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FLYERS ABOUT PRICE INCREASE
CHART ON PRICE INCREASE IMPACT from AIDS Treatment Data Network
ARTICLES ABOUT PRICE INCREASE
http://www.aidsmap.com/news/newsdisplay2.asp?newsId=2466
18 December 2003
Keith Alcorn
US doctors plan cross the board Abbott product boycott after 400% ritonavir
price hike
Abbott Laboratories is facing mounting criticism following its decision to
quadruple the price of ritonavir Norvir in the United States. The company emphasises
that the price rise only applies to the US, not to Europe.
An Abbott spokesperson told aidsmap that the price rise "reflects the value that Norvir brings to combination therapy", and argued that the price rise is necessary in order to support investment in new formulations of Kaletra and Norvir that will not require refrigeration, together with a new HIV protease inhibitor in preclinical development. The company also claims that much of the cost of research that has established ritonavir's value as a pharmacokinetic enhancer of other protease inhibitors has been borne by Abbott, an assertion strongly disputed by other companies.
Ritonavir is now used almost entirely to boost levels of other protease inhibitors. The effect of the price increase will be to make Abbott’s product Kaletra (a combination capsule containing lopinavir and ritonavir) the cheapest boosted protease inhibitor on the market.
However, the move is likely to hurt Abbott in other product areas. Outraged US and UK HIV specialists are planning a boycott of Abbott products across all disease areas, designed to ensure that Abbott will lose financially in areas where customers have a choice of product.
Dr Graeme Moyle of the Chelsea and Westminster Hospital told aidsmap: "HIV physicians are very unhappy about this decision and the implications it has on treatment choice and the development of new drugs such as tipranavir and capravirine.
"Physicians are looking at ways we can bring our discontent home to Abbott, including talking to our formulary committees and other physicians about limiting the use of all Abbott drugs and diagnostics and where feasible substituting alternative agents."
Dr Moyle also suggested that the symbiotic relationship between industry and medical community could be fractured by the announcement. He said that some clinicians were considering whether to boycott Abbott meetings and speaking engagements connected with Abbott products, and were even considering a go-slow on recruitment of patients to Abbott studies.
In an open letter issued today, Paul Volberding and Dan Kuritzkes of the US HIV Medicine Association asked Abbott to rescind the price increase. Reflecting a widespread concern over the longer-term implications of the price increase amongst US and British physicians, Dr Joe Eron of the University of North Carolina told aidsmap: "While I understand the business perspective I am dismayed that this happened. This move has dramatic implications for programmes that have limited funding such as Medicaid, and ADAP in some states."
How much?!!
On December 3rd Abbott informed customers that the wholesale price of ritonavir had increased from $205.74 to $1028.71 for 120 100mg capsules - the equivalent of $515 a month if ritonavir is being dosed at 100mg twice daily with another protease inhibitor. The previous cost of the drug lay around $100 - $110 a month when dosing at 100mg twice daily. However, the actual cost to the most vulnerable consumers in the United States - those without insurance who must pay directly for their medicines - is unpredictable due to the complex discounts and charging structures that operate between pharmacies (click here for further information on this issue.
US treatment advocates meeting last week in Phoenix, Arizona, accused Abbott of "feeding off the bones of Medicaid and state ADAPs like a vulture", according to a flyer circulating at the meeting.
However, Abbott says that 90% of US patients will not be affected by the price increase because they are covered by medical insurance of some sort, and any patient who cannot afford Norvir, or whose insurer refuses to cover the cost of the drug, will be able to receive free medication. The company also promises to drop the onerous means testing requirement, in which patients have to provide detailed proof of income for all family members in order to receive the drug free of charge (although at the time of publication, patient assistance information published by Abbott continued to require detailed proof of income and did not inform applicants of the change with respect to Norvir).
Abbott also says that the price of Norvir will remain neutral for public payers, including state Medicaid programs. Drug companies are only allowed to increase the prices they charge public payors by the rate of inflation each year. The cost to state AIDS Drug Assistance Programs (ADAPs) has also been frozen at the old price until March 2005, when the entire funding structure for ADAPs is due to be reviewed by the US Congress.
