Open Letter to Manufacturers of HIV and Hepatitis Medications Opposing 2017 Price Increases

FINAL LETTER – November 29, 2016

Submitted to AbbVie, Bristol-Myers Squibb, Gilead Sciences, Janssen Therapeutics, Merck, and ViiV Healthcare

The undersigned organizations and individuals submit this letter in response to price increases you took in 2016 on antiretroviral (ARV) drugs to treat HIV, and in advance of what has become a standard New Year’s practice of boosting Wholesale Acquisition Costs (WACs) for ARVs without regard to how that will affect patient access to these life-saving treatments. We also write to express concerns about future price increases for direct acting antivirals (DAAs) for the treatment of Hepatitis C (HCV), which are already priced beyond what insurers and people living with HCV can reasonably bear.

Included below, please find the U.S. Fair Pricing Coalition’s table documenting two years of increases, along with its pricing and access principles and requests. These issues are especially relevant in light of resulting cost-containment restrictions instituted by both public and private payers.

Since 2010, some ARV prices have even been raised twice in the same year, the most blatant example being Gilead’s dual hits in 2016 on Complera and Stribild, totaling 14.3% and 12.1% respectively. In all cases, the price increases exceed the rise in the Consumer Price Index (CPI), a measure of inflation, sometimes two to three times or more. They even exceed the medical CPI, which is always more than the overall CPI, arguably due in part to excessive drug prices.  In fact, average annual ARV increases have ranged from 5% to 8% ­— even higher in some instances — while the overall CPI has averaged 2.5% per year over the past 10 years.

We also have overwhelming evidence that exorbitant drug pricing has resulted in hepatitis C (HCV) patients being unable to access DAA combinations, which achieve up to 99% cure rates with minimal side effects. As examples of resulting obstacles, payers have initiated specialty tiering, coinsurance, and prior authorization restrictions for HIV and HCV drugs, with additional cost-containment measures in place for DAAs, such as fibrosis scoring qualifications, prescriber limitations, sobriety requirements, and detrimental rationing among incarcerated individuals.

Generally ignoring urgent community pleas to refrain from any price increases, and certainly no increases over medical CPI, the companies listed here have raised prices as follows (the columns show percent increases in 2015 and 2016, and overall since FDA approval):

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The FPC and signers of this letter firmly believe that upwardly spiraling drug prices are already beyond the limit of any conceivable justification, are unsustainable, and will further prevent HIV and HCV patients from accessing life-saving ARVs and DAAs. Thus, we urgently request that you agree to a two-year price freeze on ARVs and DAAs to offset, in part, the price increases of your ARV drugs since FDA approval, and the initial WAC prices of your Hepatitis C DAAs. We are aware of industry claims that no one actually pays the WAC price. However, we also know that all discounts start from that point, resulting in inflated, inconsistent, and unsustainable consumer prices.

If companies insist on instituting price increases, at the very most they should occur only once annually, no sooner than two years after FDA approval, and they should not exceed the overall increase in the medical CPI for the preceding year.

If any manufacturer of ARVs takes more than one annual price increase above medical CPI, or in the case of DAAs, any price increase whatsoever, we pledge to mobilize to notify and inform the public at every possible opportunity about any and all unreasonable and unfair pricing policies. President-elect Trump and Congressional leaders have provided bipartisan support for reining in excessive drug pricing, another pragmatic reason to curb your annual overreach. We urge you to heed these warnings, and reject any contemplated price increases.

