Anxiety Over Cost Of New AIDS Drug

AIDS, medication, ribbon,
AP / CBS
A new AIDS medication for patients who are resistant to existing drugs is expected to get final approval in the United States within days, but the AIDS community is anxious instead of celebrating.

At issue is the high price tag for the drug, called Fuzeon — about $20,000 a year.

That is almost triple the cost of the most expensive treatment now available, and has put Fuzeon's manufacturer, the Swiss drug giant Roche, on the defensive while heating up the debate over pharmaceutical companies' pricing and profit strategies for AIDS drugs.

Fuzeon's breakthrough status earned it fast-track treatment by the Food and Drug Administration, which is to issue a decision on approval by Sunday.

Roche's chairman and chief executive, Franz Humer, said it is natural for the company to make money on a drug it took time and expertise to develop. European Union regulators also are expected to license the drug soon.

"We need to make a decent rate of return on our innovations. This is a major breakthrough therapy," he said in an interview. "I can't imagine a society that doesn't want that innovation to continue."

AIDS activists applaud Fuzeon's development but say it won't do much good if patients can't afford it. Government-funded insurance or health service providers cover only a portion of the cost for AIDS drugs.

"We don't think we can add Fuzeon (to our drug list) without cutting something else. We are excited about the drug, but we aren't sure we can afford it," said Michael Montgomery, who oversees California's government-funded AIDS Drug Assistance Program.

The manufacturing process for Fuzeon is very complicated, requiring 44 ingredients, about three times the norm. There are 106 steps involved, more than four times the average.

AIDS activists insist the elaborate process still doesn't justify the price. Roche can't release the U.S. price until Fuzeon is approved but said it will be close to the recently announced European annual cost of $20,409.

"Is the fact that it is hard to produce supposed to make you feel better that you can't afford it?" said Martin Delaney, founding director of Project Inform, an AIDS advocacy group.

The average AIDS patient takes a combination of drugs that costs around $14,000. Yearly treatment for people in advanced stages of the disease costs between $20,000 and $27,000.

Fuzeon, which is injected, also will typically be taken with other drugs. So even if is substituted for something else, it will add about $14,000 to the total treatment cost, Delaney said.

Manufacturing constraints mean only between 12,000 to 15,000 patients worldwide will have access to Fuzeon this year. That should grow to about 40,000 by 2005.

It is difficult to say how many patients are drug resistant but most in the AIDS community agree demand for Fuzeon will outstrip supply even with the high price. Some suspect Roche is trying to curb initial demand with the price.

Some analysts and activists insist Roche is taking advantage of its monopoly before other new treatments come on the market.

Others point out that Roche has to share profits with Trimeris, the biotech company that discovered Fuzeon and tapped the Swiss firm to make and market it. Trimeris and Roche evenly split profits earned in the United States and Canada, while Trimeris receives a royalty from sales elsewhere.

Humer said Fuzeon's price simply reflects the $600 million cost of development, as well as the cost of manufacturing and research for other AIDS medicines.

Roche also said it would give discounts to government-run programs and give some of the drug away for free.

If 12,000 people were to take Fuzeon at $20,000, Roche would reap about $240 million in revenues. That would grow to about $480 million by 2005 if manufacturing capabilities expand as hoped.

Analysts say Fuzeon's pricing suggests Roche could turn a profit in three years. The industry average for a new drug is 16 years, although some blockbusters make money in five to 10 years.