However, a price hike is possible after this point for both Medicaid and ADAPs, since new formulations of Kaletra and Norvir are promised by 2005. Abbott would be free to charge a higher price to these programmes for a new formulation of Norvir, and might agree in return to offer generous discounts in return for the ability to charge substantially more for Norvir than the current Medicaid price.
The HIV Medicine Association said today: "This increase comes at a time when public programs that provide access to HIV treatment are struggling to keep costs down, and numerous ADAPs have been forced to impose eligibility and formulary restrictions and/or waiting lists". Even though the price for ADAPs has been frozen, pharmacies will bill ADAPs at the new price, leaving them to collect a rebate from the manufacturer. This will take up to six months, HIVMA warns, and could leave state ADAPs in a very difficult financial position.
http://www.aidsmap.com/news/newsdisplay2.asp?newsId=2477
18 December 2003
Keith Alcorn
Ritonavir price increase: what are the consequences in 2004?
Consequences for competitors
This article is part 2 of a two part article. Click here to view part 1.
Although Abbott is trying to downplay the consequences of the ritonavir price increase that took effect on December 4th, pointing to the arrangements made to protect patients and payers from the price shock, a company spokesperson was unrepentant when questioned on the effect of the ritonavir price increase on the cost of other boosted protease inhibitors.
"Other companies must look to their own pricing," said Ann Fahey-Widman of Abbott Laboratories Public Affairs division. "If you're asking about the pricing of another product, you need to call that company and ask about its pricing."
The effect of the price increase is indeed likely to focus attention on the pricing of all new HIV drugs, and will be particularly troubling for the development of tipranavir, a new protease inhibitor which must be boosted with a total of 400mg of ritonavir each day. Tipranavir’s manufacturer Boehringer Ingelheim is widely believed to be contemplating a price for tipranavir that would lie somewhere close to the cost of the new fusion inhibitor Fuzeon (T-20) (around $20,000 a year).
Abbott’s price increase will add approximately $9,000 to the cost of using tipranavir, forcing Boehringer Ingelheim either to cut the price of tipranavir drastically, or limp to market with a product that will cost almost 40% more than Fuzeon (a drug which took many state ADAP programmes to the brink of bankruptcy and forced many states to introduce waiting lists for medications).
The move is also being interpreted as a bid to see off competition in the protease inhibitor market from Bristol Myers-Squibb’s Reyataz (atazanavir). Reyataz costs around $700 a month, and boosting once daily with 100mg of ritonavir added around $50 to this cost prior to the price increase. Until last week, ritonavir-boosted Reyataz was slightly more expensive than Kaletra. The effect of the price increase is to push the cost of ritonavir-boosted Reyataz up by at least $260 a month, making it substantially more expensive than Kaletra.
However. Dr Mike Youle of London's Royal Free Hospital believes that Abbott's action could have an unintended effect on Bristol Myers Squibb's atazanavir development strategy. "This makes it much more attractive for BMS to study the use of atazanavir 600mg as an alternative to Kaletra, since you may achieve very good blood levels at that dose without the need for ritonavir boosting." Bristol Myers Squibb shelved investigation of a 600mg dose after phase II studies showed a higher rate of treatment-limiting hyperbilirubinemia at that dose.
The price increase will have an even more inflationary effect on the cost of Lexiva, the new formulation of amprenavir recently approved in the United States. A license for Lexiva was granted with the recommendation that it should be boosted with ritonavir when used in treatment-experienced patients, at a dose of 700mg of Lexiva and 100mg of ritonavir twice daily. That’s an extra $400-plus a month for any patient who needs amprenavir due to their drug resistance pattern. To dose it once daily would be just as expensive.
Abbott's competitors are also angered by the company's assertion that it must recoup the development costs of research into ritonavir's role as a booster for other company's protease inhibitors.
