AHF praises CA Treasurer for urging AIDS drug companies to reduce medication costs

Today AIDS Healthcare Foundation (AHF) praised California State Treasurer Bill Lockyer for sending letters to the CEOs of eight AIDS drug companies—Abbott Laboratories, Boehringer Ingelheim (BI), Bristol-Myers Squibb (BMS), Genentech, Gilead Sciences, Merck & Co., Tibotec Therapeutics and ViiV Healthcare—urging them to reduce the price of their HIV/AIDS medications for California and its AIDS Drug Assistance Program (ADAP). In addition to his role as State Treasurer, Lockyer is also a Board Member for CalSTRS and CalPERS, the two largest public pension funds, both of which are substantial shareholders in Abbott, BMS, Gilead and Merck.

HIV/AIDS medications manufactured by Gilead represent the largest share of drugs paid for by ADAP. The cost of Gilead's Atripla and other high-priced AIDS drugs are putting an unbearable strain on cash-strapped ADAP programs nationwide, limiting access to lifesaving treatment for those most in need.

ADAP is the payer of last resort for thousands of people with AIDS who cannot afford their medicines. However, due to the high price of AIDS drugs such as Atripla - which costs more than $10,000 per year for ADAP- this program can no longer serve all the people who rely on it.

In the letter, dated April 6, 2011 and addressed to Abbott CEO Miles D. White, BI CEO J. Martin Carroll, BMS CEO Lamberto Andreotti, Genentech CEO Ian Clark, Gilead CEO John Martin, Merck CEO Richard T. Clark, Tibotec CEO Glenn Mattes, and ViiV CEO Dr. Dominique Limet, Treasurer Lockyer states: "These increases not only put an undue burden on people seeking treatment, but place an unsustainable burden on states. California cannot afford to increase the budget for ADAP indefinitely to pay for higher drug prices. Nor can the state be put in the position of denying other essential health services in order to pay increasing drug costs. This tension must be resolved and in a manner that first serves Californians in need of health care."

"AHF thanks Treasurer Lockyer for his leadership in urging the companies to do their part to ensure that California HIV/AIDS patients in need are being served," said Michael Weinstein, President of AIDS Healthcare Foundation. "A 257% increase in AIDS drug spending in California since 2000—triple the rate of patient growth—is a direct result of the high prices of AIDS drugs being manufactured by these eight companies—drugs like Gilead's Atripla which cost the program $10,000 per patient per year. Such prices are putting an unbearable strain on California's cash-strapped state AIDS Drug Assistance Program threatening access to lifesaving HIV/AIDS treatment for some of the state's poorest and most vulnerable citizens."

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 7,552 individuals on waiting lists to receive lifesaving AIDS medications in eleven states. In addition, thousands more Americans living with HIV/AIDS have been dropped from the program or made ineligible to receive medications through ADAP due to stricter eligibility requirements. With California's budget crisis worsening, last year the state considered potentially devastating cuts that would have resulted in Californians with HIV/AIDS losing access to lifesaving drugs.

In the letter, Lockyer refers to price cuts made by the companies last year when California's ADAP was "...on the precipice of potentially devastating cuts that would have resulted in Californians with HIV/AIDS losing access to life-saving drugs."

He states:

Unfortunately, as you are aware, the state's fiscal situation has gotten worse, with new financial demands on ADAP beneficiaries proposed as a partial solution to the state's budget woes. State general fund dollars continue to shrink and California is faced with either ratcheting down access to ADAP or cutting other vital health services to offset the cost of ADAP. The state cannot keep up with both the increasing demand and rising drug costs in the ADAP program. Moreover, supplemental agreements by several drug companies are set to expire this year and next year, putting greater financial pressure on ADAP.

The letter continues: "I urge you to extend the supplemental agreement you already have in place with the state and provide additional pricing considerations that will translate into a cost savings for the program. Only by a shared responsibility to sustain this program can we ensure ADAP will serve all of the people who rely on it."

Each of Lockyer's letters concludes with the Treasurer expressing his hope that the companies "...will continue to strive to assist ADAPs in California and elsewhere as they struggle to provide the means to keep people with HIV/AIDS alive and as healthy as possible."