Drug Pricing ... and What You Can Do about It

Over the last few years, a great deal of attention has been devoted to lowering the cost of HIV treatment in developing nations. Due to generic competition, activist and political pressure, and movement within the pharmaceutical industry itself, the cost of a typical three-drug anti-HIV combination has plummeted in some countries. Regimens that cost $15,000–$20,000 per person per year in the US are now being delivered in some places in Africa, Asia and South America for as little as a few hundred dollars per person per year. Some drugs from major pharmaceutical companies are delivered at their raw cost, while generic equivalents of others are sold at unheard of low prices. The crisis of AIDS in developing nations has done a great deal to show that good drugs needn’t be prohibitively expensive. The success in lowering the cost in some developing countries, however, has had no positive effect on prices in the US, In fact, prices for new drugs have skyrocketed in the US in recent years, while the prices of older drugs have been raised annually. It is appropriate and necessary for health care insurers in richer countries to bear more of the cost for drugs. However, the impact of rising costs on the US health care system can’t be overstated. Higher drug prices are one of the primary drivers in skyrocketing health care costs, causing restriction of public programs, making private health care unaffordable, and increasing the already dramatic numbers of the uninsured. A significant portion of the increased (but still inadequate) funding provided by Congress to meet the growing number of people needing treatment has been consumed by the higher cost of drugs. This trend must stop and it must stop now. When the first protease inhibitors (PIs) were released in 1995 and 1996, their price ranged from roughly $4,500 per year for the lowest priced (Crixivan from Merck) to approximately $7,000 year for the higher priced (Norvir from Abbott and Invirase from Hoffman-LaRoche). The two most recently approved PIs, Reyataz (Bristol-Myers Squibb) and Aptivus (Boehringer Ingelheim), each set new records for initial price. The basic price for Reyataz is $10,862 per year when used alone, or $14,774 when used with a small “booster” dose of Norvir (which is required for people who have used other protease inhibitors before). Roughly a year after Reyataz set a new price threshold, Aptivus leap-frogged it, selling for $13,596 alone. As bad as that sounds, Aptivus must always be used with a large booster dose of Norvir, a booster dose that costs private insurance payers as much as $15,654 per year, bringing the total cost of using Aptivus to $29,240 per year. (The high cost of Norvir in both cases reflects a huge 400% increase in the price of Norvir that was implemented more than year ago. The increased price applies only to private insurers and individual buyers, while the price P.I. Perspective