WASHINGTON--(BUSINESS WIRE)--AIDS Healthcare Foundation (AHF) today reported that Medicaid programs in both Texas and Louisiana do not yet cover Gilead Sciences’ expensive new AIDS drug Stribild, its new four-in-one HIV/AIDS treatment combination, which was recently approved by the Food and Drug Administration (FDA). In early September, just days after FDA approval of Stribild, Gilead priced the combination at an astounding $28,500 per patient, per year, Wholesale Acquisition Cost (WAC). That price is 35% more than Atripla, the company’s best selling combination HIV/AIDS treatment, and made Stribild the highest priced first line combination AIDS therapy.
Almost immediately, Gilead also reached a price reduction agreement on Stribild with the ADAP Crisis Task Force (ACTF), of the National Alliance of State & Territorial AIDS Directors (NASTAD) on behalf of the nation’s hard-hit network of AIDS Drug Assistance Programs (ADAP). In response to the initial steep price of Stribild and the swiftness of the ADAP Crisis Task Force agreement, AHF asked Gilead to also lower the price for other private and government programs such as Medicaid, Medicare, private insurers and other payors that otherwise face Gilead’s steep price tag for the new medication. AHF officials sent letters to private insurers and state health department directors nationwide urging them to exclude Stribild from their respective drug formularies if the drug was not made price-neutral to Atripla. AHF also asked the program directors to consider placing Stribild on ‘prior authorization’ status. ‘Prior authorization’ requires that a particular prescription must be reviewed by a second medical provider for assessment of medical necessity before being filled for a drug, and the process may add a day to the timeline of filling a particular prescription.
“If Gilead executives immediately turned around and offered the ADAP Crisis Task Force such a significant—and welcome—price reduction, doesn’t it beg the question that the drug might just be priced too high to start with? Gouging unwitting, less vocal or less skilled negotiators or purchasers of Stribild?” said Michael Weinstein, President of AIDS Healthcare Foundation. “Tax dollars pay for most of these drugs. Drug companies know this and continue this shell game of high pricing, with side deals cut along the way—the exact details of which cannot be disclosed. We asked Gilead to expand its ADAP price concessions on Stribild with Medicaid, Medicare and private insurers because the cut was not shared widely enough with other struggling insurance and assistance programs. Texas and Louisiana now join New York in letting us know that they do not yet cover Gilead’s pricey new treatment, and in the case of Louisiana, will also take our comments about prior authorization into consideration.”
In a letter dated September 13, 2012, Kyle L. Janek, M.D., Executive Commissioner of the State of Texas’ Health and Human Services Commission wrote to AHF, “Stribild is currently not on the drug formulary of either the state’s Medicaid or ADAP programs.”
The following week, a letter from the State of Louisiana’s Department of Health and Hospitals Office of Public Health that was cosigned by Rodney Wise, M.D., Medicaid Medical Director, and J.T. Lane, Assistant Secretary, noted, “…Louisiana Medicaid and the Office of Public Health has recently begun to review the impact that Stribild would make on the annual cost of providing medication and medication-related cost shares to eligible clients living with HIV disease. As such, Stribild is not currently available through the LA ADAP Formulary.” Louisiana also noted, “…the Louisiana Medicaid program maintains a preferred drug list and is currently restructuring its pharmacy benefits. As such, Medicaid staff will take your comments about prior authorization into consideration.”
With regard to the price Louisiana’s ADAP pays for Stribild after the ACTF/Gilead agreement, state officials wrote, ‘The ADAP price is derived from Medicaid ‘best price’ and cannot be disclosed, but is an approximate 62 percent reduction from the Wholesale Acquisition Cost (WAC) price.’
“Although drug companies insist—and states usually acquiesce—to a virtual blackout regarding any transparency around these pricing agreements and discounts, we can do some back-of-the-envelope math here and see that the price for Stribild drops from the $28,500 Wholesale Acquisition Cost price to a discounted price of approximately $10,830 per patient, per year for Louisiana’s ADAP,” added AHF’s Weinstein. “But why must they, or any of these hard hit states or programs, have to deal with all the cuts, rebates and concessions? Why not just price the drug at a lower price point to begin with? And regarding drug rebate programs: they are, in essence, loans from cash-strapped government programs to multi-billion dollar pharmaceutical companies, short or longer term—and oftentimes completely un-repaid. Its high time that drug pricing becomes fair and more transparent.”
The State of New York previously indicated that its Medicaid program does not cover Stribild. In a September 14th letter to AHF President Michael Weinstein, Janet Zachary-Elkind, Deputy Director, Division of Program Development & Management for the New York State Department of Health responded via letter noting that, “At this time, Stribild is not covered by the Medicaid program,” and that the state is also, “…evaluating coverage options and possible prior authorization requirements to ensure the product is utilized in a medically appropriate and cost effective manner…”
About AIDS Healthcare Foundation
AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to more than 183,000 individuals in 27 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook: www.facebook.com/aidshealth and follow us on Twitter: @aidshealthcare.