Fair Pricing Coalition Troubled by Unjustified 2017 Drug Price Increases by HIV Pharmaceutical Manufacturers

NEW YORK, NY, February 27, 2017–The Fair Pricing Coalition (FPC) today expressed its dismay and frustration at manufacturers of some of the most frequently prescribed antiretrovirals for treatment of HIV, citing exorbitant Wholesale Acquisition Cost (WAC) price increases ushered in with the new year. The WAC price increases implemented by these industry leaders show complete disregard for an annual FPC year-end appeal, which included an additional 90 organizational and 61 individual signatories.

“Pharmaceutical corporations continue to make annual, sometimes twice-yearly, incremental increases on HIV drugs, and their arguments that the increases are necessary to ensure new drug discovery and don’t contribute to nationwide limitations in care for all are less and less compelling every year,” said FPC Co-chair Emalie Huriaux. “These increases are like a death by a thousand paper cuts, slowly bleeding money from consumers and threatening the ability of people with HIV to access lifesaving treatment. The FPC continues to make this point year after year, and here we are again, addressing unsustainable WAC increases.”

The 2017 WAC price increases for leading antiretrovirals are two to three times the ten-year consumer price index (CPI) average of 2.5 percent; they are also higher than all medical CPI categories, which average 2 to 3 percent and are driven in part by unrestrained drug pricing. “While other companies, such as Apple or Samsung, are also quite profitable, people don’t die from the lack of an iPhone or television,” said Huriaux. “The same cannot be said about medications for people with life-threatening diseases like HIV.”

“What’s really frustrating is the growing trend among manufacturers to shift responsibility for these price increases onto other parties—pharmacy benefit managers retained by insurers to secure lower drug costs, discounts and rebates to public payers, even copay assistance programs,” said FPC Co-chair Tim Horn. “The fact remains, however, that these concessions are necessary primarily because WAC prices are beyond what the market can reasonably bear. Breaking the cycle depends, in large part, on manufacturers lowering their prices.”

Notable WAC price increases reported in January 2017 include ViiV’s 7.9% increase on Triumeq, Tivicay, and Selzentry (no price increase was reported for Epzicom, which now faces generic competition); Gilead’s 6.9% increase on its three TAF-inclusive products, Descovy, Genvoya, and Odefsey, plus two price increases on Atripla totaling 6.6%; Bristol-Myers Squibb’s 6% increase on Reyataz, Sustiva, and Evotaz; AbbVie’s 4.9% increase on Kaletra; Janssen’s 7.9% increase on Intelence, Prezcobix, and Prezista; and Merck’s 7.9% increase on Isentress. The WAC prices for several antiretrovirals, including Atripla, Reyataz, Truvada, Sustiva, and Viread, are now double or triple their launch prices.

“These price increases have real-life consequences,” said FPC member John Peller, President & CEO of AIDS Foundation Chicago. “They drive health insurance premiums higher every year, making it harder for all of us to afford insurance. They force insurance companies to make people pay more for lifesaving medications or add administrative barriers, like prior authorization, that cause endless access delays.”

No increases have been announced so far on the recently developed Direct Acting Antivirals (DAA) for treating the hepatitis C virus (HCV). Those drugs were launched at prices so high that the resulting public outcry led to Congressional hearings.

The FPC notes that all DAA manufacturers, with the exception of Gilead, have negotiated discounts with the ADAP (AIDS Drug Assistance Program) Crisis Task Force. “We applaud the work of the Task Force and the manufacturers that have agreed to provide discounts to ADAPs, thereby making curative DAA treatment much more accessible to people coinfected with HIV and HCV,” said Horn. ADAPs can access these medications at the 340B price, which represents at least a 23.1% discount off of the Average Manufacturers Price. However, even at the 340B price, the Task Force noted in a June 30, 2016, update, prices for Gilead’s HCV treatments are excessive compared with the negotiated prices of other companies.

The FPC submitted its letter with 151 signatories to all of the major HIV and HCV drug manufacturers in November 2016, demanding a price freeze or, if absolutely necessary, no more than one price increase annually, not to exceed the overall increase in the medical CPI for the preceding year. Letters also reiterated the need for more robust company patient savings programs to offset skyrocketing out-of-pocket costs associated with these expensive medications being placed in specialty drug tiers, and cited increasing U.S. government opposition to excessive drug pricing. While such programs are under fire from the health insurance industry and large payer groups, who argue that the programs steer people away from cheaper drugs that are equally effective, it has been well documented that expensive co-payments and co-insurance lead to gaps in treatment for people with HIV or HCV, who don’t have cheaper alternatives and who would experience significant medical harm.

In response, most manufacturers arranged conference calls with the FPC for further discussion of their pricing principles. Claiming legal proscriptions, however, companies stated while they can receive input before pricing increases, they can only notify the FPC and general public after the price increases have been implemented. While the companies reiterated their support for patient access, primarily through patient assistance and co-pay assistance programs, they nevertheless uniformly proceeded to raise WAC prices unreasonably anyway.