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Past Issues
Volume 17, number 11
November 2003
Through the Roof
The issues behind drug pricing
One for the Blipper
Viral load and replication — where's the link?
ATAC Meets FDA
Warm and fuzzy in Rockville
Some Things Never Change
Carlton Hogan on demanding post-marketing monitoring of drug safety
Paying for Life
The Issues Behind Drug Pricing
By Bob Huff
Most people today appreciate the value of antiretroviral therapy, if not
its price. This is because the price of expensive anti-HIV medications in
the U.S. is largely, and thankfully, invisible. Although uninsured or
underinsured people with HIV may have to pay for their drugs out of pocket,
the cost of pharmaceuticals for most HIV positive Americans is borne by
private insurance or by the government through Medicaid or a state AIDS Drug
Assistance Program (ADAP). Copayments collected by the pharmacy — which
can be a significant burden in themselves — are as close as many people
get to the byzantine world of prescription drug pricing.
The happy fact is that thousands of people are alive today because
of better medications and generous access that came about during
the strong economy of the 1990s. But with Congress feeling less
charitable these days, the trouble signs are clear. Increasingly,
it seems that if the political will to pay the price of quality
health care does not soon find a powerful voice, the combination
of shrinking funding and runaway drug costs could put the health
of large numbers of people in this country at risk. Already, historic
— and possibly catastrophic — changes to Medicare and
Medicaid are being decided, all driven by the unbearable cost of
medications. Yet none of the proposed solutions attack the underlying
problem. The implications for those with HIV are considerable, since
drugs are generally the biggest contributor to the price of their
continued health.
The Increasing Cost of U.S. Health Care
The U.S. is one of the only wealthy nations without universal health care or
government limits on the price of prescription drugs, and American health care
costs continue to spiral upward, with pharmaceuticals leading the way. Even
though most consumers do not bear the cost of their drugs directly, rising
prices affect the cost and quality of care for nearly everyone in the U.S.
by way of increased insurance premiums, larger copayment amounts, and cuts
in publicly-funded programs such as ADAP. As state governments explore ways
to control costs, the powerful pharmaceutical industry is fighting to preserve
the freedom to set prices without restraint in their largest and most profitable
market in the world.
The drug industry has become addicted to revenue growth, which it tries to
sustain in every possible way. Continually raising prices has been the central
strategy, and U.S. prices have increased at more than double the rate of inflation
every year for over ten years. Due to regulation, prices can't grow that fast
anywhere else in the world, so the burden disproportionately falls on the U.S.,
which now accounts for over half of the world's pharmaceutical sales. Increasing
the volume of drug sales has been the other main engine for the industry's growth
over the past decade, and since the advent of direct to consumer advertising in
1997, more U.S. customers than ever have begun demanding drugs for the ailments
they see on television. Another profitable strategy has been to switch consumers
from older, cheaper drugs to more expensive ones. Marketing is crucial to get
doctors to switch patients to “new and improved” versions of drugs that mainly
exist to push profits up a notch. Yet there are limits to how far this can be
taken. Expenses for sales can be double what a company spends on scientific
research, and increased spending for marketing in turn drives the demand for
revenue growth. Lately, growth has been obtained by the consolidation of smaller
firms into pharma powerhouses, but while these mergers may result in some cost
efficiencies, the effect on the bottom line is short lived — and the effect on
the creative output of the research departments has been disastrous. Growth
arising from true innovation by the pharma giants is becoming increasingly rare.
Meanwhile, government entitlement programs dig deeper and cut services to pay
for drugs, and private insurance premiums have become all but unaffordable for
anyone without coverage through a well-paying, full-time job. In today's economy,
with unemployment high and many small businesses unable to meet the burden of
escalating premiums, one in four Americans lack health insurance, and their
ranks are growing.
Sorry, You're not on the List
Over the past couple of years state governments have begun to fight runaway drug
costs by attacking the problem on two fronts. First, there has been an attempt to
limit utilization by requiring doctors to obtain prior authorization for expensive
drugs that are not included on a state-approved formulary list. In practice, the
hurdle of seeking approval to prescribe certain drugs means that doctors often
select a similar, cheaper substitute. Problems arise when patients are told at
the pharmacy that their prescription cannot be filled because it is not on the
list; many are likely to give up and go untreated. This sort of manipulation
— along with the political red meat issue of cracking down on waste and
fraud — may produce some small savings, but in reality, people with
complex chronic diseases risk having their care compromised by these restrictive
rules. Certainly any effort to cut utilization of anti-HIV medications would be
met with anger and outrage.
On the price front, some states such as Michigan and Maine have been trying
to win discounts from pharmaceutical manufacturers in exchange for adding their
drugs to the approved Medicaid formulary, thus removing the barrier to prescribing.
This is a powerful stick to wield, since drug companies are loath to yield any market
share to their competitors. The pharmaceutical industry deplores this tactic and has
fought back with courtroom challenges, sophisticated public relations campaigns,
and drug giveaways via company-run disease management programs aimed at Medicaid
patients. In Florida, the pharmaceutical lobby prevailed on Governor Jeb Bush to
water down state formulary restrictions by allowing drug companies to offer case
management of "high utilizers" instead of discounts. But the industry recently
suffered a setback when the Supreme Court decided to allow a program to go forward
in Maine that seeks additional rebates for its Medicaid drug purchases. Companies
that don't comply will see their products parked on a prior authorization list.
At the federal level, a proposed drug benefit for Medicare beneficiaries has
emerged in Congress that many say will provide a windfall for the pharmaceutical
industry by dramatically expanding their markets without challenging the current
pricing structure.
Why Is Price a Problem?
