AHF led sustained advocacy campaign leads to BMS's offer of discounts in AIDS drug pricing

Aug 12 2010

Following ongoing advocacy campaigns spearheaded by AIDS Healthcare Foundation (AHF) that targeted several of the largest AIDS drug companies over their pricing and rebate policies for the nation's AIDS Drug Assistance Programs (ADAPs), the federally funded, state run programs that supply lifesaving AIDS drugs to low-income Americans in need, that the last remaining major AIDS drug company, Bristol-Myers Squibb (BMS) today announced an agreement that will provide additional cost savings to cash-strapped ADAPs nationwide. The agreement, with the ADAP Crisis Task Force (ACTF) of the National Alliance of State & Territorial AIDS Directors (NASTAD), was announced in a press release today.

“Drug spending by ADAPs has increased more than seven-fold (617%) since 1996, more than twice the rate of client growth over this same period.”

Previous to BMS' announcement today, Merck and Company, Johnson & Johnson's Tibotec Therapeutics, Gilead Sciences Inc., Viiv Healthcare (a new drug company formed in a partnership between GSK and Pfizer) and Abbott Labs all offered significant discounts and pricing concessions to cash-strapped ADAPs. BMS is the last major AIDS drug manufacturer to announce additional discounts for cash-strapped ADAPs, despite the fact that the crisis is now so severe, 2718 individuals in thirteen states are on waiting lists to receive lifesaving AIDS medicines through the program.

BMS has been the target of a sustained advocacy campaign led by AHF over its pricing of its key AIDS drug Reyataz for ADAPs. AHF efforts have included: banning BMS sales representatives from AHF Healthcare Centers, a "Shame on BMS" postcard and ad campaign, an e-advocacy campaign that generated hundreds of e-letters from AIDS advocates from all areas of the country to BMS CEO Andreotti and several public protests. AHF's advocacy also spurred inquiries to BMS over the pricing of Reyataz from the two largest public pension funds in the nation—California State Teachers Retirement System (CalSTRS) and California Public Employees' Retirement System (CalPERS).

"We are pleased that BMS has finally joined the ranks of AIDS drug companies offering price concessions that will make lifesaving drugs far more affordable and accessible to the nation's AIDS Drug Assistance Programs and the thousands of people with HIV/AIDS who rely on the lifeline these programs provide around the country," said Michael Weinstein, President of AIDS Healthcare Foundation. "Over the past two years, in the wake of growing crises facing many of our nation's ADAPs, AHF stepped up its AIDS drug pricing advocacy targeting several drug companies with protests, advertising and email campaigns, engaging huge investment funds such as CalPERS and CalSTRS. Earlier this year, we also persuaded California State Controller John Chiang about the importance of the issues and he wrote a letter to BMS regarding its AIDS drug pricing. All these actions were intended to keep the heat and focus on BMS and its unwillingness to reduce its pricing for hard-hit ADAPs. We are proud of whatever role our actions may have played in helping pressure BMS and other companies to offer price concessions on their lifesaving drugs."

In July, AHF released a letter that California State Controller John Chiang sent to drug giant BMS urging the company to reduce the price of its key HIV/AIDS drug, Reyataz—one of the most expensive first-line AIDS treatment in the U.S.—for California and its AIDS Drug Assistance Program (ADAP). State ADAPs provide lifesaving HIV/AIDS medications to low-income patients. Controller Chiang subsequently received a reply from Raymond D. Sacchetti Senior Vice President, US Virology, Bristol-Myers Squibb dated July 30, 2010, which stated in part: "In March of this year, we reached a multi-year agreement with the Task Force, but due to the ongoing funding crisis, we have reopened discussions with them and hope to reach a new agreement in the very near future. These negotiations are confidential and, as such, other organizations have no knowledge of the level of rebates or pricing we provide to ADAPs."

Controller Chiang sent his initial letter after officials from AHF approached the California Public Employees' Retirement System (CalPERS) and California State Teachers' Retirement System (CalSTRS)—the two largest public pension funds and long-term owners of BMS stock—and testified at an investment committee meeting about the impact that the steep prices of certain HIV/AIDS drugs including BMS' Reyataz are having on many financially strapped state programs. Chiang sits as a member of both Boards. Both CalPERS and CalSTRS have also sent letters to BMS regarding the cost of Reyataz.

With state budgets stretched thin and increasing numbers of unemployed workers without health insurance, many states have been forced to cap enrollment in their AIDS Drug Assistance Programs. Currently, there are over 2,000 individuals on waiting lists to receive lifesaving AIDS medications in twelve states.

According to an annual industry report issued by the National AIDS State and Territorial Directors (NASTAD) in early May 2010, "Drug spending by ADAPs has increased more than seven-fold (617%) since 1996, more than twice the rate of client growth over this same period." An AHF analysis of NASTAD's report also showed that since 2000, ADAP spending on lifesaving antiretroviral medications (ARVs) has increased 120%, but the number of clients served by ADAP has only increased 80%.

In his letter to BMS' CEO Lamberto Andreotti dated July 9, 2010, Controller Chiang states:

California's AIDS Drug Assistance Program (ADAP), like ADAPs across the nation, is in jeopardy as California's budget continues to suffer the ravages of the recent recession. As available state general fund dollars continue to shrink, demand on the program has grown faster than normal (another byproduct of the recession) and the cost of drugs has been increasing.

This is an unsustainable situation. California has no interest in depriving people with HIV/AIDS of drugs that keep them alive, so the only available recourse is to rein in the growing drugs costs. On balance, it seems that all parties should do their part to ease the pain this recession has inflicted on ADAP.

In order to help alleviate the crisis, other major AIDS drug manufacturers have agreed to significant reductions in the pricing of their lifesaving AIDS medications to ADAPs, including Merck and Company, Johnson & Johnson's Tibotec Therapeutics, Gilead Sciences Inc., Viiv Healthcare and Abbott Labs. But not BMS. Meanwhile, twelve states have instituted waiting lists. And the number of people waiting to access medicines continues to balloon. In Florida, the waiting list is increasing at a rate of 250 to 300 people per month.

Adds Chiang: "Ultimately, modest changes from drug companies are all that is needed to help ensure ADAPs can continue to serve the people who need them. It is time for BMS to step up and join the other pharmaceutical companies that have found ways to reduce the cost of drugs to California and its ADAP program."

Background on the Pricing and Impact of BMS' Reyataz

Since it was first approved by the FDA in 2003, BMS has increased the price of Reyataz by over 25%. Today, the Average Wholesale Price (AWP) of Reyataz (atazanavir) stands at $13,046 per-year. AHF officials note Reyataz must be taken with at least two other HIV/AIDS drugs as part of an effective antiretroviral treatment regimen.

AHF has seen firsthand the impact of high priced AIDS drug like Reyataz. In California, for example, since 2000 the number of new ADAP clients has only increased by 50%, but AIDS drug spending has increased by 165%. The price of Reyataz and other drugs is a major contributing factor to this increase.

Across the country, states have been forced to make cuts to ADAP services and enrollment because of high cost AIDS drugs like Reyataz. States can no longer afford to provide treatment to many of their current ADAP clients, and as costs increase more people will be put at risk of losing access to services. Ultimately, this means that the more people who go on high-priced drugs like Reyataz, the fewer who can receive lifesaving services.

Source AIDS Healthcare Foundation