Consensus Statement on the Pricing of TMC114 /Darunavir

Consensus Statement on the Pricing of TMC114 /Darunavir

Consensus Statement on the Pricing of TMC114 /Darunavir
April 17, 2006

TMC114/darunavir will soon become Tibotec’s first licensed drug for the treatment of HIV disease. It is likely to be the first of several important anti-HIV drugs from Tibotec. To date, the HIV/AIDS community’s relations with Tibotec have been exemplary as the company has shown an exceptional willingness to invite and listen to input from people affected by HIV disease. Based on everything we know now, the licensure of TMC-114/darunavir will be a worthy addition to our anti-HIV armamentarium, especially for people who have developed resistance to the existing protease inhibitors.

This good news, however, does not exist in a vacuum. Instead, it will be played out against a background of growing national and international crises in the cost of health care. The cost of a typical anti-HIV regimen in United States has risen to $15,000 or more for initial therapy, while the cost of salvage therapy can easily reach three times that amount. This is just for cost of the drugs. These costs plus the cost of associated medical care must be supported for decades to come for every single person with HIV disease. Better drugs, like TMC114/darunavir, result in longer lives and thus even longer times on therapy. If the average duration of therapy is limited to no more than 50 years per person, the costs of HIV drugs over this period will easily exceed a trillion dollars in the US alone, not even counting future price increases. Add in a reasonable cost for the vast numbers needing therapy in developing nations and the overall cost of drug for treating HIV disease worldwide could easily equal the current US national debt. Clearly, the path we are on is not sustainable, at least not for anyone other than the pharmaceutical industry.

At a time when evidence of responsible citizenship is needed from the pharmaceutical industry, we have instead been treated to ever increasing prices with each new drug. Two recently approved protease inhibitors, Reyataz and Aptivus, leapfrogged each other in setting new pricing thresholds, quickly reaching a price nearly three times that charged for Crixivan when it offered the first real breakthrough in AIDS treatment in 1996. TMC114/darunavir is the next drug in line and all eyes will be on it the day its price is announced. Its net price must include the cost of a booster drug, Norvir from Abbott Labs, whose price was recently increased by 400% in another demonstration of reckless civic behavior by a pharmaceutical company. While Tibotec isn’t responsible for the price increases taken by others, it is responsible for the decision to use the Norvir booster. Tibotec now has two choices. It can either follow in the footsteps its predecessors, defying the needs of patients and taxpayers, or it can make a bold statement that shows that the industry will do its part to restrain the cost of healthcare. Make the wrong choice and all of the company’s efforts to maintain strong relationships with the government and the community will have been for naught. The cycle of ever increasing costs, and ever higher profits, will once again be validated. Is this the legacy that Tibotec wishes to create?

Since it was formed in 1998, the Fair Pricing Coalition has sought drug pricing that is cost neutral. We seek to avoid having each new drug push the cost of treatment upward. In the case of TMC114/darunavir, this leads to a very specific demand: we ask that the price charged for TMC114/darunavir should be less than or equal to the current price of Kaletra, which is presently the best selling protease inhibitor and the drug that TMC114/darunavir is most likely to replace in clinical practice. Since Tibotec has chosen to use a ritonavir booster to improve the bioavailability of TMC114/darunavir, the price must include its cost, just as the ritonavir booster is already included in the price of Kaletra.

We also expect substantial discounts over and above the minimum required by law for the AIDS Drug Assistance Program and other government payers. We trust that separate negotiations are underway with the appropriate representatives of those programs, but we hope to establish the baseline for those discussions with the pricing principles laid out here.