High prices can become a problem when a drug is available only as a brand-name
product from a single manufacturer, as is the case with antiretrovirals in the
U.S. Every approved anti-HIV drug sold in this country is still under patent
protection. A patent guarantees the holder an exclusive right to market the
protected product without competition for a period of at least 20 years. After
the patent protection period has expired, other manufacturers are free to produce
a nonbranded, generic version and sell it at a fraction of the price of the
branded drug. In the pharmaceutical business, a good example is the case of
fluoxetine (Prozac), which sold for $2.50 per pill until its patent ended in
2001 and a generic manufacturer brought its version to market for only $0.25
apiece.
The first anti-HIV drug expected to lose U.S. patent protection is AZT
(zidovudine, Retrovir), which could become available generically in the U.S.
sometime after 2005. Since most people who use AZT these days take it with
3TC (lamivudine, Epivir) in the form of Combivir, generic AZT is unlikely to
have much impact in this country.
Several generic antiretrovirals are now produced in countries such as India
and Brazil and these are promising to help to make treatment a possibility for
millions of people who could never hope to afford expensive branded medications.
One of the ironies of the marketplace is that some generic makers are now
producing practical and convenient all-in-one formulations of individual drugs
controlled by different patent holders. One such product, Triomune, is a combination
of nevirapine, d4T and 3TC. Such drugs may be available for pennies a day in the
developing world, but are unavailable in the U.S. A recent announcement by the
Clinton Foundation indicates that manufacturing deals have been struck to bring
the monthly cost of treatment to under $20 per person per month — 40 to 80
times less than in the States. Although generics have not directly affected
the cost of anti-HIV drugs in the U.S., the dramatic gap in prices, separated
only by FedEx and U.S. Customs, is making the industry exceedingly nervous.
Historically, when a generic equivalent enters the market, the profit
potential of the original branded drug virtually vanishes. The price of
the generic is set at some margin above the cost of materials, manufacturing,
and distribution, and the maker of the branded drug must lower its price
or give up the market. The prices of generic equivalents can be set so low
because their makers typically invest little or nothing in
drug discovery, clinical research, and marketing.
Major pharmaceutical manufacturers argue that the significant cost of
bringing new drugs to market justifies the high prices they charge. Furthermore,
since the window of premium pricing is limited by a product's patent life —
a good portion of which is used up during the approval process — all of
a drug's research and development costs must be recouped within a relatively
short period of time. Finally, since drug development is far from a sure thing,
successful drugs are called upon to pay for any number of past and future failures.
Critics of exorbitant drug prices point out that the pharmaceutical business,
despite its complaints, remains one of the world's most profitable industries,
and that development costs are overstated and often subsidized by government.
Corporate reports clearly show that R&D expenses typically run at a fraction of
what is spent on marketing and reserved for profit. Drug pricing, critics say,
is driven by greed and by the monopoly protection allowed by patents. The true
cost of high drug prices, they say, is measured in lives lost.
But the generic price advantage may not be a reliable long-term solution to
the current drug cost crunch. Consolidations among generic manufacturers are reducing
competition, and generic manufacturers — seeing the gap between their prices
and those of branded products as a wasted opportunity — recently have begun
raising the sticker price on their knockoffs, thus further intensifying the squeeze
on state and federal drug budgets.
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Risky Business: The Case of T-20
Although the pharmaceutical industry has remained profitable despite
the tough economic climate of the past few years, the costs and risks
associated with identifying and shepherding a new anti-HIV drug to market
are considerable.
The first of a new class of HIV drugs called entry inhibitors brought the
issue of pricing to center stage earlier this year. T-20 (enfuvirtide, Fuzeon),
discovered by Trimeris and developed and marketed in partnership with Hoffmann-La
Roche, entered the market in March 2003 as the most expensive anti-HIV drug ever.
With an announced wholesale acquisition cost (WAC) of $20,000 per year, the price
at the pharmacy for cash customers reaches $26,400 annually, or $2,200 per month.
The development of T-20 began over ten years ago, and it
took five years and $50 million simply to prove it was a viable
therapy in humans. Eventually, after ten years and $600 million
invested, the drug made it to market, but it is not yet clear
how accepting consumers will be of an AIDS medicine that must
be injected twice daily. Presumably the population for whom
T-20 is intended — those who have developed resistance
to most other available antiretrovirals and have run out of
therapeutic options — will be willing to put up with
the discomfort and inconvenience for a chance at survival.
But will that willingness extend to government programs that
pay for life-saving medication for people with HIV, especially
in perilous economic times? Maybe not. Already some ADAPs
have refused to put Fuzeon on their formularies, and now Roche
has told activists that its patient assistance program (PAP)
won't cover eligible patients in states where ADAP doesn't
pitch in.
The risk for Trimeris and Roche is that after all the money and time invested, only
a limited number of people will be able to benefit from T-20. The risk for those with
multidrug-resistant virus is that a good drug will remain out of reach because the price
is simply too high.
Sales of Fuzeon have reportedly been well below expectations and
the price of Trimeris stock has dropped by over half since
the launch. One way out for Roche might be to snap up tiny
Trimeris while it is down. This would cut costs by eliminating
royalty payments and put the fusion inhibitor technology into
Roche's hands for further development. But maybe that was
the plan all along.
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Have I Got a Deal for You!
One of the hardest things to understand about U.S. pharmaceutical pricing is
that not everyone pays the same price. And the prices for different payers are
often secret. The situation is much like passengers on a jet plane all headed
to the same destination: no one knows how much the person in the next seat paid
for their ticket. The only official price released by a pharmaceutical company
is called the wholesale acquisition cost (WAC), which is the list price that
industry middlemen are supposed to pay to the pharmaceutical maker. The
wholesaler, in turn, distributes the drug to pharmacies for retail sale.
