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BMS: Price Gouging Needs to End!

on Tue, 02/03/2015 - 08:33

TAG works in close collaboraiton with the Fair Pricing Coalition for a very good reason: HIV drug pricing is critical to treatment access advocacy throughout the world, including in the United States.

The FPC tries to negotiate reasonable HIV and HCV drug prices with pharmaceutical manufacturers, both at the time of a product’s market debut and regularly thereafter. As you can imagine, this work becomes more important and more difficult each year.  So many people with HIV and HCV cannot afford their medications.  While there has been a lot of well-deserved recent media attention to the prices of the new HCV drugs, the story of HIV drug price increases remains untold. HIV drug price increases continue annually and sometimes twice yearly for no justifiable reasons. The FPC believes that these price increases are unsustainable and we desperately need your help to change this dangerous pattern.

The FPC has requested that all HIV drug companies initiate a two-year price freeze.  To date, most have not complied. The FPC believes price freezes are necessary to bring HIV drug prices in line with what health care delivery under the Affordable Care Act can reasonably bear and to help alleviate treatment-related economic hardships for so many people with HIV. Currently, the most egregious example of unreasonable price increases is Bristol-Myers Squibb (BMS), as the attached template letter explains.

We hope you or your organization will submit a letter to BMS regarding its most recent price increase for Sustiva (efavirenz), ushered in on January 1, 2015. A template letter for personalization is attached and pasted below.

Please submit your letter via e-mail to Lamberto Andreotti, BMS’s Chief Executive Officer, immediately:

Please also copy the following individuals on your e-mail submission of the letter:

We need to make our collective voices are heard. Without your help, there will no end to the upwardly spiraling prices of HIV drugs.  Please take a few minutes to review the template, adapt and personalize it as needed, and submit your letter to Mr. Andreotti.

Thank you for your willingness to help us in the fight against unreasonable drug pricing.  Your time and effort in writing to BMS regarding its relentless and unjustifiable pricing increases is very much appreciated.


Lamberto Andreotti
Chief Executive Officer
Bristol-Myers Squibb, Inc.
345 Park Avenue
New York, NY  10154

Dear Mr. Andreotti:

I am writing to express my frustration and dismay at the January 2015 price increases for Bristol-Myers Squibb’s (BMS) antiretroviral drug products, notably Sustiva (efavirenz). I understand that the Fair Pricing Coalition (FPC) cautioned you against additional Wholesale Acquisition Cost (WAC) price increases for both Reyataz (atazanavir) and Sustiva following last year’s prices increases of 7.9% and an astonishing 16.7%, respectively, and I feel compelled to express a high level of frustration at BMS’s disregard for the HIV/AIDS community’s concerns.

Despite being granted a reprieve on the anticipated 2014 loss of patent protection for Sustiva, allowing BMS to reap an additional two years of exclusivity on U.S. sales of the drug, your company decided that this windfall was not enough and increased the 2015 WAC prices for Sustiva by nearly 10 percent—the largest price increase of all antiretroviral drugs reported thus far this year. This followed two 2014 increases—9.7% in January and 7% in June—contributing to an unconscionable total price increase of approximately 150% since the drug was approved in 1998.

These price increases for Sustiva have proportionately inflated the Atripla (efavirenz/tenofovir/emtricitabine) WAC price. A 3.7% price increase was ushered in with the new year, which follows a 6.6% increase in January 2014 and an additional 2.5% increase in June 2014. In effect, the annual WAC price of Atripla has risen more than 85%—from approximately $13,800 to nearly $26,000—since the single-tablet regimen was approved nine years ago.

These WAC price increases are significantly higher than standardized measures of inflation. The January 1, 2015, price increase for Sustiva is nearly four times that of the ten-year consumer price index (CPI) average of 2.5% and higher than all medical CPI categories, which are driven in part by unrestrained drug pricing.

These most recent price increases come at the same time that implementation of the Affordable Care Act is pushing people living with HIV into very difficult situations concerning their cost-sharing responsibilities related to antiretroviral medications. Because pharmaceutical manufacturers, including BMS, continue to escalate prices well above the CPIs, insurers are increasingly placing HIV medications on the highest specialty tiers, thereby requiring many patients to pay enormous co-insurance amounts (e.g., 50% of the cost of a medication) that increase in direct proportion to each price hike. In addition, insurers are increasingly requiring cumbersome prior authorization processes to access HIV medications or applying other utilization management techniques to them. In fact, a number of plans are not covering some of the most widely prescribed HIV medications.

I echo the FPC’s grave concerns regarding escalating HIV drug costs, particularly the unrelenting price increases for Sustiva. I therefore stand with the FPC in demanding the following pricing concessions:

  • BMS must institute a price freeze for all currently approved HIV drugs for the next two years and for a two-year period henceforth from the date of FDA approval on all new HIV and hepatitis C virus (HCV) drugs.
  • Thereafter, if it must, BMS should take no more than one price increase annually, and at no more than the rise of the medical CPIs. In addition, BMS should provide the FPC with prior notice and rationale for all price increases and, if possible, a call in advance to discuss any “potential” increase. 

Mr. Andreotti, the impact of unjustified drug price increases is unambiguous. BMS should refrain from compounding the average consumer’s economic hardship and immediately curtail inflating prices beyond the brink of what health care delivery under the Affordable Care Act can reasonably bear.

I would urge BMS to contribute to the solution of affordable HIV and HCV care in the U.S., not exacerbate the problem.

Yours truly,