We urge the leadership of Tibotec Research, Tibotec Therapeutics, and parent companies Ortho and Johnson & Johnson to give this proposal the most serious possible consideration. We believe that the company will benefit greatly from agreeing to this request. It will establish the company both as a scientific leader and also as a civic leader. It will stand as evidence to the taxpayer and to the Congress that the pharmaceutical industry is capable of more than simply seeking the greatest possible profits without regard for the impact on society. Perhaps most importantly, it will be welcomed and appreciated by the people with HIV and the medical professionals who treat them. It will almost certainly generate positive press about a “new, more responsible attitude” by industry. And, we believe, it will encourage the fastest possible uptake of the drug into clinical practice. Tibotec is aware, no doubt, that recent Medicare Part D formulary guidance issued by the Centers for Medicaid and Medicare services, has changed the mechanism for adding newly FDA approved drugs in the six protected classes, including anti-retrovirals, as of April 17, 2006. Any drug approved by the FDA after April 17 must be approved for inclusion in the individual plan formulary by that plan’s Pharmacy and Therapeutics (P & T) committee. Drugs included in a protected class will have a expedited approval time that can take up to 90 days or three months, but there is no guidance suggesting that newly approved drugs in the protected classes must automatically be added to the plan formulary. Each state will likely take price into account along with therapeutic value. Additionally the P& T committees will make decisions as to how to tier new drugs for co-payment amounts. Because of their price, most of the newer anti-retrovirals are tiered in the highest tiers making them unaffordable for many. Therefore, if Tibotec hopes to see a rapid inclusion in formularies, they must price it aggressively. How state authorities and the HIV affected public feel about the pricing of new drugs will contribute to the speed of this process. At the state level, price will almost certainly be a key consideration. Meeting the goal described here will make it possible for the activist community to support the fastest possible acceptance on the formularies.

The payers, Congress, patients and providers are greatly frustrated with the pricing practices of the pharmaceutical industry. While patients and payers are struggling year after year to raise the money needed to obtain access for a growing patient population, the pharmaceutical industry has shown virtually no restraint in its quest for profits and shareholder benefits. Its profitability ranks among the highest of all industries while the percentage of revenues devoted to research and development are at best average. The pharmaceutical industry speaks proudly of the need for a “free market economy” and the benefits of competition, but in fact it behaves more like a group of monopolies. It accepts little or no pressure on prices as a result of competition, the cornerstone of a market driven economy. In the US, the industry funds massive political lobbying to prevent government from negotiating prices for the largest national payers. Unlike other industries, in which high profits are usually the result of the consumers’ selection of outstanding products, the “buyers” of pharmaceutical products have little choice in the selection of products and product quality bears no relationship to the price charged. This coercive relationship between buyer and seller can no longer be tolerated. It must be challenged, whether through consumer protest, eventual price controls, or payer product selection, none of which are very attractive to industry. Make the right choice now and none of these approaches will be necessary.

We will follow-up this letter with continued discussions and one or more face to face meetings with Tibotec. The list of signers supporting this position will be updated weekly.

[list in formation]

Regards,

Nelson Vergel
powerusa dot org

“I learned that…no one is perfect but most people are good; that people can’t be judged only by the worst or weakest moments; that harsh judgements can make hypocrites of us all; that a lot of life is just showing up and hanging on; that laughter is often the best, and sometimes the only response to pain.” My Life by Bill Clinton

—————–
Forwarded Message:
Subj: Request for Sign-On New HIV Drug Pricing Consensus Statement
Date: 4/19/2006 3:44:46 P.M. Central Standard Time
From: Leichou

Please help distribute widely, apologies for duplicates.

Pricing of pending new HIV drug critical to domestic treatment access,
Now is the time to impact the pricing decision by Tibotec,
Join the Fair Pricing Coalition’s consensus statement

The new anti-HIV drug TMC114/darunavir made by Tibotec is expected to receive FDA approval this summer. This drug is particularly important because clinical trials have shown it to work against highly resistant strains of HIV. Access to this drug is a matter of life and death for many people, particularly long-term survivors.