A more widely quoted price for drugs is the average wholesale price (AWP),
which is an average of list prices quoted by wholesalers to pharmacies. But
because of an arcane system of discounts, rebates, and charge-backs, almost no
one pays the "official" price. The acquisition cost (AC) is the actual amount
that a pharmacy pays for its drug inventory. This cost varies depending on the
quantity purchased, as well as on the rebates and discounts available to the
pharmacist. Large buyers can obtain significant discounts: you can almost be
sure that a drugstore chain like Duane Reade is paying less for pharmaceuticals
than an independent neighborhood drugstore, although this may not translate into
lower prices for consumers. A recent survey of 155 New York City pharmacies
found the highest prices at the biggest chain stores, which charged, on average,
eight percent more than mom-and-pop stores. Shockingly, the report also found
that chain stores in the poorest neighborhoods charged prices well above the
citywide average, meaning that those who can least afford high drug prices in
New York are paying the most.
After acquiring a drug, the pharmacy then resells it to consumers with or
without an additional markup, plus something called a dispensing fee added on.
The dispensing fee is a charge for the professional services of the pharmacist,
plus an additional percentage of the drug's cost to cover overhead and profit.
Each of these steps may be regulated or fixed by prior agreement. For example,
some Medicaid programs may limit the dispensing fees charged by retail pharmacists.
A complex system of rebates for government purchasers has been negotiated to
help control drug costs for the large entitlement programs. The size of the rebates
paid by the manufacturer varies depending on who pays the bill when a prescription
is filled. The average manufacturer price (AMP) is a government-calculated average
of prices for a drug actually paid by nongovernment purchasers. Although not
officially disclosed, the AMP is estimated to run about 20 percent below the AWP.
Government programs use the AMP as a baseline to calculate rebates, with the Medicaid
rebate statutorily set at 15.1 percent of the AMP.
For programs that distribute drugs directly to their clients, the Public Health
Service has established a discount plan that guarantees something called the 340B
price, which at minimum matches the Medicaid 15.1 percent price break, although
participating programs are free to negotiate better discounts. Such federally
approved 340B participants include hemophilia treatment centers, family planning
clinics, and ADAPs that run their own distribution systems. Most big ADAPs,
however, distribute their drugs through pharmacies and are organized as
reimbursement programs. This means that, for each covered drug dispensed, the
state reimburses the pharmacy the AWP minus any special negotiated discounts, plus
the dispensing fee. The state then collects its negotiated rebate directly from
the manufacturer.
The Best Is not Good Enough
The "best price" is a proprietary federal determination of the lowest price paid
by a manufacturer's best customers after rebates and discounts have been applied.
Best price is one of the factors used to calculate the rebates owed to state
Medicaid programs. Yet certain customers getting some of the best deals are
left out of the best price equation.
For example, some government agencies that purchase drugs directly from
manufacturers may enjoy extra discounts, which, if included, would bring the
average best price down. Another large government purchaser, the Department
of Veterans Affairs (VA), negotiates a price that is published as the Federal
Supply Schedule (FSS) price. The FSS price is based on what drug makers charge
their "most favored" nonfederal customers — which, again, may not be the
lowest price in the marketplace if, for example, Wal-Mart negotiates a special
promotional deal on atorvastatin (Lipitor). Both the 340B and the FSS prices are
also excluded from the best price calculation.
So what is the price of any particular drug? It depends on who's paying and
who's asking, since neither the government nor the manufacturers disclose that
information. As an example, take tenofovir (Viread), produced by Gilead Sciences.
The published WAC is $360 for a 30-day supply; an online pharmacy advertises it
for $435; and a state ADAP program may pay $380. As a point of comparison,
Gilead has offered tenofovir to antiretroviral treatment programs in developing
countries at $39 per month, roughly the company's cost of manufacturing.
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Drug Pricing Terms
340B (PHS) Price: The maximum price that manufacturers can
charge covered entities participating in the Public Health Service's 340B drug
discount program.
Acquisition Cost (AC): The net cost of a drug paid by a
pharmacy. It varies with the size of container purchased (e.g., ten bottles of
100 tablets typically costs more than one bottle of 1,000 tablets) and the
source of purchase (manufacturer or wholesaler).
AIDS Drug Assistance Program (ADAP): A federal program
established in 1987 to provide anti-HIV and related medications to low-income
Americans.
Average Manufacturer Price (AMP): The average price paid to a
manufacturer by wholesalers for drugs distributed to retail pharmacies. The
Congressional Budget Office estimates AMP to be about 20% below AWP for more
than 200 drugs frequently purchased by Medicaid beneficiaries.
Average Sales Price (ASP): A new system created by federal
and state governments to ensure more accurate price reporting. ASP is the weighted
average of all non-federal sales to wholesalers and is the net of chargebacks,
discounts, rebates, and other benefits tied to the purchase of the drug product,
whether it is paid to the wholesaler or the retailer.
Average Wholesale Price (AWP): A national average of list prices
charged by wholesalers to pharmacies. AWP is sometimes referred to as a "sticker price"
because it is not the actual price that larger purchasers normally pay, which is often
considerably lower. AWP information is publicly available.
Best Price: The lowest price paid to a manufacturer for a brand name
drug, taking into account rebates, chargebacks, discounts or other pricing adjustments,
excluding nominal prices. Best price data are not publicly available.
Big 4: The four largest purchasers of pharmaceuticals within the
federal government: the Department of Veterans Affairs, the Department of Defense, the
Public Health Service, and the Coast Guard. The Big 4 often get pricing below FSS on
brand name drugs.
Covered Entities: Facilities and programs eligible to purchase
discounted drugs through the Public Health Service's 340B drug discount program. Covered
entities include state AIDS Drug Assistance Programs (ADAPs) and hospitals owned by state
and local governments.