"In the case of saquinavir, it was Roche who funded the studies into boosting of saquinavir with low dose ritonavir, from 1997 onwards," Andrew Hill of Roche told aidsmap. "The MaxCmin trials were funded 100% by Roche, as were several other clinical trials. Roche has funded trials with the Chelsea and Westminster Hospital in London looking at low dose ritonavir boosting double boosted combinations (atazanavir/SQV/r, fosamprenavir/saquinavir/ritonavir). Roche has also funded research into mechanisms of boosting with alternative drugs, such as ketoconazole and itraconazole [which showed that ritonavir was a superior boosting agent]. The combined cost of this work to Roche is over US $12 million."
The same holds true for Abbott's other competitors. The BEST and HIVNAT 005 trials of indinavir/ritonavir 800/100 mg were funded mainly by Merck, and the CONTEXT, NEAT and SOLO trials of amprenavir/ritonavir were funded by GlaxoSmithKline. Research into use of tipranavir with ritonavir is funded by Boehringer-Ingelheim.
How long before Europe faces a similar price hike?
Although Abbott has assured physicians and community groups in the UK that the price rise only applies to the United States, there is mounting anxiety across Europe that Abbott will seek to price its new formulations, especially Norvir, at much higher levels. Publicly funded health care budgets in Europe may not have the same resilience as US insurance funds when it comes to a large hike in the price of Norvir.
Concern in the UK focuses on the rising cost of salvage therapy, particularly where T-20 and tipranavir might be used together. Some clinicians doubt whether such treatment would be considered cost-effective by NHS purchasers if its annual cost approached £30,000 a year. Recent research based on the TORO 1 and 2 studies of T-20 showed that in advanced HIV patients, the cost per quality adjusted life year of a regimen containing T-20 was £23,200. Forcing the price of other drugs up to the T-20 level, they argue, would make salvage therapy for HIV infection unattractive to the NHS in comparison to other competing claims.
What's it all about?
"People who need salvage regimens are under attack," said Bob Huff, editor of GMHC’s Treatment Issues, a leading treatment newsletter in the United States.
Abbott insists that the price rise is not aimed at fixing its competitors, but at delivering better drugs for patients.
Others see a longer range plan to destabilise the protease inhibitor marketplace by changing the economics of treatment at the very moment when promising data on the use of single-boosted protease inhibitors as maintenance treatment, on dual boosted protease inhibitor treatment and on nucleoside analogue-sparing regimens are beginning to trickle out.
"This isn't just an attack on competitors' pricing, it's an attack on their research strategies. Why bother investing in these areas if Abbott has effectively priced you out of the market in the US?", one pharmaceutical company research scientist told aidsmap.
By pricing others out of the market, Abbott will effectively shape the evidence base in such a way as to ensure that all roads lead to its products, he argues.
"It's a scary abuse of monopoly," he went on, suggesting that all other research into single boosted protease inhibitors and any dual boosted protease inhibitor that excludes Kaletra will grind to a halt.
Is one company to blame?
The dispute plays into a wider debate beginning to take shape in the US, over the extent to which the pharmaceutical industry should be free to set prices. In the UK, the pharmaceutical industry has been warned that the days of the blank cheque may be over, and in many other developed world countries, spiralling drug costs are forcing tougher negotiations over price.
A recent report on HIV drug pricing by the market research company Datamonitor points out: "An influx of new products will require manufacturers to justify setting relatively high price points to sustain profitability in the face of increasing competition."
A collision between the needs of the pharmaceutical industry (for profit and shareholder value), governments (to make tax revenue go further) and patients (for life-sustaining treatment) is fast approaching in North America and Europe, and there are only two possible solutions.
One is a complete overhaul of the profit structure in the pharmaceutical sector, leading at one end of the spectrum to the consolidation of the pharmaceutical sector into a handful of key players, or at the other end to the breakup of big pharma and the advent of a writer/publisher type arrangement, as proposed by the Consumer Project on Technology, in which biotech companies invent drugs and multiple generic manufacturers compete to license those products, with phase III and IV research funded by health maintenance organisations and public payers who seek to define which drugs represent best value.
The other is stricter regulation of price without any structural change in the industry, as proposed recently by The Economist, by which governments reward genuine innovation with higher prices but force drug companies to submit to tighter price regulation.
Either way, a more sophisticated conversation about value and pricing between industry, doctors and patients will be forced to evolve in the next few years.