Organizational signatories:

Access Support Network of San Luis Obispo and Monterey Counties
ACT UP LONDON
ACT UP New York
ACRIA
ADAP Advocacy Association
ADAP Educational Initiative
Advocates for Youth
AIDS Action Baltimore
AIDS Alabama‎
AIDS Foundation of Chicago
AIDS Treatment Activists Coalition
Any Positive Change Inc.
American Academy of HIV Medicine
American Sexual Health Association
AmidaCare
AVAC
Berkeley Free Clinic – Hep TEV Section
Big Bend Cares Inc.
Black AIDS Institute
Boulder Community Health-Beacon Center
Boulder County AIDS Project
CAEAR Coalition
Cares Community Health
The Center for Housing & Health
Center on Halsted
Chicago Women’s AIDS Project
Chicago House and Social Service Agency
CHOW Project
Coachella Valley Community Research Initiative, Inc.
Colorado Health Network
Colorado Organizations Responding to AIDS (CORA)
Community Access National Network
C.O.R.E. Medical Clinic, Inc.
CrescentCare
DC Fights Back!!
G III Associates
Gay Liberation Front NYC
GMHC
GNP+ (Global Network of People Living with HIV)
Good Samaritan Project
Harm Reduction Coalition
Harlem United
Health GAP
Health People
Healthy Rhythm Community Art Gallery
Hep C Alliance
Hep Free Hawaii
Hispanic Health Network
HIV Medicine Association
Illinois Alliance for Sound AIDS Policy (IL ASAP)
Illinois Public Health Association
Latino Commission on AIDS
Liver Health Connection
Los Angeles Community Health Project
LLHC (Louisiana Latino Health Coalition for HIV/AIDS Awareness)
Marin AIDS Project
National Alliance of State & Territorial AIDS Directors
Needle Exchange Emergency Distribution (NEED)
NMAC
Oasis Clinic
Okaloosa AIDS Support & Informational Services, Inc
Orange County Needle Exchange Program (OCNEP)
Pharma Greed Kills
Point Defiance AIDS Projects
Positive Iowans Taking Charge
Positive Life Palm Springs
Positive Women’s Network – USA (PWN-USA)
Project Inform
Projekt Information e.V.
Promise of Justice Initative
Sacramento Area S.T.O.P. Hepatitis Task-Force
San Francisco Hepatitis C Task Force
Santa Rosa Community Health Centers
San Francisco Department of Public Health
Southern AIDS Coalition
Southern HIV/AIDS Strategy Initiative (SASI)
Tennessee Association of People With AIDS
Test Positive Aware Network
Treatment Action Group
Treatment Access Expansion Project
Treatment Educat10n Network
Trystereo/New Orleans Harm Reduction Network
VOCAL New York
United States People Living with HIV Caucus
Universities Allied for Essential Medicines
University of Sussex
The Wall Las Memorias Project
Western North Carolina Community Health Services (WNCCHS)
Westside HIV/AIDS Regional Planning Council (WHARP), Chicago
Zephyr LTNP Foundation, Inc.

Individual signatories

Bernice Armould
Jim Banta
Ann Bardue
Gilbert Barrett
Michael Bauer
Jeffrey Beal
Sara Brewer
Christopher Cannon
Orlando Chavez
Lara Coffin
Kris Coontz
Jan Diamond
Michael Dorosh
Erin Dupuis
Ryan Eagle
Andria Efthimiou-Mordaunt
Isabelle Erbacher
Juan Fernandez Ochoa
Ann Finkelstein
Steven Flinn
Saoirse Folsom
Jim Fouratt
Alexandra Greenberg
Tami Haught
Mark Hubbard
Rosie James
Outi Kallunki
George Kerr III
Paul Kowal
Louise Kyle
Xuan Li
William Longbotham
Jennifer Lorvick
Colleen Lynch
Sara Lyttle
Najwa Maqbool
Paul Maurizio
Eric McNatt
Madeline Meisburger
Mark Milano
Bethany Miller
Jay Mills
Enrique Moresco
Priyanka  Narahari
Gerry Nealon
Katrina Nguyen
Stephanie Prohaska
Temple Robinson
Robin Roth
Merila Runlel
Juuso  Sallinen
Luis Santiago
Matt Sharp
Craig Shehea
Cynthia Springer
Peter Staley
Anna Steiner
Annunziata van Voorene
Wim Vandevelde
Reginald Vicks
Will Wilson

Fair Pricing Coalition Core Pricing and Access Principles and Requests

Pricing

• Institute a price freeze for all currently approved HIV and HCV drugs for the next two years, and for a two-year period henceforth from the date of FDA approval on all new HIV and Viral Hepatitis drugs.