Dispensing Fee: The charge for the professional
services provided by the pharmacist when dispensing a prescription,
which may include overhead expenses and profit.
Federal Ceiling Price (FCP): The maximum
price manufacturers can charge for FSS-listed brand name drugs
to the Big 4, even if the FSS price is higher. FCP information
is not publicly available.
Federal Supply Schedule (FSS): The collection of multiple award
contracts used by federal agencies, U.S. territories, Indian tribes, and others to purchase
supplies and services from outside vendors. FSS prices for the pharmaceutical schedule are
based on the prices that manufacturers charge their "most-favored" non-federal customers,
which may not be the lowest prices on the market. FSS prices are publicly available.
Federal Upper Limit Price (FUL): The federally established maximum price
for a drug if at least three equivalent generic versions of the product are available and at
least three current suppliers. FUL equals 150% of the published price for the least costly
therapeutic.
Medicaid: A program using state and federal funds to reimburse providers
that offer medical care to low-income people who cannot afford health insurance. Medicaid serves
55 percent of people with AIDS and 90 percent of children with HIV/AIDS nationally.
Medicare: A federally administered system of health insurance available to
people aged 65 and over and to people with severe disabilities.
Non-Federal Average Manufacturer Price (Non-FAMP): The average price paid
to a manufacturer by wholesalers for drugs distributed to non-federal purchasers. The Big 4 are
entitled to discounts on brand name drugs of at least 24 percent off of Non-FAMP. Non-FAMP is not
publicly available.
Pharmacy Discount Price: The price paid to the pharmacy by a program (i.e.,
ADAP, Medicaid) for drugs. Brand name drug prices are typically paid relative to AWP (for example,
AWP minus 10%). The price covers the pharmacy's payment to the wholesaler, operating costs, and profit.
Unit Rebate Amount (URA): The rebate amount paid by a manufacturer to ADAP/Medicaid
for each unit (e.g., capsule) of drug. Information on URA is not publicly available.
VA National Contract Price: The price the Department of Veterans Affairs has
obtained though competitive bids from manufacturers for select drugs in exchange for their inclusion
on the VA formulary. Because the VA is entitled to FCP prices under federal law, VA national contract
prices are even lower than FCP prices and are often the lowest prices in the nation. These prices are
publicly available.
Wholesale Acquisition Cost (WAC): The price
paid by a wholesaler for drugs purchased from the wholesaler's
supplier, typically the manufacturer of the drug. WAC is the
price manufacturers release publicly, and is sometimes called
the "list price." Publicly disclosed or listed WAC amounts
may not reflect all available discounts.
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Other Factors Affecting Price
Another aspect of a drug's price is less often discussed: what is it worth to
the individual? The advent of the eBay online auction model has rationalized the
pricing of all kinds of products and services by offering them to a wide market
and letting individual buyers decide what they are willing to pay. But for products
that are necessary to preserve human health and life, society has decided that some
unregulated markets are unacceptable. Governments and large private health systems
such as Kaiser Permanente use their clout as huge purchasers of pharmaceuticals to
demand lower prices, and now the states are attempting to control prices with rules
legislation, and group bargaining power. Yet there are ways around these pressures.
Statutory discounts can be thwarted by raising the base price until the discounted
price matches what the company would prefer the customer to pay. Where price increases
for existing products are capped, a company may introduce a new formulation of an old
drug at a higher price.
Some prices are set where they are because that is how much other, similar products
cost. For example, there are probably few similarities between the operating costs of
cable and satellite television, yet remarkably both services are priced the same. And
why does high-speed Internet access via DSL cost the same as access via cable? Well,
providers reason, if that is what people are willing to pay, then why leave money on
the table? When protease inhibitors (PIs) first entered the market in December 1995,
they established a new benchmark for the price of HIV/AIDS medication, and the industry
hasn't looked back since. This seems to be a lesson the generic drug industry is now
putting into practice.
Some fear a new niche market may be on the horizon as several so-called salvage drugs,
which work against highly drug-resistant HIV, proceed through the drug development
pipeline. Some potential candidates might be the protease inhibitors tipranavir or TMC
114. Fuzeon (T-20), while best known as the first entry inhibitor, is also primarily a
salvage drug. There have been reports of a market research company testing the waters
for creating a new pricing category for salvage drugs, with Fuzeon's $20,000 per year
price a benchmark. While pricing a difficult-to-tolerate PI that high may seem
preposterous on the face of it, the limits of drug company audacity may be revealed
when and if these drugs make it to market.
Price also reflects the value offered by a drug. For hepatitis C virus (HCV), for
example, the price of a yearlong course of treatment includes the chance that one's
infection may be permanently cured. Currently, the newest and best HCV therapies can
run upwards of $35,000 per year. But with HIV, there is no cure, and the need for
therapy lasts a lifetime. The cost of anti-HIV therapy in the U.S. currently runs
between $10,000 and $18,000 per year.
The price of drugs may also be weighed against the cost of hospitalization and
care for untreated HIV, and thereby judged to be a bargain. A new, pricier drug
may have fewer side effects and require less medical management than its cheaper
predecessors. In the big picture, it is a money saver (though in the short term
it is still a drain on state budgets). Some economists have calculated the value
of drug therapy in relation to lost productivity due to early death from AIDS.
Few people who lived through the bad old days before PIs would say that the
latest antiretrovirals aren't worth the cost.