HIVMA Asks Abbott to Reconsider Price Hike
The HIV Medicine Association (HIVMA) today called on Abbott Laboratories to rescind its recent 500 percent price hike of ritonavir (Norvir®), a drug necessary to the success of virtually all protease inhibitor combinations for treating HIV infection.
Although ritonavir has little anti-HIV activity of its own at currently used doses, it has become an essential part of many protease inhibitor combinations because it enhances the effect of other anti-HIV drugs. The new pricing means that ritonavir-boosted drug combinations will likely become substantially more expensive.
“While we recognize the value of ritonavir, we are alarmed by your decision to raise the cost of protease inhibitor regimens to the point where many people who need these life-saving drug combinations will struggle to pay for them or won’t have access to them at all,” said Paul Volberding, MD, chairman, and Daniel Kuritzkes, MD, vice-chairman, of the HIVMA Board of Directors, in a letter to Abbott. “In addition to our particular concern about the price increase for ritonavir, we are generally concerned about continuing upward pressure on prices as each new HIV drug is approved.”
The letter acknowledges the important role Abbott played in developing “boosted” protease inhibitor regimens, but asks the drug manufacturer to consider the following detrimental effects of the price hike:
The decision increases the Average Wholesale Price of ritonavir to $8.55 for 100 mg, which equates to a monthly total of $260 for patients who take 100 mg daily as part of an ATV/RTV regimen. Previously, the monthly price was $45.
This much higher cost will likely raise insurance premiums and increase the amount of individuals’ co-payments for ritonavir—co-payments that most people with HIV/AIDS can ill afford.
The dramatic increase in price could cause payors to impose restrictions on available HIV/AIDS therapies.
AIDS Drug Assistance Programs (ADAPs) may have to pay more. The price increase will result in higher profits to the pharmacy and wholesaler, which will translate into higher costs to ADAPs, if the reimbursement rate used for pharmacies is indexed to the Average Wholesale Price.
The price hike may create budget problems for ADAPs, since the lag time between
payments to pharmacies and receipt of rebates from the manufacturer can be
as long as six months.
“
This increase comes at a time when public programs that provide access to HIV
treatment are struggling to keep costs down, and numerous ADAPs have been forced
to impose eligibility and formulary restrictions and/or waiting lists,” the
HIVMA letter concludes. “We are deeply disappointed that Abbott has taken
a step that will increase costs to these vital safety net programs. On behalf
of our members and their patients, we urge you to rescind the price increase
for ritonavir.”
The HIV Medicine Association (HIVMA) is the professional home for more than 2,600 physicians, scientists and other health care professionals dedicated to the field of HIV/AIDS, not only those trained in infectious diseases. The Association promotes quality in HIV care and advocates for policies that ensure a comprehensive and humane response to the AIDS pandemic informed by science and social justice.
Jeff Devlin
HIV Marketing Director
Abbott Laboratories
200 Abbott Park Road
Abbott Park, IL 60064-6182
Sent via fax to: 847-935-3305
Dear Mr. Devlin:
We are writing on behalf of the Board of Directors of the HIV Medicine Association to urge you to reconsider the recent 500 percent price increase of ritonavir (Norvir®), a drug which as you know is necessary to the success of virtually all protease inhibitor combinations for the treatment of HIV infection. The HIV Medicine Association (HIVMA) represents 2,600 physicians and other health care providers who practice HIV medicine. While we recognize the value of ritonavir, we are alarmed by your decision to raise the cost of protease inhibitor (PI) regimens to the point where many people who need these life-saving drug combinations will struggle to pay for them or will not have access to them at all. In addition to our particular concern about the price increase for ritonavir, we are generally concerned about continuing upward pressure on prices as each new HIV drug is approved.
We appreciate the costs and complexities involved in developing and marketing pharmaceutical products, and your company’s obligation to its shareholders. We also acknowledge the important role that Abbott investigators have played in studying the use of ritonavir as a CYP 3A4 inhibitor and its role in “boosted” PI regimens. Nevertheless, it is critical that the implications of your action on access to the majority of treatment regimens available to persons living with HIV/AIDS in the U.S. be given paramount consideration. In particular, we want to bring to your attention the following:
This decision increases the Average Wholesale Price of ritonavir to $8.55 for 100 mg, which equates to a monthly total of $260 for patients who take 100 mg daily. Previously, the monthly price for these patients was $45.
