Merck’s New AIDS Drug Has Promise — if It Isn’t Too Pricey
Wall St Journal
By SARAH RUBENSTEIN
October 11, 2007; Page B1
Merck & Co. could break new ground on the AIDS-fighting front this week with the Food and Drug Administration’s expected approval of Isentress, a new type of drug that could be especially useful for patients who no longer respond to many existing treatments. Yet despite the continuing need and market for HIV treatments, and doctors’ enthusiasm about the drug’s prospects, it’s no sure thing that Isentress will pay off for Merck.
A major factor is pricing, yet to be determined and especially important because of the recent arrival of several other drugs to fight HIV, the virus that causes AIDS. Pfizer Inc.’s Selzentry, which won regulatory approval this summer, costs about $10,600 a year wholesale. Roche Holding AG’s Fuzeon, which came out in 2003, costs about $24,500 a year wholesale, much higher than many other AIDS drugs. And Johnson & Johnson came out with Prezista last year and may win approval of another HIV drug in early 2008.
Merck declines to discuss pricing ahead of an FDA decision. But if the company were to price Isentress at the high end of the range, “there’s no way the system could handle that,” says Lanny Cross, a former director of the New York AIDS Drug Assistance Program and a consultant for the National Alliance of State and Territorial AIDS Directors.
Martin Delaney, a longtime AIDS activist, who has participated in price negotiations with Merck on behalf of a group called the Fair Pricing Coalition, says the company has shown sensitivity to patients’ financial needs in the past. But he says Merck officials have been “arguing they need to get profitability.” He says Merck has indicated it wants to price Isentress in the range of relatively new AIDS drugs such as Prezista and Bristol-Myers Squibb Co.’s Reyataz, both of which cost around $9,500 a year wholesale, according to their makers. He also says Merck has told him it has spent close to $2 billion on HIV research.
Isentress arrives at a time when Merck has just one other HIV drug in clinical trials, at the earliest stage of such testing. And it is just weeks after Merck’s leading experimental AIDS vaccine collapsed in a clinical trial. Isentress represents a chance for Merck to show it is still a major player in this arena despite a years-long gap since it last brought a new drug to counter HIV to the market. Some doctors are excited by Isentress’s potential, in particular because the pill represents a new way to attack a virus that has managed to develop resistance to many other drugs.
An advisory panel of outside medical experts last month said the data support FDA approval of Isentress for patients who have failed treatment with other HIV drugs. The agency isn’t required to follow such panels’ advice, but usually does.
Merck may find it difficult to sell Isentress at the highest price possible when many public-assistance programs that help pay for HIV treatments are experiencing fiscal strain. In the 2006 fiscal year, 20 out of nearly 60 AIDS Drug Assistance Programs saw their budgets decrease, according to the Kaiser Family Foundation, a nonprofit health-policy research group in Menlo Park, Calif. Such programs bought drugs for nearly 100,000 HIV patients in 2006 and provided insurance coverage for thousands more, according to Kaiser.
Merck declines to specify how much it spent to develop Isentress or to research other HIV drugs, beyond saying it has spent “hundreds of millions of dollars” on such work. “We believe [HIV research] is the right thing to do,” says Robin Isaacs, the Whitehouse Station, N.J., company’s executive director of infectious-disease clinical research. “We are hopeful that will translate into return on investment for our shareholders.”
While Merck is viewed by many in the AIDS community as one of the major drug makers most committed to HIV research, revenue from such products currently represents a modicum of Merck’s total revenue, which amounted to $22.64 billion last year. The company drew a combined $327 million from sales of Crixivan, an HIV drug from the mid-1990s that is no longer used widely, and Stocrin, which Merck sells overseas.
Isentress could provide a bottom-line boost, though it doesn’t carry the potential of some major Merck products such as asthma-drug Singulair, which had $3.58 billion of sales last year. Credit Suisse drug analyst Catherine Arnold estimates Merck’s annual sales of Isentress could be $500 million world-wide by 2012, and likely more if used in a broad swath of patients. Merck is an investment-banking client of Credit Suisse.
Another factor influencing Isentress’s prospects is whether doctors will prescribe it for patients in early stages of HIV treatment. The FDA advisory panel debated how early in a patient’s treatment to approve Isentress use, given that most patients in Merck’s trials had used a number of drugs already. It will be up to the FDA to make that determination — though doctors would be permitted to prescribe Isentress “off label” at any point in treatment.
About two-dozen HIV drugs are now available, most of which block two enzymes that HIV uses to replicate in the body: protease and reverse transcriptase. Isentress, known generically as raltegravir, would be the first drug on the market to target a third enzyme — integrase — that helps the virus insert its DNA into that of human cells.
Because HIV mutates quickly to outwit drugs, cocktails of three medications are typically used to simultaneously attack the virus in different spots. Patients tend to change drugs as their virus adapts. Isentress would be taken along with other drugs.
Merck’s late-stage studies of Isentress involved patients who had been receiving HIV treatment for a median of 10 years, had virus resistant to at least one drug in each of three major classes of HIV drugs and showed evidence the virus was continuing to replicate in their bodies. In other words, they were already sick or in danger of becoming sick soon.
“Since this drug seems to be very effective and pretty well tolerated, I think [there is] potential for it to move in and take territory” from some older drugs, says Judith Feinberg, a leader of the AIDS clinical-trials unit at the University of Cincinnati College of Medicine who served on the advisory panel.
However, she said some doctors may be uncomfortable prescribing Isentress more broadly until further studies are complete. Merck is currently conducting late-stage Isentress studies in patients who are new to HIV treatment. The company expects to have the results toward the end of 2008. Dr. Feinberg says she had no ties to Merck at the time of the panel hearing but has since agreed to give talks sponsored by the company.
Isentress will be used principally in “patients who have tried a whole raft of drugs,” says Daniel Kuritzkes, director of AIDS research at Brigham and Women’s Hospital in Boston, who consults for Merck and other HIV-drug makers. However, “for patients who have earlier stages of disease, there will be some tendency to hold off because it’s so useful in patients with extensive treatment experience.”
Another potential complication is that Isentress is taken twice a day, while some new patients take a once-a-day pill called Atripla that combines three drugs. That could make it tougher to get patients to take Isentress from the beginning.
While Merck has little else for HIV in clinical trials, research-and-development chief Peter Kim says the company is committed to pursuing HIV treatments, and continues to do research related to the integrase enzyme.
“We really do think that this drug-resistance issue is going to continue to be a significant unmet medical need,” Dr. Kim says.