California pressures Bristol-Myers Squibb on cost of AIDS drug

State officials are pressuring drug giant Bristol-Myers Squibb to do something about the skyrocketing cost of AIDS medication.

Earlier this month, state Controller John Chiang dispatched a letter to Bristol-Myers Squibb, which manufactures a key AIDS drug, to urge the company "to step up and join the other pharmaceutical companies that have found ways to reduce the cost of drugs to California."

Two of the state's largest retirement funds – CalPERS and CalSTRS, which have significant investments in Bristol-Myers Squibb – also sent letters as part of the growing chorus trying to get the company to cut prices on the anti-retroviral drug Reyataz.

Bristol-Myers Squibb accounts for about 30 percent of all drugs purchased in California to treat AIDS patients.

Reyataz is one of the most commonly used drugs to treat AIDS patients – and also one of the most expensive, with an average wholesale price of $13,046 a year, according to the controller's office.

In the just-completed fiscal year, 69,709 prescriptions of Reyataz were dispensed by California's AIDS Drug Assistance Program, which helps poor and middle-class Californians buy expensive HIV/AIDS drugs.

During the past 10 years, the number of clients assisted by the program rose 60 percent to 38,033. But the amount spent on drugs rose almost 200 percent – from $145 million during fiscal 2000-2001 to a projected $431 million during fiscal year 2010-2011.

The program now spends, on average, about $583 per anti-retroviral drug prescription, nearly double the $302 it spent per prescription a decade ago, state figures show.

About two-thirds of the funding for the program comes from the federal government or from the drug companies in the form of rebates. The state picks up the remaining third – about $71 million this year – and substantially more next year.

This year, the state cut funding to the program by $25 million but obtained drug company rebates to plug the hole. That likely won't be an option in future years, state officials said.

"This is an untenable situation," Chiang said in his letter to Bristol-Myers Squibb. "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 drug costs."

Company officials said Wednesday they have no intention of turning their back on AIDS patients either, saying that the company already provides a slew of assistance programs.

However, the firm declined to say whether it planned to cut prices for its AIDS-related drugs.

"We fully intend to respond directly to Controller Chiang," said Cristi Barnett, a spokeswoman for Bristol-Myers Squibb.

The company has already responded to a letter from the California State Teachers' Retirement System, but neither side was prepared to discuss any agreements. In its letter to the company's chairman, CalSTRS mentioned its vast investments in the firm: 7 million shares of stock that CalSTRS said are worth more than $190 million.

Last month, the AIDS Healthcare Foundation, which has been critical of Bristol-Myers Squibb's pricing policy, also enlisted the support of the California Public Employees' Retirement System's Investment Committee to help lobby the company to slash prices.

Without access to anti-retroviral drugs, patients often become sicker, Michael Weinstein, the foundation's president, said Wednesday. "It's absolutely a matter of life and death," he said. "When the drug bill is $20,000, and you make $30,000, you can't afford to pay it."

Multiple drug companies – including Merck, Johnson & Johnson, GlaxoSmithKline and Gilead – have agreed to take a financial hit in order to keep selling the drugs to cash-strapped states.

But not Bristol-Myers Squibb, Weinstein said.

Even with concessions, many states are restricting eligibility for their AIDS drug programs in an attempt to cut costs. This has led to waiting lists and even cutting the spigot to some current recipients of aid.

Weinstein fears the cuts will lead to a further resurgence of AIDS. "The message going out is: Why get tested if I can't get treated?"

- The Sacramento Bee
http://www.sacbee.com/2010/07/29/2921839/california-pressures-bristol-myers.html#none