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.
Click here for Part 2 of this article: Ritonavir price increase: what are the consequences for 2004?