• Thereafter, if you must, take no more than one price increase annually, and at no more than the rise of the medical CPI. In addition, provide the FPC with prior notice within the bounds of relevant laws, of the rationale for all price increases, and if possible, a call in advance to discuss any “potential” increase.

Access Programs

Robust access programs are a necessity to assist uninsured and underinsured individuals in obtaining necessary medications, and have become increasingly important for adequately insured individuals facing substantial out-of-pocket costs resulting from payer cost-containment measures. Even with a company’s commitment to such programs, further changes are necessary in order to adapt to the changing healthcare environment and the mounting burden of increasing drug prices. Nor can these access programs be used as an excuse for a company’s continued excessive pricing tactics.

• Where allowable by law, provide all privately insured individuals living with HIV and/or HCV with 100% coverage of all out-of-pocket (OOP) costs, including co-pays, deductibles, co-insurance or any other related charges for all HIV and Viral Hepatitis prescriptions, including mail order prescriptions. We make this request in light of reports from individuals throughout the U.S. who are not taking their medications because they cannot afford the rapidly increasing OOP costs.

• Donate to a highly functioning and qualified foundation pursuant to all relevant laws, particularly to assist Medicare Part D recipients who cannot use manufacturers’ programs to defray co-pays, co-insurance and deductibles, but who may seek assistance from such foundations to help with these costs.

• Continue use of HHS’s Common PAP Application Form, requesting no additional information from applicants than is already requested on the current form, and participate in HarborPath to foster ease of access to medications through your PAPs. Both help to streamline the multiple forms and programs that provide HIV and Viral Hepatitiis medications to low-income individuals without health insurance.

• Disclose to the FPC the number of patients on your HIV and HCV access programs (i.e., co-pay assistance and PAPs), and your eligibility formulas for underinsured patients in your PAPs. Provide transparency on your PAP website(s) about the eligibility criteria for underinsured individuals.

ADAPs

• Continue providing significant, additional discounts/rebates to ADAPs beyond those required by the 340B program for all existing and new ARVs and DAAs.

• Provide full rebates on partial payments made by ADAPs, as is the current industry standard and guidance from HRSA, pending any changes in HRSA’s final rule on the topic.

The Fair Pricing Coalition (FPC) applauds the Wyden-Grassley US Senate bipartisan Sovaldi investigation spotlighting a greed-driven pricing strategy behind Gilead’s $1,000 per pill hepatitis C drug launch

FOR IMMEDIATE RELEASE

Date: December 3, 2015 – The US Senate Finance Committee ranking member Ron Wyden (D-OR) and senior committee member Chuck Grassley (R-IA) issued a scathing bipartisan investigative report on December 1, 2015, revealing a Gilead Sciences, Inc. pricing strategy showing little concern for patient access to its lifesaving drugs Sovaldi (sofosbuvir) and Harvoni (ledipasvir/sofosbuvir).

“The report, which took 18 months to complete, is amazingly thorough and comprehensive, worthy of the US Senate and a Pulitzer Prize for investigative reporting,” said FPC co-chair Lynda Dee.

Sovaldi was approved by the FDA on December 6, 2013—a first-in-class hepatitis C drug that helped usher in a new era of short-course, all-oral, well-tolerated, and highly curative treatment.

Unfortunately, Gilead turned this long-awaited treatment option into a perfect storm of near-impossible drug access, marked by public and private insurance roadblocks in the form of prior approval, fibrosis, and strict sobriety requirements. These were instituted because government and industry payers could not afford the unconscionable cost of Sovaldi (a wholesale acquisition cost of $1,000 per pill for a total of $84,000 for a typical course of hepatitis C treatment) and later Harvoni ($94,500 for a typical treatment course).

