AHF: CA Controller Chiang Urges Gilead to Cut AIDS Drug Prices

In Letter to Gilead Sciences, Inc., Chiang Says “California Cannot Afford to Increase the Budget for ADAP Indefinitely to Pay for Higher Drug Prices”; Thousands Across U.S. Denied Access to Lifesaving Drugs Thru State AIDS Programs Due to Ballooning Costs, Shrinking Budgets

High Prices for Drugs Such as Gilead’s Atripla Have Contributed to a 257% Increase in CA AIDS Drug Spending Since 2000—Three Times the Rate of Patient Growth

SACRAMENTO, Calif.--()--Today AIDS Healthcare Foundation (AHF) announced that California State Controller John Chiang has sent a letter to California-based drug company, Gilead Sciences, Inc. asking the company to reduce the price of its HIV/AIDS medications for California and its AIDS Drug Assistance Program (ADAP). State ADAPs provide lifesaving HIV/AIDS medications to low-income patients. In addition to his role as State Controller, Chiang is also a Board Member for CalSTRS and CalPERS, the two largest public pension funds, both of which are substantial Gilead shareholders.

In the letter, dated March 22, 2011 and addressed to Gilead CEO John Martin Controller, Chiang states: “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 the people who rely on it.”

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 7,261 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.

A key Gilead drug, Atripla, accounts for approximately 20% of all ADAP drug expenditures nationally, according to the National Alliance of State and Territorial AIDS Directors (NASTAD).

In the letter, Chiang explains how such high drug costs are contributing to the dire situation:

Year in and year out, the increasing cost of AIDS drugs has limited the number of people who can be served using existing ADAP funds. For example, California’s ADAP program (the largest in the nation) has experienced a 257% increase in AIDS drug spending since 2000, more than three times the rate of client growth over this same period. This sharp increase is a result of higher prices for newer AIDS drugs, such as Gilead’s Atripla, which costs over $21,900 per patient per year.

These increases not only place an undue burden on people seeking treatment, but place an unsustainable burden on states. California cannot afford to increase the budget for ADAP indefinitely in order 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 manner that first serves Californians in need of health care.

“AHF would like to thank Controller Chiang for expressing his concerns over the pricing of Gilead’s key HIV/AIDS drugs and for urging the company to do its part to ensure that patients in need of lifesaving medicines are being served,” said Michael Weinstein, President of AIDS Healthcare Foundation. “AHF believes there is simply no justification for the high price of Gilead’s Atripla. Such prices are putting an unbearable strain on taxpayer-funded, cash-strapped State AIDS Drug Assistance Programs in California and around the country, ultimately limiting access to lifesaving HIV/AIDS treatment to those most in need.”

Last year, AIDS drug manufacturers agreed to reductions in the price of their lifesaving AIDS medications to ADAPs. However, since then the number of people waiting to access medicines has continued to balloon. Referring to price reductions made to state ADAPs last year, in the letter Chiang discusses the state’s continuing financial woes and the need for further price cuts:

Unfortunately, as you are aware, the state’s fiscal situation has gotten worse, with new financial demands on ADAP beneficiaries proposed as part of the 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.

Chiang’s letter concludes: “…I hope that Gilead 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.”

To read the entire letter sent by Controller Chiang to Gilead Sciences, Inc., please click here.

AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and services to more than 152,000 individuals in 26 countries worldwide in the US, Africa, Latin America/Caribbean the Asia/Pacific region and Eastern Europe. www.aidshealth.org

Contacts

AHF
Lori Yeghiayan
Assoc. Dir. of Communications
Office: 323-308-1834
Cell: 323-377-4312
loriy@aidshealth.org
or
Ged Kenslea
Communications Director
Office: 323-308-1833
Cell: 323-791-5526
gedk@aidshealth.org

Contacts

AHF
Lori Yeghiayan
Assoc. Dir. of Communications
Office: 323-308-1834
Cell: 323-377-4312
loriy@aidshealth.org
or
Ged Kenslea
Communications Director
Office: 323-308-1833
Cell: 323-791-5526
gedk@aidshealth.org