September 21, 2007
DRUG PRICING GETS MERCK-Y
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Ask Merck to remember company history and social mission when pricing Isentress |
Longtime treatment activist Martin Delaney told the Update this week that Isentress, Merck's new integrase inhibitor "could be the best drug we've ever had for HIV." But he and other leading treatment advocates want to make sure that Isentress's iPhone-level hype isn't accompanied by iPhone-level price-gauging.
The data shows the new drug could be a great option for many PLWHAs who are resistant to other forms of treatment— studies show Isentress gets HIV levels undetectable in up to 62 percent of those tested (compared to fewer than 36 percent of those who received a placebo plus other drugs). But the potential cost of this add-on drug, expected to be approved by the FDA next month, could add-on to the already ridiculously expensive cost of HIV/AIDS care. AIDS advocates worry that sky-high pricing could cause a meltdown in publicly-funded health care programs that are already stretched to the limit, including Medicare, Medicaid, and particularly Ryan White and ADAP.
"We're concerned for the simple reason that this appears to be a really, really good drug. Once this drug is approved it could be the HIV/AIDS equivalent of a stampede," said Bill Arnold, at the Title II Community AIDS National Network. "We want to make sure the pricing is not disruptive to very strained and limited funding streams."
But AIDS advocates aren't the only ones who want a seat at the table. Even though, compared to its competitors, Merck has a history of "underpricing," shareholders and their dividends are still the largest concerns of any public company in a capitalist system. "Drug companies are under a lot of pressure from their shareholders to make money, make money, make money," said Lynda Dee, executive director of AIDS Action Baltimore. "Given that it's new, better, and all that marketing crapola, they could charge a fortune."
Assessing the reasonability of any particular drug's price compared to its competitors is difficult. The Wholesale Acquisition Cost (WAC)— the stated price of a drug— is reduced by 25 percent for Medicaid, Medicare and ADAP payers, and is reduced significantly for most private insurers. Also, because HIV/AIDS drugs are almost all part of a cocktail of treatments, it's impossible to assess the cost of one drug without taking into account the drugs that need to be included in an effective regimen. Looking at all of those variables, advocates say Isentress shouldn't be priced above about $10,000 a year.
The Fair Pricing Coalition, which includes veteran leaders like Delaney, Dee and Arnold, is seeking organizational and individual support for a diplomatically-worded letter to Merck , asking the company to price Isentress towards the low end of protease inhibitors produced by its competitors and to "remember its 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."
"Merck's normally been better about pricing and spent more on AIDS research than its competitors," Delaney said. For example, at the start of the protease inhibitor era, Merck priced Crixivan at about $2,000 a year less than leading competitors. "This letter is appealing to their better side, saying, 'You flatter yourselves that you're being good guys. Well, show us you are.' We'll see if it works." Delaney said he talks to Merck's representatives almost daily, and every day their internal estimate of the initial price heads down a bit.
"Merck needs to feel a lot of public pressure and support," Delaney said. "We'll sing their praises if they bring the prices down -- and scream our heads off if they don't."
To lend your organizational or individual support to the letter asking for fair pricing of Isentress, e-mail Paul Dalton at Project Inform (pdalton@projectinform.org) today!