Dee, cured of hepatitis C using a Sovaldi-inclusive regimen, explained: “With tears in my eyes, I literally begged Gilead at their FDA approval hearing to price Sovaldi reasonably so that it could be accessed by the hundreds of thousands of people who had been waiting so long for effective, less toxic hepatitis C treatments. The FPC met with Gilead before the launches of both Sovaldi and Harvoni, urging them to set their prices reasonably to avoid the cost-containment firestorm that is now the new normal for hepatitis C drugs. What was a dream scenario is currently a nightmare of bureaucratic insurance barriers.”

The Senate investigation found that Gilead provided supplemental rebates to only five Medicaid programs in 2014. “The poorest people in most of the country face the greatest access barriers to all the new hepatitis C regimens,” said FPC Co-Chair Murray Penner. “These barriers have worsened as Gilead recently narrowed eligibility for its Support Path program to exclude patients who have any form of insurance, even if that insurance denies access to Sovaldi and Harvoni. These barriers all result from unsustainable drug prices initiated by Gilead.”

The Senate report also provides clear evidence of Gilead’s greed and blatant disregard of stakeholder insight, stating: “Based on all of the information reviewed, it appears that in pricing its line of [hepatitis C] drugs Gilead may have underestimated the warnings of patient groups, insurers, health care providers, and other organizations about the potential impact that price would have on access…While publicly saying it prioritized patient access, Gilead set Sovaldi’s price at a level where ultimately many patients would not receive treatment. Sovaldi was on the market for almost a year without serious competitors, allowing Gilead to maintain a high effective price despite efforts by many payers to negotiate volume or treatment discounts or rebates.”

Additionally, according to the Wyden-Grassley report:

  • More than $1.3 billion was spent by Medicaid programs for Sovaldi in 2014, but only 2.4% of Medicaid patients with hepatitis C were actually treated because of the excessive price of Sovaldi.
  • In the 18 months that Gilead’s drugs have been on the market, Medicare’s monthly spending on hepatitis C treatments increased more than six-fold from $116.4 million in January 2014 to $793.2 million in June 2015.
  • Medicare’s average pre-rebate monthly spending on hepatitis C drugs grew to $765 million during the first six months of 2015, more than double the average monthly expenditure of $349.5 million.
  • Prisoners in the US Bureau of Prisons (BOP) system were also adversely affected. In fiscal year 2014, the year Sovaldi became available to treat prisoners with hepatitis C, the BOP’s spending on hepatitis C drugs increased 14%, even though the number of patients treated decreased 52%.

“This remarkable investigative report is an indictment against Gilead and the US drug pricing system which allows lifesaving drugs to be priced beyond what the market can reasonably bear,” said Dee.

At his press conference, Senator Wyden observed that drugs for other diseases like Alzheimer’s, diabetes, and cancer are in the pipeline. He noted that prices similar to those for the newest hepatitis C drugs are clearly not sustainable by private insurance companies and government payers.

The FPC wishes to thank Senators Wyden and Grassley, the Minority Staff of the Senate Finance Committee, and Senator Grassley’s staff for their Herculean efforts in compiling this investigative bipartisan report on hepatitis C drug pricing based on over 20,000 documents. The FPC was delighted to assist in this investigation

The full Senate Finance Committee report is available at: http://www.finance.senate.gov/newsroom/ranking/release/?id=3f693c73-0fc2-4a4c-ba92-562723ba5255. A press conference given by Senators Wyden and Grassley can be viewed at: https://www.youtube.com/watch?v=rxd_PTFoouo.

Contact:
Lynda Dee
(410) 332-1170 or (443) 756-2581
lyndamdee@aol.com

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The Fair Pricing Coalition, founded by the late Martin Delaney of Project Inform, is a national coalition of activists who work on HIV and viral hepatitis drug pricing issues and to help control drug costs for patients who are privately insured, underinsured and uninsured. The FPC also works to ensure access for recipients of state ADAPs, Medicare, and Medicaid as well as for other underinsured and uninsured individuals. For more information about the Fair Pricing Coalition and its history, visit: fairpricingcoalition.org.