And so the battle begins. As soon as Gilead Sciences announced that the price for its newly approved Stribild HIV medication – a once-daily combination pill – would be $28,500 annually, some AIDS activists threatened to take action to find a way to lower the cost. Now, the AIDS Healthcare Foundation is angling to place a referendum in front of San Francisco voters to require city officials to hold talks with drugmakers about pricing for ‘essential medicines.’
“We have a financial crisis in our country. Even as we’re counting down to implement the Affordable Care Act, we see rationing for HIV patients over the last several years,” AHF president Michael Weinstein says. “…The cost is totally unsustainable… And the net effect of this pricing is, basically, a future bankruptcy of the AIDS Drug Assistance Programs.”
Also known as ADAPs, these state programs provide meds to those with limited means, but are under financial pressure thanks to the recession. As of August 9, there were 1,125 individuals on ADAP waiting lists in seven states, according to the National Alliance of State & Territorial AIDS Directors. This is a 63 percent drop from April. Nonetheless, 21 ADAPs, including seven with current waiting lists, have instituted additional cost-cutting steps over the past three years and two ADAPs are considering new or additional measures by March 2013 (read here).
Such concerns earlier this month prompted 14 Democratic members of Congress to write Gilead to caution the drugmaker about Stribild pricing. They noted that, while Gilead froze prices through 2013 for drugs provided to ADAPs, the drugmaker boosted prices for its meds in the commercial market, which could cause Ryan White Part B-funded co-pays and deductibles to rise and leave less funding available for ADAP (back story).
A key complaint that activists have about Stribild pricing is that the drug is not considered much of a medical advance over Atripla, another once-daily Gilead pill that costs several thousand dollars less. In clinical trials, as many as 90 percent of those on Stribild had undetectable amounts of HIV in their blood after 48 weeks, compared to 84 percent treated with Atripla and 87 percent treated with a combination of Truvada, another Gilead drug; Norvir, which is sold by Abbott Laboratories; and Reyataz, a Bristol-Myers Squibb drug. “This new drug is not an improvement over preivous drugs in any significant way we felt the cost shouldn’t be any higher,” says Weinstein.
But unlike Atripla and another HIV combination treatment called Complera, each of which contain a Gilead medicine, Stribild contains only Gilead compounds. This means the biotech does not need to split the revenue with other drug makers and analysts at GlobalData note this is a significant advantage as Gilead eventually faces a growing threat from generics.
Add in the convenience Stribild offers and fewer psychiatric side effects than Atripla, these factors prompted some Wall Street analysts to forecast that Stribild can notch as much as $2.7 billion in revenue by 2016. Although Stribild costs 33 percent more than the list price for Atripla, RW Baird analyst Thomas Russo called the pricing appropriate, noting the cost is similar to other, less convenient, multi-tablet HIV regimens.
Of course, ringing the register will also depend on insurance coverage. AHF, for instance, is calling for insurers to require prior authorization for Stribild prescribing, which would create an additional hurdle before prescriptions can be filled and may slow the revenue growth. Whether this will actually become a payer policy, however, remains to be seen. Meanwhile, Gilead is offering a patient assistance program
But AHF vows to place a referendum on the San Francisco ballot in time for a vote in November 2013. To do so, the organization will need to gather some 9,700 signatures by next summer. But why San Francisco? The city has a very large population of people who are HIV infected and drug prices have a significant impact on its finances, according to AHF, which uses this language in its proposed referendum (which you can read here).
“We believe an initiative in San Francisco will send a powerful message to Congress, state legislatures and, most of all, to the pharmaceutical industry that they’ve gone too far,” says Weinstein. “… We need to focus (public attention) on what robber barons Gilead has become… The price (for Stribild) is higher than the income of the majority of people who (might) take it.”