States, Territories Negotiate $65M in Annual Price Concessions for HIV/AIDS Drugs From Eight Pharmaceutical Companies

State and territorial health officials have negotiated about $65 million in annual price concessions from eight major pharmaceutical companies for antiretroviral drugs supplied through their AIDS Drug Assistance Programs, the Wall Street Journal reports (Fuhrmans, Wall Street Journal, 8/6). ADAPs, which are state-managed, federally funded programs, provide HIV treatment to low-income, uninsured and underinsured HIV-positive individuals (Kaiser Daily HIV/AIDS Report, 7/10). About 84,000 HIV-positive people -- one-third of the U.S. market for HIV/AIDS-related drugs -- procure their medications through such programs, which cost about $850 million each year (Wall Street Journal, 8/6). As of June, fifteen states had waiting lists or access restrictions on their ADAPs, and six more states anticipated having to impose new or additional restrictions on their programs in fiscal year 2003, according to a report from the National Alliance of State and Territorial AIDS Directors. ADAP representatives from California, Florida, Maryland, Massachusetts, New Jersey, New York, North Carolina and Texas -- states that collectively account for 75% annual ADAP drug expenditures -- since March have been negotiating with representatives from Bristol-Myers Squibb, Roche, GlaxoSmithKline, Merck, Pfizer, Abbott Laboratories, Boehringer Ingelheim and Gilead Sciences to discuss ways of alleviating the budget shortfalls that state ADAPs are currently facing (Kaiser Daily HIV/AIDS Report, 7/10). The initiative marks the first time that all 56 state and territorial ADAPs have come together to increase their leverage in negotiating price discounts. BMS, which was the last company to reach an agreement with the group, said that its agreement provides as much as $35 million in drug discounts over 20 months, covering the company's five main AIDS-related treatments, including its new protease inhibitor Reyataz.

Price Concessions
For competitive reasons, the companies and ADAP directors agreed not to divulge price concessions and rebates for specific treatments, but the discounts apply to dozens of the most commonly used HIV/AIDS medications, including new medicines such as Roche's Fuzeon (Wall Street Journal, 8/6). The FDA in March approved Fuzeon, which is designed for HIV/AIDS patients who have failed to respond to other medications. The drug costs about $20,000 per patient per year, double the price of the most expensive HIV treatments currently on the market (Kaiser Daily HIV/AIDS Report, 6/2). Twenty-two state programs have added or plan to add Fuzeon to their formularies, and Roche currently is in negotiations to have the drug added to other programs. However, many programs are offering the drug only in limited quantities due to its high price (Wall Street Journal, 8/6). Despite the agreements, some state ADAP officials still have concerns regarding congressional appropriations for the program, which appears to be "far less" than the amount needed for fiscal year 2004, according to a NASTAD release (NASTAD release, 8/5). NASTAD says that it needs an additional $282 million for FY 2004 in order to avoid waiting lists and additional restrictions, but budget talks in Congress so far have called for only a $25 to $38 million increase over FY 2003 spending, according to the Journal (Wall Street Journal, 8/6). Dwayne Haught, ADAP coordinator for Texas, said, "We were disappointed with last year's federal appropriation for ADAP and this year's appears bleak as well. The manufacturers have stepped forward to at least partially fill the hole left by the federal budget" (NASTAD release, 8/5).