Death and Taxes
Could we finally be entering an era in which political reality demands more
reasonable cost controls? There are powerful forces influencing elected officials
today. Health care costs continue to rise, even as demand is forecasted to balloon
as the population ages. Yet the political will to pay for equitable health care
remains weak; too few voters accept the connection between taxes and the social
benefits that government provides. On the other hand, the biggest contributor
to rising costs — the pharmaceutical industry — is represented by
an extensive and pervasive lobby that makes significant contributions to influential
members of Congress and the Administration. Beyond these commercial and political
interests are conservative hardliners who argue that government has no right to
levy taxes to pay for other people's problems. These forces would just as soon
see Medicaid and Medicare crash and burn; many view the Bush tax cuts as a shortcut
to dismantling all entitlement programs. In the ongoing struggle between those who
wish to downsize government spending, the taxpayers, and the growing number of
people in need of affordable health care, it increasingly looks as if something
has to give.
Medicare: the Final Frontier
The major battlefield is turning out to be the question of whether Medicare,
the medical insurance program for seniors and people with severe disabilities,
will be able to offer a prescription drug plan that doesn't make things worse
than they already are. Currently this government program does not cover outpatient
prescription medicines. Without substantial extra insurance, people who rely on
Medicare pay for their medications out of pocket — which means that those
who can least afford it often pay higher prices than almost anyone else.
The plight of seniors has received high-profile coverage on the nightly news,
with footage of old folk boarding buses bound for discount pharmacies in Canada.
Internet sites that fill prescriptions at the more affordable Canadian prices have
come under attack as some major pharmaceutical companies have refused to sell their
products to Canadian pharmacies that ship drugs back to the U.S. It is not clear
whether there is a significant benefit to shopping in Canada for individuals with
HIV: the listed Canadian pharmacy price for a month's supply of 3TC (lamivudine,
Epivir) is $230, compared with Walgreens' U.S. price of $295. But recently, some
big purchasers have expressed their intention to get into the reimportation act.
The governor of Illinois and the mayor of New York have each begun demanding the
right to acquire more affordable drugs from Canada and Europe and the principle
has gained a surprising amount of support in the House of Representatives.
Faced with change, the industry initially tried to block a Medicare drug benefit,
because they feared the leverage the government would gain if it were able to
negotiate prices for seniors, the largest sector of drug consumers. As this paragraph
from Pfizer's 2002 annual report cautions investors:
"In the U.S., many pharmaceutical products are subject to increasing pricing
pressures, which could be significantly impacted by the outcome of the current
national debate over Medicare reform. If the Medicare program provided outpatient
pharmaceutical coverage for its beneficiaries, the federal government, through its
enormous purchasing power under the program, could demand discounts from pharmaceutical
companies that may implicitly create price controls on prescription drugs."
Yet the next line in Pfizer's report recognizes that change may present opportunity:
"On the other hand, a Medicare drug reimbursement provision may increase the volume of
pharmaceutical drug purchases, offsetting at least in part these potential price
discounts." The plan that has emerged is beyond Pfizer's wildest dreams.
Congress is now proposing a Medicare revision that, while it may offer coverage to
some of those hardest hit with the burden of drug costs, does so with the condition
that Medicare won't use its new buying power to negotiate better prices. The impending
deal throws a lifeline to an industry addicted to growth by dramatically expanding
the size of the U.S. pharmaceutical market without touching the profit potential, in
effect giving the drug companies a huge windfall paid for by taxpayers, the grandchildren
of taxpayers and by seniors forced to go along with a stingy plan full of hidden, painful
cost-sharing provisions.
For thousands of people with HIV, the details of this plan are especially frightening.
It's currently estimated that around 50,000 people with HIV are beneficiaries of both
Medicare and Medicaid. For these people, Medicaid provides a safety net to deliver
essential drugs that Medicare does not. Under the new proposal, people on Medicare would
be forbidden to draw on Medicaid benefits for uncovered drug costs, in effect forcing
low income Medicare beneficiaries into the already reeling ADAP system or onto the streets.
The full implications of these proposed changes still have not been realized.
As the reimportation cause moves to the mainstream and as drug costs become a bigger
part of everyone's budget, price controls may no longer seem like a radical idea. House
Speaker Dennis Hastert recently awoke to the realization that unfettered drug prices in
the U.S. are in effect subsidizing price controls in Europe. Is this the birth of a
new red meat issue based on outrage that France is getting a free ride at U.S. taxpayer
expense? But Hastert, a foe of reimportation, is more concerned about raising prices
elsewhere than capping prices here at home, and he has asked U.S. Trade Representative
Robert Zoellick to look into the issue.
Virtually everyone agrees that mounting drug costs are causing distress, but no one
has been able to forge a political accommodation that would assure access to needed
medications for all, while continuing to support research into newer and better drugs
for those who will need them tomorrow. Meanwhile, budgets continue to strain as more
and more people come to depend on life-giving pharmaceuticals whose prices rise with
no end in sight.
A version of this article originally appeared in BETA.
One for the Blipper
By Bob Huff
You can be a "blipper" and still be chipper, suggests a study in the Noember 2003 issue
of the Journal of Virology by Michele Di Mascio and her colleagues from the Los Alamos
National Laboratory and the Aaron Diamond AIDS Research Center in New York. Blips are
usually thought of as occasional, transient, episodes of low-level HIV RNA viremia in
someone who is adherent to their antiretroviral therapy and otherwise enjoys a well-suppressed
viral load. Most people with HIV RNA below 50 copies/mL (undetectable) may have intermittent
positive viral load test results at some time or another. But how common are blips, how long
do they last, and what causes them? Some have suggested that blips are due to the release of
virions from reservoirs or protected sanctuaries in the body where replication of drug-sensitive
virus continues at a low level. Others have reported that it's drug-resistant virus that makes
for blips. Another theory is that an immunological event such as an infection suddenly
increases the number of infectable immune cells and that blips are the resultant viral
feeding frenzy. Whether due to any of these reasons or perhaps due to natural variations in
drug levels in a person hovering on the margins of suppression, most studies, fortunately,
have not found a long-term association between blips and loss of virologic control or disease
progression.