As shown by recent pricing decisions by other HIV drug makers, the industry trend is to price new therapies at record high levels. The prices of the last two protease inhibitors, Reyataz from Bristol Myers Squibb and Aptivus from Boeringher Ingelheim, bring the price of protease inhibitors alone to well over $10,000 and the cost of a typical regimen in excess of $16.000. With drug prices like these, we may never be able to get adequate funding for ADAP and the Ryan White program.

The escalation in the price of prescriptions drugs MUST STOP NOW if there is ever to be a hope of bringing treatment to all in need.

We believe that we have a good chance of reversing the upward spiral of prices with this company and this drug, but only if we raise sufficient public pressure before the price is set. Please join us and our organizations to help make this a reality. Directly or indirectly, it affects every other battle over government funding for HIV.

Thank You,

Martin Delaney, for Project Inform
Lei Chou, for Community HIV/AIDS Mobilization Project
Lanny Cross
Mark Harrington, for the Treatment Action Group
Lynda Dee, for AIDS Action Baltimore
Dennis deLeon, for the Latino Commission on AIDS
Matt Sharp, for the Test Positive Aware Network
Bob Huff, for Gay Men’s Health Crisis (GMHC)
William E. Arnold, for Title II Community National AIDS Network

To sign on to this consensus statement, please send the following information to leichou@aol.com

Name:
Organization:
Address:
City:
State:
Zip:
Phone:
email:

Consensus Statement on the Pricing of TMC114 /Darunavir
April 17, 2006

TMC114/darunavir will soon become Tibotec’s first licensed drug for the treatment of HIV disease. It is likely to be the first of several important anti-HIV drugs from Tibotec. To date, the HIV/AIDS community’s relations with Tibotec have been exemplary as the company has shown an exceptional willingness to invite and listen to input from people affected by HIV disease. Based on everything we know now, the licensure of TMC-114/darunavir will be a worthy addition to our anti-HIV armamentarium, especially for people who have developed resistance to the existing protease inhibitors.

This good news, however, does not exist in a vacuum. Instead, it will be played out against a background of growing national and international crises in the cost of health care. The cost of a typical anti-HIV regimen in United States has risen to $15,000 or more for initial therapy, while the cost of salvage therapy can easily reach three times that amount. This is just for cost of the drugs. These costs plus the cost of associated medical care must be supported for decades to come for every single person with HIV disease. Better drugs, like TMC114/darunavir, result in longer lives and thus even longer times on therapy. If the average duration of therapy is limited to no more than 50 years per person, the costs of HIV drugs over this period will easily exceed a trillion dollars in the US alone, not even counting future price increases. Add in a reasonable cost for the vast numbers needing therapy in developing nations and the overall cost of drug for treating HIV disease worldwide could easily equal the current US national debt. Clearly, the path we are on is not sustainable, at least not for anyone other than the pharmaceutical industry.

At a time when evidence of responsible citizenship is needed from the pharmaceutical industry, we have instead been treated to ever increasing prices with each new drug. Two recently approved protease inhibitors, Reyataz and Aptivus, leapfrogged each other in setting new pricing thresholds, quickly reaching a price nearly three times that charged for Crixivan when it offered the first real breakthrough in AIDS treatment in 1996. TMC114/darunavir is the next drug in line and all eyes will be on it the day its price is announced. Its net price must include the cost of a booster drug, Norvir from Abbott Labs, whose price was recently increased by 400% in another demonstration of reckless civic behavior by a pharmaceutical company. While Tibotec isn’t responsible for the price increases taken by others, it is responsible for the decision to use the Norvir booster. Tibotec now has two choices. It can either follow in the footsteps its predecessors, defying the needs of patients and taxpayers, or it can make a bold statement that shows that the industry will do its part to restrain the cost of healthcare. Make the wrong choice and all of the company’s efforts to maintain strong relationships with the government and the community will have been for naught. The cycle of ever increasing costs, and ever higher profits, will once again be validated. Is this the legacy that Tibotec wishes to create?

