. Regardless of who is in charge politically, the ability to pay for these programs will likely be limited for many years to come. Yet, the cost of health care and the cost of prescription drugs continue to rise unabated. We know this is not the future envisioned by George Merck.
While Merck has given us a general sense that Isentress will be priced in the range of popular protease inhibitors, this is a wide range and it does not tell the whole story. When people use Isentress, it will come with a strong warning to not waste the opportunity presented by the drug. They will be told to combine it with two additional new drugs if at all possible to maximize the chances of long term success. All of those "other" new drugs are also expensive and there is no guarantee that physicians will feel confident enough to eliminate some of the other drugs the patient already uses. In the case of an important treatment like Fuzeon, the cost of a single added drug can be in excess of $20,000 year. Thus, when considering the price of Isentress, we must also consider what other drugs will need to be added to give it the greatest chance to succeed. This leads to one simple question: where will the money come from? We must be concerned with the cost of the entire regimen of expensive drugs which must be combined to achieve lasting success.
It will not be enough for Merck to set a price "no higher" than popular protease inhibitors. Unfortunately, the price of this class of drugs has suffered a severe escalation over the last several years and had yet another unconscionable increase when Aptivus was approved in 2006. We will not be able to sit idly by and say "it's okay" if Merck's price for Isentress merely is no worse than the already too high price of other recent drugs. They are all grossly overpriced. It makes no sense that protease inhibitors which could be sold profitably for less than $5000 a year in 1996, when producing them required the building of new factories and processes, now just ten years later range in price from $10,000 to over $13,000 a year. The cost of production is, if anything, lower today, and no measure of cost of living adjustments can account for such an increase. If Merck wishes to be a responsible corporate citizen, it cannot use overpriced drugs for comparison in setting the price of Isentress.
Every indication is that Isentress will be a highly successful product. It has proven ability to rescue people who have developed the worst resistance to existing drugs. It is already showing advantages over some of the most popular current drugs used in treatment naïve patients and those who have failed only a single drug class. It appears to have none of the metabolic side effects that are routinely experienced with even the best of previously available drugs. And it has generated waves of excitement over potential new combinations and treatment paradigms when used with some of the other new compounds. Though no one can predict the future, no other drug today or in the pipeline has shown such promise and potential. Merck will succeed handily at almost any reasonable price point. It does not need to charge an immorally high price just because others are doing so.
Thus, we must demand that Merck live up to its charter and its promises of being a socially responsible drug company. It must set a price that offers a reasonable profit without worsening the economic problems faced by patients and payers. It must demonstrate what leadership means in the pharmaceutical industry and set an example for others. Any price higher than the midpoint of the leading protease inhibitors will be seen as exploitive. A price at the low end of this class (or below) will be publicly heralded as evidence that at least one pharmaceutical company puts people ahead of profits. The upward spiral of drug prices must stop somewhere. This is the time. This is the place. And Merck is the company.
This article was provided by Fair Pricing Coalition. Visit FPC's website to find out more about their activities and publications.