The new pricing places the cost of ritonavir on a par with that of a number of other protease inhibitors. Whereas ritonavir is an essential component of many boosted protease inhibitor regimens, at currently used doses for boosting (100 mg daily or twice daily) the drug has little or no anti-HIV activity of its own. Therefore, the pricing of this boosted dose of ritonavir at the same level as fully active antiretroviral agents is difficult to support.
This much higher cost will likely raise insurance premium payments and increase the amount of individuals’ co-payments for ritonavir—co-payments that most people with HIV/AIDS can ill afford.
It is conceivable that this dramatic increase in price of ritonavir could
result in the imposition of restrictions on available HIV/AIDS therapies
by payors.
We have grave concerns about this precedent and its impact on our patients.
Although Abbott has assured state AIDS Drug Assistance Programs (ADAPs)
that they will be held harmless from the price hike, ADAPs will in fact
experience
additional costs as a result of this action. The price increase will result
in higher profits to the pharmacy and wholesaler, which will translate
into higher costs to ADAP programs, if the reimbursement rate used for
pharmacies
is indexed to the Average Wholesale Price. The price increase may create
budget problems for ADAP programs, since the lag time between payments
to pharmacies
and receipt of rebates from the manufacturer can be as long as six months.
This increase comes at a time when public programs that provide access to HIV treatment are struggling to keep costs down, and numerous ADAP programs have been forced to impose eligibility and formulary restrictions and/or waiting lists. We are deeply disappointed that Abbott has taken a step that will increase costs to these vital safety net programs.
On behalf of our members and their patients, we urge you to rescind the price increase for ritonavir.
Sincerely,
Paul Volberding, MD Daniel R. Kuritzkes, MD
Chairman Vice-Chairman
HIVMA Board of Directors HIVMA Board of Directors
cc: Paul Kelly, Senior Product Manager
HEALTH
Abbott Lifts Price of Norvir 400%
Cost of Longtime HIV Drug
Jumps, Reigniting Debate
Over Drug Pricing Policies
By VANESSA FUHRMANS
Staff Reporter of THE WALL STREET JOURNAL
Abbott Laboratories has raised the U.S. price of a key AIDS drug by
400%, a move that could roil the market for HIV treatments and has
already reignited the debate over drug pricing policies.
The medication is called Norvir, a protease inhibitor that hasn't been
a lucrative seller for Abbott but is widely used in small doses to
boost the potency of some AIDS combination-drug therapies. Earlier
this month, the Abbott Park, Ill., company notified doctors, AIDS
groups and pharmacies that it would raise Norvir's wholesale price for
a month's treatment to $265 from $54. The increase, Abbott
Laboratories says, adjusts Norvir's price to better reflect the drug's
importance in treating AIDS and the costs for improving Norvir's
formulation.
The increase triggered a furor that is fast gaining intensity. Because
of the special booster role that Norvir plays in HIV treatment,
Abbott's move sharply raises the price of a number of combination
regimens, which already usually cost between $800 and $1,300 a month.
Critics say Abbott's intention is to push patients away from using
Norvir in drug cocktails and switch to its newer AIDS treatment,
Kaletra, instead. That would also have the effect of gaining market
share for Abbott. Norvir typically is used with other drugs including
either Bristol-Myers Squibb Co.'s Reyataz or GlaxoSmithKline PLC's
Lexiva. Kaletra, which includes Norvir, is a competitor to both of
those drugs.
Reyataz and Lexiva have been making inroads on Kaletra's market share.
But with Norvir's price jump, drug cocktails using it suddenly become
far costlier than Kaletra. Reyataz's wholesale price is $684 a month
and Lexiva wholesales for $480 a month, compared with Kaletra, which
Abbott has priced at $580 a month wholesale.