Since it was formed in 1998, the Fair Pricing Coalition has sought drug pricing that is cost neutral. We seek to avoid having each new drug push the cost of treatment upward. In the case of TMC114/darunavir, this leads to a very specific demand: we ask that the price charged for TMC114/darunavir should be less than or equal to the current price of Kaletra, which is presently the best selling protease inhibitor and the drug that TMC114/darunavir is most likely to replace in clinical practice. Since Tibotec has chosen to use a ritonavir booster to improve the bioavailability of TMC114/darunavir, the price must include its cost, just as the ritonavir booster is already included in the price of Kaletra.

We also expect substantial discounts over and above the minimum required by law for the AIDS Drug Assistance Program and other government payers. We trust that separate negotiations are underway with the appropriate representatives of those programs, but we hope to establish the baseline for those discussions with the pricing principles laid out here.

We urge the leadership of Tibotec Research, Tibotec Therapeutics, and parent companies Ortho and Johnson & Johnson to give this proposal the most serious possible consideration. We believe that the company will benefit greatly from agreeing to this request. It will establish the company both as a scientific leader and also as a civic leader. It will stand as evidence to the taxpayer and to the Congress that the pharmaceutical industry is capable of more than simply seeking the greatest possible profits without regard for the impact on society. Perhaps most importantly, it will be welcomed and appreciated by the people with HIV and the medical professionals who treat them. It will almost certainly generate positive press about a “new, more responsible attitude” by industry. And, we believe, it will encourage the fastest possible uptake of the drug into clinical practice. Tibotec is aware, no doubt, that recent Medicare Part D formulary guidance issued by the Centers for Medicaid and Medicare services, has changed the mechanism for adding newly FDA approved drugs in the six protected classes, including anti-retrovirals, as of April 17, 2006. Any drug approved by the FDA after April 17 must be approved for inclusion in the individual plan formulary by that plan’s Pharmacy and Therapeutics (P & T) committee. Drugs included in a protected class will have a expedited approval time that can take up to 90 days or three months, but there is no guidance suggesting that newly approved drugs in the protected classes must automatically be added to the plan formulary. Each state will likely take price into account along with therapeutic value. Additionally the P& T committees will make decisions as to how to tier new drugs for co-payment amounts. Because of their price, most of the newer anti-retrovirals are tiered in the highest tiers making them unaffordable for many. Therefore, if Tibotec hopes to see a rapid inclusion in formularies, they must price it aggressively. How state authorities and the HIV affected public feel about the pricing of new drugs will contribute to the speed of this process. At the state level, price will almost certainly be a key consideration. Meeting the goal described here will make it possible for the activist community to support the fastest possible acceptance on the formularies.

The payers, Congress, patients and providers are greatly frustrated with the pricing practices of the pharmaceutical industry. While patients and payers are struggling year after year to raise the money needed to obtain access for a growing patient population, the pharmaceutical industry has shown virtually no restraint in its quest for profits and shareholder benefits. Its profitability ranks among the highest of all industries while the percentage of revenues devoted to research and development are at best average. The pharmaceutical industry speaks proudly of the need for a “free market economy” and the benefits of competition, but in fact it behaves more like a group of monopolies. It accepts little or no pressure on prices as a result of competition, the cornerstone of a market driven economy. In the US, the industry funds massive political lobbying to prevent government from negotiating prices for the largest national payers. Unlike other industries, in which high profits are usually the result of the consumers’ selection of outstanding products, the “buyers” of pharmaceutical products have little choice in the selection of products and product quality bears no relationship to the price charged. This coercive relationship between buyer and seller can no longer be tolerated. It must be challenged, whether through consumer protest, eventual price controls, or payer product selection, none of which are very attractive to industry. Make the right choice now and none of these approaches will be necessary.

We will follow-up this letter with continued discussions and one or more face to face meetings with Tibotec. The list of signers supporting this position will be updated weekly.

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