Di Mascio's study looked carefully at the frequency and duration of blips above 50 copies/mL
as recorded in 123 treatment naive patients from eight different research cohorts starting a
PI-containing regimen. The mean CD4 count at treatment initiation was 474 (+/- 254) cells/mm3.
Overall, the analysis looked at an average of 26 viral load tests per subject over as many months,
finding a wide variation in blip frequencies, with 41 patients showing no blips and one patient
blipping at every other determination. The average number of blips per sample was 0.09.
The study found that blips were not due simply to assay variation or to chance alone but that
different people inherently have different tendencies to blip. They next showed that, within the
limits of monthly testing, having one blip does not predict having another and that blip arrival
is substantially random. Furthermore, in the patients studied, neither the frequency nor amplitude
of blips seemed to increase with time on therapy, which suggests that poor adherence was not
responsible for these viremic episodes. There was a relationship, however, between blip frequency
and baseline CD4 count, with those having more advanced HIV disease at the time of starting therapy
being more likely to become blippers. The significance of this is not clear, although during the
period of observation reported here no increase in blip frequency was seen.
Blips Passing in the Night
Perhaps the study's most striking finding is that blips may actually be viremic episodes that
last as long as a month, and that, depending on sampling frequency, a number of different blips
could produce a pattern of viral load test results that appears as continuous viral breakthrough.
An analysis of viral load measurements taken within 22 days of a blip, when fitted into a model,
predicts a typical blip duration of 20 to 30 days. If blip episodes actually last this long, then
even people with several consecutive detectable viral load determinations might actually be having
a train of independent blips, and not sustained viral load throughout the period. Since even
sequential blippers in this study generally did not progress to virologic failure, one might
wonder how many consecutive blippers in real life have undergone unnecessary regimen switches
because of what appeared to be sustained low-level viremia to a clinician determined to maintain
undetectability? While this work comes from the Theoretical Division of the Los Alamos lab, the
practical implications of blips, blippers and blipping obviously require more and urgent research.
Replication Rates and Viral Load
The different rates and amplitudes of blipping suggest that there is a great deal of individual
variability in the replication rate of HIV, even when mostly suppressed by drug pressure. Another
study reported in the November Journal of Virology investigated the relation between viral load
and replication rate in individuals who are not taking antiretroviral drugs.
It's long been recognized that viral genetics plays a role in how aggressively HIV behaves in a
host. The X4 coreceptor-using variant is particularly famous for kicking HIV immune damage into
high gear. More recently it's been recognized that for people who have been on therapy and have
developed drug-resistance, their mutant virus may be "less fit" than a wild type drug-susceptible
virus. If so, then staying on a failing regimen may be clinically protective despite loss of viral
control. Growth competition experiments have also shown that viruses from several long-term
non-progressors were inherently less replication competent than viruses from people with normal
rates of disease progression.
On the host side, the best known genetic trait that affects susceptibility to HIV infection
and subsequent disease progression is a mutation found in a small segment of the population that
limits or eliminates the CCR5 cell surface protein, an essential co-receptor for HIV entry. But
this flaw in the CCR5 gene is not the only source of CCR5-dependent variability in HIV replication.
Even in persons with two functional copies of the CCR5 gene there may considerable inter-patient
variability in levels of CCR5 expression at the cell surface. Individuals may also express
different amounts of RANTES, a messenger protein that competes with HIV for using CCR5, with
elevated levels of RANTES associated with slower disease progression. Different degrees of innate
and acquired immunity to HIV may also play a large role in keeping HIV replication under control
during the years of slowly progressing disease that follows primary infection. HIV-specific CD8
cells in particular are thought to help in controlling runaway HIV disease and it is hoped that
one day a vaccine can be made to boost these protective cells.
The amount of virus found in the blood (viral load) is likely determined by a balance between
the elimination of virus and the production of new virus. HIV-specific CD8 cells are generally
considered the leading candidate for effecting viral elimination. But this theory remains
shaky because most studies haven't found the expected correlation between the strength and
specificity of CD8 T-cell response and lowered viral load. If CD8s are mainly responsible for
clearing out unwanted HIV, then why don't people with the most qualified CD8s always have the
lowest viral loads?
Thomas Campbell and colleagues from the University of Colorado, Denver, sought to establish if
replication rate was correlated with plasma viral load levels by performing two different kinds
of replication rate assays on the viruses of 12 individuals with chronic HIV infection who
were not receiving treatment. Eight of the 12 were treatment naive and none of the participants
had detectable drug resistance mutations.
Each individual's virus was cultivated in cell cultures for up to ten days with assessments
of HIV p24 protein production performed daily. Changes in the amount of p24 detected from one
assessment to the next produced a growth curve that revealed each virus' particular replication
dynamics. Typically, each virus had a daylong lag before any p24 production was seen. After
p24 was detected, growth proceeded exponentially for the next six days or so. Finally, a plateau
phase appeared after the sixth day when additional p24 production tapered off, probably due to
saturation of infectable cells after day four.
In addition to the growth curves, the replication capacity of each virus' reverse
transcriptase and protease enzymes were determined by genetic recombination techniques using
a modified version of the Phenosense drug susceptibility assay.
The investigators found a strong linear relationship between replication rate and viral
load that held true from 1000 copies to 100,000 copies/mL. Furthermore, they established that,
among these 12 individuals, there was significant natural variation in rates of viral replication
due entirely to viral qualities. Another interesting finding was that RT and PR replication
capacity were related to the cell-based replication rate. This suggests that genetic variations
in these wild type enzymes may be responsible for the different replication rates of different
viruses, even in the absence of drug exposure.