Abbott denies it is raising Norvir's price to shift patients to
Kaletra. Rather, the drug maker says, the sharp price increase is a
long-overdue adjustment after years of being priced below other
protease inhibitors, the class of drugs that has transformed the
treatment of AIDS by extending the lives of patients by years. What's
more, the company says it invested a substantial amount in
reformulating the drug a few years ago after problems with its
chemistry temporarily stopped the drug's production.
HIV doctors say they worry that the move could prompt many private
insurers to steer patients away from other cocktails toward Kaletra by
requiring doctors to get special permission to use the more expensive
combination therapies with Norvir.
Or, the higher cost could translate into higher co-payments for
patients who take a more expensive regimen with Norvir. "That's likely
to happen if insurance companies are smart enough to understand what's
happening," said Charles Farthing, chief of medicine at the AIDS
Healthcare Foundation.
The higher price for those combined drugs could influence the
development of future drugs: At least one widely anticipated AIDS
treatment currently is being tested by Germany's Boehringer Ingelheim
GmbH, with the idea that it would be used in combination with Norvir.
Critics also say that Abbott's decision belies the drug industry's
primary rationale for high drug prices -- that pharmaceutical
companies need to recoup their research and development costs and to
fuel innovation. Norvir has been on the market for seven years and has
enjoyed a relatively long product life compared with most AIDS drugs.
"This really puts a lie to the idea that companies set drug prices to
fund their R&D," says Michael Weinstein, president of the AIDS
Healthcare Foundation, an AIDS group that operates clinics in the
U.S., Africa and Central America.
The price increase doesn't affect drugs bought by government programs
such as Medicaid or community clinics or AIDS Drug Assistance
Programs, which collectively cover the majority of Norvir
prescriptions written in the U.S. The state-run drug assistance
programs, or ADAPs, have negotiated price discounts and freezes for
Norvir and other AIDS drugs with companies through the end of 2005.
"We will be very willing to talk through those issues again," when
the
current ADAP price contracts expire, said Melissa Brotz, an Abbott
spokeswoman.
In the past, critics of the drug industry had few complaints about
Abbott's pricing policies. In fact, two months ago, the AIDS
Healthcare Foundation publicly praised the company for a recent
decision to sell Norvir, Kaletra and other drugs at cost in poor
countries. That will continue despite the U.S. cost increase.
Norvir was the second protease inhibitor to come on to the market in
1996 and the first to show that it increased patients' survival
chances. At the time it was priced at $20.52 a day for 1,200
milligrams. But Norvir had harsh side effects for many patients and
doctors discovered that the drug worked better in a lower dose that
boosted the potency of other protease inhibitors. Of the HIV patients
who take Norvir today, 80% use it at the much smaller dose of 100 mg,
which until recently cost $1.75 a day.
Abbott currently has another formulation of Norvir in development that
wouldn't require refrigeration and would allow patients to take in
tablet form -- changes that could help patients better adhere to the
drug regimen. Once the new formulation comes to the market, possibly
in 2005, the company says the price will be close to Norvir's new
price today.
Abbott acknowledges its move has set off a storm of protest. "It's a
decision that we did not take lightly, which is why we reached out to
[AIDS groups] so proactively," Ms. Brotz said.
"They've got a P.R. problem," said Bill Arnold, chairman of the ADAP
working group, which helps advocate for more funding to AIDS Drug
Assistance Programs. With such a huge increase, "people will be livid
about that no matter what."
Write to Vanessa Fuhrmans at [email protected]
Updated December 19, 2003 9:54 a.m.
Critics say move will steer patients to new product
Chicago Tribune, December 20, 2003
By Bruce Japsen
Tribune staff reporter
December 20, 2003
Abbott Laboratories has drawn fire from AIDS activists in the United States for raising the price of its well-known HIV drug by more than 400 percent.
Norvir, one of the earlier treatments for HIV, isn't the top-seller it once was, but it is commonly used to boost the effectiveness of other treatments used in so-called AIDS cocktails, which have been hailed in fighting the deadly disease.
Abbott has raised the wholesale price of Norvir to $8.57 a day, or $257.10 a month, from $1.75 a day, or $52.50 for a 30-day supply, company records show.
The spike has rekindled a heated debate over drug pricing policies and could jeopardize Abbott's otherwise good image in the AIDS community.
