Killer Pricing


The long-awaited breakthrough in AIDS treatment is finally here. In mid March, the Food and Drug Administration approved Fuzeon, the first drug in the first new class of anti-HIV medications to be introduced in more than seven years. Fuzeon is like a dream for some 150,000 people—the roughly 30 percent of those on HIV medication who are resistant to existing antiretrovirals and are running out of treatment options.

But Fuzeon may remain just a fantasy for the poor and uninsured. Priced at a staggering $19,990 for a year’s supply, the first of the new “fusion inhibitors” is by far the most expensive AIDS medication ever made. Compare it to a year’s worth of three antiviral drugs, say Crixivan, Zerit, and DDI, a typical combination that totals between $10,000 and $12,000 per year. Then realize that Fuzeon is supposed to be taken along with those or other antiviral meds, bringing the tab for one year’s worth of treatment to upward of $30,000, and you’ll see why the wonder drug is setting off one of the stickiest ethical AIDS crises yet.

“Only rich people will be able to survive AIDS beyond a certain threshold now,” warns Clint Trout, associate director of federal government affairs at the AIDS Healthcare Foundation in Los Angeles. “There’s no way government programs can absorb the cost of this drug. With the state budget crises, the money just isn’t there.”

Indeed, in its first weeks on the market, Fuzeon—of which, because of limited raw materials, there will only be enough to treat 8,000 to 10,000 patients this year—seems to be scarcest for the people with the least money. Most state Medicaid programs, which insure the poor, have agreed to cover Fuzeon, but budget cuts may make that impossible. And while 94 percent of the largest private health insurers have agreed to pay for the drug at least as a last resort, the country’s largest purchasers of AIDS meds, which serve the poor and uninsured, are far less likely to cover it. Only a quarter of the state AIDS Drug Assistance Programs, which use federal and state funds to pay for antiviral meds for more than 135,000 HIV-infected people, have added Fuzeon to their formularies. And that’s after Roche, which is marketing Fuzeon, agreed to sell it to ADAPs at an undisclosed discount. (In mid May, just days after that decision, New York’s program began covering Fuzeon.)

Even before Fuzeon came on the scene, ADAPs were already struggling. As of February, 16 of the programs had either closed enrollment to new clients, reduced the number of drugs they supply, or limited access to new anti-HIV medications. (New York’s ADAP restricted its list of drugs.) Now Fuzeon may push the safety net of drug providers to the brink. William E. Arnold, director of the ADAP Working Group in Washington, D.C., estimates that Fuzeon will cost ADAPs $28 million in the current fiscal year. “That will force every state to go make triage decisions,” says Arnold. Morally and ethically, that’s no place to go.”

The last time a drug was introduced at such an inaccessible price, it set off a furor: ACT UP members chained themselves to a balcony in the stock exchange and took over drug company offices to protest AZT’s then exorbitant price of $10,000 a year. This time, a coalition of 29 AIDS organizations has petitioned Roche and Trimeris, Inc. to lower the drug’s price. But the two companies that developed and are now marketing Fuzeon together seem unlikely to change course, blaming Fuzeon’s whopping price tag on its complicated, 106-step manufacturing process. “We really are charging the price that we must charge,” insists Roche spokesperson Heather Van Ness. Just one batch of Fuzeon takes six months and the work of hundreds of people to make, according to Van Ness, who says the companies invested more than $600 million in Fuzeon’s development.

There is no way to verify the companies’ precise manufacturing costs, but whatever they are, the companies should more than recoup them as early as next year, according to industry analysts. By 2005, the drug’s profits will likely be around $800 million, says pharmaceutical specialist David Bouchey of C.E. Unterberg, Towbin. If Roche decides to build another manufacturing plant, allowing it to double its production, Bouchey says, Fuzeon could easily end up in blockbuster drug territory, reserved for pharmaceuticals that make $1 billion or more.

The prospect of companies making so much money while desperate patients are left out in the cold is at the heart of the uproar over Fuzeon. While rage helped bring the price of AZT down from $10,000 to $3,600 per year in the U.S. and pave the way for generic versions to be sold in some countries for a mere $300 per year, affordable prices for Fuzeon are likely still far off. At this point, no one is even discussing the possibility of distribution in poor countries; generic companies don’t yet know how to copy the drug, and even with the U.S. promising $15 billion to fight AIDS in Africa and the Caribbean, there isn’t nearly enough money in those regions to buy it. Activists, who fear the price tag has raised the bar for what drug companies might charge for future AIDS drugs, may ultimately get Fuzeon’s price down. But, for now, urgent demand and a limited supply mean that the drug will elude many even in this country.