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Fighting Drug Bundling

When he was a medical corpsman with the Marines in Vietnam, Tim McCormick was infected with the hepatitis C virus.

McCormick, now 52, is one of an estimated two million veterans who are infected with hepatitis C, a chronic disease that leads to liver failure, CBS News Correspondent Russ Mitchell reports.

The Veteran's Administration is limiting treatment for hepatitis C to one product: Rebetron. It's a combination of interferon injections and a pill called ribavirin. They're sold together as a kit by pharmaceuticals company Schering-Plough.

But McCormick is very clear that the product isn't helping him. "It doesn't work for me," he says. "I will die if I'm only given this. I'll die."

Doctors say Tim needs a higher dose of interferon than what Rebetron provides. So for him and thousands of other hepatitis c patients the therapy just doesn't work.

Patient-activist Brian Klein explains their predicament: "The Rebetron kit is the only way to get the ribivirin, and a month's supply of that is $1440. So if you want to add on another interferon that would be another $500 a month.

Schering-Plough's refusal to sell ribavirin separately means patients and their insurers have to pay a 30 percent premium to get the drug, which can triple the effectiveness of interferon. Frustration with this practice has activists like Brian Klein at war with big business and big government.

"We certainly maintain there is an anti-trust violation here," says Klein. "You cannot tie the sale of one product to another."

The FDA admits it knows of no other drug that is sold only when packaged with a totally different drug, a practice known as bundling. It also says while it has written to Schering-Plough to encourage it to sell ribavirin separately, it cannot order it to do so.

"If this is allowed to stand it can happen to any disease state," warns Klein.

Struggling with both hepatitis C and HIV, Klein fears other drugs may become bundled for complicated diseases like AIDS and cancer. Schering-Plough declined to be interviewed on camera by CBS News, but provided documents saying that other interferon makers could apply for FDA approval for the ribavirin combo, but have not. Shering Plough says it has researched -- and the FDA has approved -- ribivirin to be sold only with its interferon. Shering adds the FDA should not encourage off-label use where safety and efficacy have not been adequately studied.

But infectious disease expert Dr. Stanley Deresinsky believes mixing ribivirin with other companies' brands of interferon is worth the risk for some patients.

"I don't consider the lack of that information a tremendous barrier in large part because of the way the drugs work," says Dr. Deresinski.

A small pharmacy in a working-class section of Pittsburgh has found a way to provide ribivirin for 20 percent of what Schering charges.

"We make capsules for other disease states, why coudn't we have the powder and make the capsules ourselves," says pharmacist Betty Fisher.

And that's exactly what Fisher is doing. The pharmacy purchased ribivirn from a foreign source and this week went into business selling the drug when Shering's patent on the combo therapy expired.

Because Fisher's is a specialized pharmacy that compounds drugs to doctors specifications, it's challenging Schering's exclusive distribution rights to ribivirin.

The first order went out the door Friday morning, and more followed. Even a veterans hospital has called to see how it could take advantage of Fisher's lower cost.

This is good news also for vet Tim McCormick. Tim is clear of hepatitis C since he started increasing the amount of interferon above what Schering sells in its kit. He spends $3300 a month to buy both the bundled package and the dose he needs. But now that there's competition, patients have a way to get the life saving ribivirin without going broke doing it.

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