The North Chicago-based drug giant has long been among the leaders in providing low-cost AIDS medicines to African countries and a supporter of the HIV research and medical community.
"In the good, the bad and the ugly of the pharmaceutical industry when
it comes to HIV treatment, I would say that, overall, according to many
measures, Abbott is the good," said Michael Weinstein, president of the
Los Angeles-based AIDS Healthcare Foundation. "They have been generous
in supporting efforts in the developing world, and they have been
cooperative in providing discounts. This is uncharacteristic."
With various combinations of treatments already costing up to $1,600 a month, AIDS activists believe Abbott could be encouraging cost-conscious health insurers to force patients to pick Kaletra, Abbott's next-generation AIDS drug.
Kaletra costs about $18.78 a day, or $563.40 a month, the company said. It doesn't need a boost from other drugs to be effective because it includes Norvir as an ingredient, but AIDS activists say Kaletra might not work for all patients.
"This is purely a marketing ploy to push for a larger market share for Kaletra by driving providers and patients to this cheaper Abbott combination therapy," Weinstein said. "The HIV community as a whole should unite and speak out against Abbott's baldfaced greed."
Abbott said its price increase for Norvir is long overdue after years of being priced well below rivals. Norvir, which came on the market in 1996, was one of the first protease inhibitors.
Market share for Norvir slides
Over time, though, Norvir lost market share, as did a lot of the other early AIDS treatments because some patients developed a resistance to them. Abbott scientists developed Kaletra as a replacement for Norvir, and the newer drug became the nation's top-selling protease inhibitor because of its effectiveness.
Since its launch in 2000, Kaletra has surpassed original projections and is expected to generate more than $700 million in worldwide sales this year.
At its peak, Norvir generated about $250 million in annual sales, but last year's revenues were about half that.
Price freeze in place for some
Abbott does not plan to revisit its decision. Furthermore, Abbott and even some AIDS activists admit most patients won't have to pay the huge increase because the company has frozen the price charged to community health centers and government insurers through 2005.
"We didn't take this decision lightly, which is why we froze the price of Norvir to AIDS drug assistance programs through March of 2005 and expanded our patient assistance program to ensure patients who can't afford it continue to have access," Abbott spokeswoman Melissa Brotz said.
"The value of Norvir in HIV treatment has increased dramatically over the last several years, and the new price of Norvir continues to represent a small fraction of the overall cost of an antiviral regimen," she said. "We continue to invest in HIV research both in Norvir and Kaletra and with a third-generation protease inhibitor currently in pre-clinical research."
Today, Norvir is largely prescribed by doctors as a boost to Kaletra rivals such as Bristol-Myers Squibb Co.'s Reyataz, a drug that came on the market this summer. Bristol would not comment about Abbott's move.
Cost might prompt switch
A higher cost for Norvir might force patients to switch to Kaletra, which may not work as well for them or could force them to lose access to medicines altogether, depending on what insurers do, doctors say.
The concern is real, analysts say, because Reyataz costs $22.08 a day, or $662.40 a month, and it was priced higher than Kaletra before Abbott raised the price of Norvir.
Abbott, however, thinks health plans have historically given doctors more latitude when it comes to prescribing HIV drugs that can mean life or death, rather than allergy or heartburn medications considered routine maintenance drugs with ample competition.
Still, health insurance companies increasingly look at ways to restrict access to more expensive treatment regimens, especially given that overall health-care premiums are rising rapidly.
"This much higher cost will likely raise insurance premium payments
and increase the amount of individuals' co-payments for
[Norvir]--co-payments that most people with HIV/AIDS can ill afford," Drs.
Paul Volberding and Daniel Kuritzkes, members of the board of the HIV Medical
Association, said in a letter to Abbott.