One limitation to the study is that in cell systems the role of the host's genetics and immune
system are removed, so an individual's actual response to their virus can not be predicted from these
results. This issue aside, however, the authors make a provocative suggestion that different viral
replication rates may be obscuring measurements of immune-based factors that influence HIV viral
load in the body. In particular, they suggest that CD8 cell responses, which have previously not
correlated well with viral load, should be reexamined after controlling for replication rate. It's
possible that the expected CD8 impact on viral load may only become clear after the "noise" of
variation in replication rate has been reduced. If so, then this could help unlock one of the central
mysteries of immune control of HIV and remove one of the stubborn stumbling blocks in the way of
finding a vaccine.
References:
Di Mascio M, Markowitz M, Louie M, et al. Viral blip dynamics during highly active antiretroviral
therapy. JVirol. Nov 2003.
Campbell TB, et al. Relationship between in vitro human immunodeficiency virus type 1 replication
rate and virus load in plasma. JVirol,.Nov 2003.
Treatment Activists Meet with the FDA
By Bob Huff
HIV treatment activists met with officials and staff of the federal Food and Drug Administration
(FDA) on November 14, 2003 in Rockville, Maryland. The FDA hosted the meeting to update the
community on several recent drug approvals and to address several questions that activists had been
asking about the future of drug approval for HIV in the U.S. The event was a field trip for staff of
the Center for Drug Evaluation and Research (CDER), with at least 30 scientific and clinical staff
in attendance. The activist community was represented by 25 members of the AIDS Treatment Activist
Coalition (ATAC).
Mark Harrington opened the forum by recapping the history of HIV drug development from the
community perspective. Some FDA staffers may have been surprised to learn that fifteen years ago,
on October 11, 1988, over a thousand AIDS activists had surrounded their headquarters and shut
down the agency for a day in protest of slow drug approvals and unethical study demands. Harrington
recounted how relations improved dramatically after that, and that cooperation between the community
and the FDA during the term of Commissioner David Kessler in the 1990s helped speed the approval of
an unprecedented number of new drugs that altered the course of the U.S. epidemic. He also noted
the leadership role the agency has played by holding hearings about emerging challenges in HIV drug
development before they become widely recognized, and for makeing the industry informed about what
is expected of them early in the approval process.
Harrington then summarized the community's requests:
- More data on pharmacokinetics of drugs in more diverse populations
- More drug-drug interaction studies completed at the time of approval, including studies
with methadone, birth control hormones, and TB drugs such as rifampin.
- Drug-drug interaction studies with the most commonly used protease inhibitors and
NNRTIs should also be performed.
- Industry should be consistently prodded to assure that study populations reflect the
makeup of the epidemic by adequately representing women and people of color. The
composition of study populations is usually set at the time the study sites are selected and
it will be important to build new relationships with clinics capable of enrolling more
diverse groups of individuals.
- After drugs have been approved, promises made by companies to continue post-
marketing research should not be allowed to languish. Currently the agency has no
effective way to compel completion of these Phase IV commitments, and pressure on
Congress to give the FDA more leverage may be needed.
- The community is also asking that better systems be implemented to monitor long-term
side effects after drugs are approved. The current adverse events reporting system is
voluntary and may miss early signals of toxicity. A network of “sentinel practices” that
would report unusual symptoms might be a viable enhancement to our early detection
system. The need for a better system to detect and track side effects such as lipodystrophy
syndrome after drugs are approved is a top concern for ATAC.
In addition to these drug development issues, ATAC members expressed concern about
reports that ideologically biased individuals had been inappropriately appointed to sit
on FDA advisory committee panels that review drugs concerned with reproductive health.
There was also concern that radical deregulationists who view the FDA as a roadblock
to free and unfettered business would seek to dismantle the Agency.
Current commissioner Mark McClellan joined the meeting, thanked the community for
its important contributions and responded to the issues raised by ATAC. In particular
he outlined a prototype adverse events surveillance system being developed in association
with the National Cancer Institute. McClellan has made better safety reporting a priority
for the agency and the pilot model for cancer should be implemented for HIV as soon as
possible.
The commissioner also addressed activist concerns about politicization of the agency,
radical deregulation and reimportation of prescription drugs from Canada and Europe.
He denied that politicization was occurring or that the agency was in jeopardy from
Congressional cutbacks. On the drug importation issue, he defaulted to reciting familiar
arguments about counterfeiting and improper storage. While these are serious potential
problems, in the current political conversation these issues seem intended to deflect
discussion about ways to cope with out-of-control drug prices. Recent news articles
about the diversion of HIV drugs from Florida to Texas via a string of small, shady
pharmaceutical wholesalers makes it difficult to understand where the risk is in
importing pharmaceuticals from state regulated distribution networks in Europe. Between
the ill-regulated domestic drug channels and the hourly email offers I get for vicodin
and valium, it seems disingenuous to suggest that the greater risk to consumers comes
from abroad.
Debra Birkrant, director of the division of antivrial drug products, reviewed
the various paths that drug approval can take. Accelerated approval for important
new drugs to treat HIV will always be considered, she said, despite the demands
placed on the agency to assure a thorough evaluation within the six-month window
given to fast-tracked agents. She also had a request for the activists: instead of
delivering a position paper outlining community concerns and unanswered questions
at the end of the process, the agency would find it helpful to hear the activist
analysis earlier on, so that it could help guide the agency's priorities.
After the meeting broke up, activist and FDA staffers mingled and exchanged
ideas about how each could help the other assure that future HIV drugs were
approved with fewer gaps in knowledge and better data on safety and effectiveness.
It's clear that the people of the FDA are keenly interested in understanding
everything about the world of AIDS and how the drugs they regulate are used in the
real people's lives. In particular, it was gratifying to learn that several senior
staffers who are physicians volunteer their time in local HIV clinics every week,
helping them to keep in touch with the realities of HIV care.