ATAC Drug Development Committee Letter to Abbott, December 22, 2003
To: [email protected]
Subject: Norvir
From: [email protected]
Date: Mon, 22 Dec 2003 09:27:42 EST
December 20, 2003
Mr. Miles White
Chief Executive Officer
Abbott Laboratories
100 Abbott Park Rd.
Abbott Park, Illinois 60064-3500
Dear Mr. White:
A recent action by your company has shaken the HIV/AIDS community to its very core, threatening to transform and erode a productive relationship that has evolved between us in combatting this epidemic. The AIDS Treatment Activists Coalition (ATAC) is a national coalition of AIDS activists, many living with HIV/AIDS, working together to end the AIDS epidemic by advancing research on HIV/AIDS. We recently became aware of a price increase of greater than 400% for Abbott's protease inhibitor ritonavir (Norvir). This price increase may well have been the result of overly eager marketing and sales personnel seeing and seizing an opportunity without considering the absolutely appalling effects this move would have on public perception and community/consumer relations.
As you know, Norvir was granted accelerated approval by the U.S. Food and
Drug Administration, based on its encouraging performance in clinical trials
evaluating its effects on both surrogate and clinical markers. When used at
the approved therapeutic dose (600 mg BID), it is associated with significant
toxicities and side effects that render it intolerable for many HIV-positive
individuals. However, the drug has enjoyed continued and growing use, albeit
at
smaller doses, as a pharmacokinetic (PK) booster for other, more tolerable
protease
inhibitors by inhibiting the CYP3A4 hepatic enzymes, which metabolize other
drugs. In fact, Norvir-boosted protease inhibitor therapy has created a novel
therapeutic approach for achieving more potent antiretroviral efficacy,
especially in patients with fewer treatment options, such as "salvage" therapy
patients who harbor resistance to several or many HIV drugs. Consider the example
of
an investigational protease inhibitor tipranavir being developed by
Boehringer Ingelheim, which has effectiveness against resistant virus but which
will
also require boosting with Norvir of up to 400 mg.
Surprisingly, the price of another Abbott drug, Kaletra (itself a Norvir-boosted protease inhibitor) has stayed the same, providing an unquestionable economic advantage to choosing Kaletra over other boosted protease inhibitor regimens (such as the recently approved drugs Reyataz and Lexiva), which may now increase in price by as much as double. The price of boosted tipranavir, if approved, would now be around the price of Fuzeon, an entry inhibitor and the most expensive antiretroviral drug ever developed (around $20,000/year). Does this seem like a rational direction for protease inhibitor-based therapy?
Obviously, this Norvir price increase has implications for salvage therapy
research because potential therapies that require boosting with Norvir may
be
abandoned. Instead of being grateful that Norvir still has therapeutic
application and will enjoy continued sales, Abbott has apparently made an ultimatum
that therapeutic options for salvage patients or even those who just need more
potent therapy (arguably any patient with HIV) will cost, and cost dearly.
Unless, of course, doctors and patients choose Kaletra, which as mentioned
above,
has not increased in price and will be cheaper than other boosted options.
Unfortunately, one drug regimen does not fit all and many patients can benefit
virologically or metabolically from drugs other than Kaletra.
We appreciate the need to remain profitable, especially in uncertain economic
times, but this price increase goes far beyond what is reasonable or
necessary. No degree of research and development justifies this type of increase
for
this type of drug. We understand Abbott's preemptive move to ease restrictions
on its Patient Assistance Program for Norvir. We know that prices for AIDS
Drug Assistance Programs (ADAP) will not be affected until renegotiation in
2005.
However, we cannot accept this unprecedented opportunism in the face of
dwindling resources and growing HIV infections, both domestically and worldwide.
What Abbott has done will affect healthcare resource allocations (public and
private), drug research and development, and patient care and well-being for
decades to come.
Abbott has just changed the landscape of HIV/AIDS for the worse-is this what it wants to be known for? ATAC urges Abbott to reconsider its recent actions and to rejoin the battle against HIV/AIDS by advancing research and therapeutics until this scourge against humanity is conquered. Further, we challenge you to roll back the price of Norvir. Abbott has obviously regained its development costs many times over with this drug, which received full approval on the basis of a minimal development package and without an Expanded Access Program.
We believe that it is in the overall best interests of your company to reconsider this shameful and destructive path. We look forward to learning that you have reversed this inhumane decision as soon as possible. Thank you for your immediate attention to this matter.
Very truly yours,
Lynda Dee & Matt Sharp, Co-Chairs
ATAC, Drug Development Committee