The FDA workers we met clearly take their duties seriously; they should feel
fortunate to work for an agency that exemplifies the highest ideals of what
government can do. In proactively reaching out to the community for this meeting,
the FDA and CDER went beyond what was expected and set a welcome tone for future
cooperation. A follow up meeting with CDER's sister center, the Center for Biologics
Evaluation and Research (CBER) is being planned. CBER will play an important role in
the development of HIV vaccines as those candidates begin to enter clinical trials.
Guidelines Panel Responds
ATAC received another demonstration of the power of activist intervention in the
recent revision of the HHS HIV/AIDS Treatment Guidelines. ATAC had sent a letter to
John Bartlett and members of the guidelines panel asking that ambiguous links between
d4T (stavudine, Zerit) and lipoatrophy in denoted Table 12a be strengthened.
The revisions also now clarify that the "preferred" classification attached to
certain regimens is a general designation, and that one of the "alternative" regimens
may actually be the preferred regimen for a selected patient depending on circumstances.
This addresses activist concerns that the guidelines are sometimes mistaken as a "cookbook"
for HIV care. Also, two recently approved drugs are now included in the guidelines.
Atazanavir has been added as an alternative PI and FTC has been added as an alternative
NRTI. Fosamprenavir was approved too recently to make it into this round of revisions.
The recent spectacular failure of tenofovir + abacavir + 3TC updates a section on
regimens that should never be offered at any time. Another triple NRTI regimen, tenofovir
+ ddI + 3TC, also joins the "do not use" list, as does the combination of ddI and d4T in
all cases; formerly the combo was only proscribed during pregnancy. Atazanavir plus
indinavir are also now contraindicated due to their potential for worsening elevated
bilirubin levels, and mixing 3TC and FTC is not recommended because they have such
similar resistance profiles.
Finally, new data on using Fuzeon in patients with virologic failure
has been added.
The guidelines are neccesarily a work in progress and the logistics
of keeping up with changing treatment practices and new drug data
is daunting. With these more frequent updates and the willingness
to respond to community input, the guidelines are more than ever
before becoming a "living document."
Testimony on Accelerated Approval
September 1994
By Carlton Hogan
(July 28, 1961 November 18, 2003)
In 1994, Carlton Hogan testified before an FDA Antiviral Advisory Committee about the
risks of letting drugs loose in the population without a rigorous method to detect and
report late emerging toxicity. In 2003, AIDS activists met with FDA and repeated many of
the concerns that Hogan outlined: the need for post-marketing follow-up, the failure of
drug companies to live up to commitments made to study drugs after they are approved,
the inadequacy of penalties available to FDA for enforcing those commitments. Hogan's
testimony seems especially prescient as it was made before the advent of truly effective
antiretroviral therapy — and well before lipodystrophy and other complications
associated with the new regimens had come to light. Carlton Hogan was an intellectual
and moral leader in the AIDS treatment activist movement at a critical time and these
excerpts from his testimony remain provocative today.
Access to promising new drugs is a right one cannot deny patients with a fatal illness.
However, this right carries with it the responsibility to provide information that will
advance science and help future generations of patients.
Despite the serious nature of my personal circumstances, I am loath to ingest any more
potentially useless and toxic therapies. Poisoning myself seems an irrational response to a
threat on my life. I think there is a very natural tendency to trust medicine in this age
of antibiotics, and to believe a priori that taking "something" is always better than taking
"nothing". While comforting, this notion is also quite incorrect.
The current accelerated approval regulations are adequate, albeit somewhat ambiguous,
hence this meeting. One of the more important components, to my mind, is the provision for
FDA to ask for further post-marketing (phase IV) studies if they have concerns as to the
efficacy or safety of a drug receiving accelerated approval. Unfortunately this component,
while reasonable in conception, has proved unworkable in execution. ddC received approval
on the basis of little clinical information, conditional on Roche later making a determination
of clinical efficacy. Of course as everyone in this room no doubt knows, Roche did not follow
through, and those studies have not been done to date.
Unfortunately it appears that FDA's only recourse in such a situation would be to withdraw
a drug from market, a politically difficult solution, and a cruel one as well, as persons
taking ddC would be abruptly dropped. [The neurotoxicity of ddC subsequently became apparent
and the drug, while still available, is now rarely used. Ed.] Clearly, in the absence of
evidence of harm from ddC this would be an unacceptable solution, even were it politically
possible. I think it is highly unlikely that we will see an HIV drug withdrawn from market
unless it proves overwhelmingly toxic (and given AZT's toxicities, it is hard to imagine how
bad that might be), or unless there is a replacement that is so clearly superior as to make
much of this discussion moot. Therefore much of the requisite information will have to continue
to be collected prior to full unrestricted approval.
It would be great if early testing of toxicity, such as occurs in Phase I trials, could be
counted on to uncover all of a drug's deleterious effects. But some toxicities develop only
in some persons, or only over longer periods of time. None of the phase I or II trials of AZT
revealed the now widely recognized side effect of myopathy. It was only after large numbers
of patients had taken AZT over long periods of time that myopathy became apparent. I believe
it eminently possible, and even probable, that there are many compounds biologically active
against HIV, which are able to clear short term toxicology testing, have a pronounced biological
effect on the surrogate of your choice, yet in the long run do more harm than good. In the quest
for an effective anti-HIV treatment, we are looking for something to interfere in intercellular
processes. I fear that our biochemical "fingers" are still a little too thick and blunt to "fix"
that finely machined watch without perturbing the system in unknown, and possibly untoward ways.
And perhaps we may be a little too arrogant and insecure to admit the limitations of our knowledge
and skill.
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