Consensus Statement on Roche Pricing |
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31 October 2002 Mr. George Abercrombie (cc to Franz Humer, Basel Switzerland) Dear Mr. Abercrombie, We are writing on behalf of the undersigned groups, organizations and individuals. We are writing to express our extreme dismay at the pricing actions taken by Hoffmann- La Roche in the launch of its new product, Pegasys, for treatment of HCV infection. Several of our members spent a great deal of time and effort attempting to convince your firm that it had an important opportunity in the launch of Pegasys to undercut the outrageous pricing set by Schering for its version of pegylated interferon. We talked about how much easier it would be to establish reimbursement for Pegasys if the price were substantially lower. We hoped to see a price that would make it possible to put the drug on formularies for Medicaid, MediCal and perhaps even the AIDS Drug Assistance Programs (ADAPs), as well as to secure similar forms of reimbursement for HCV patients who are not co-infected with HIV. We stressed how the bulk of the target markets for HCV treatment are not covered by private insurance. We pointed out how high drug prices are forcing people out of the market for private insurance and causing dramatic increases in the "co-pays" for prescription drugs. Earlier on, many advisory board members, activists and HCV coalition members worked with the FDA to clear the path for regulatory approval of Pegasys, stressing the need for competition because of the incredible price charged by Schering. Most of all, we warned Hoffmann- La Roche not to use the Schering price as a standard of reference, but rather make its pricing decision on a higher moral and ethical plane. To our dismay, it appears that Hoffman-La Roche wasn't listening. Your company chose a price that, unbelievably, is in fact higher on an annual basis than Schering's: $13,963 for a year's treatment with Pegasys, versus $13,116 for Peg Intron. We have all experienced this as betrayal. Since the price is so close to that set by Schering, it is obvious that your company simply decided that all it had to do was come near their price. It's also striking that the Pegasys price is higher, by a large amount, than that any of the antiviral drugs developed for treatment of HIV, which may be the most reasonable point of reference. By comparison, Pegasys isn't even a new drug, but rather the application of a well-known modification to an existing drug. It is hard for us understand how such excess can be ethically justified. We recognize that Pegasys requires a greater quantity of base interferon as a raw material, but certainly not so much that it justifies the incredible annual price. We recognize and appreciate that Hoffman-La Roche is providing free drug for the first twelve weeks, but that program will be forgotten after January of 2003, just a few weeks from now. Its effect on overall pricing is minimal. We hear that the "real difference" might come when Roche's version of ribavirin is added to the mix, that the price for this very old, very cheap and easy-to-make, off-patent drug will be substantially lower than that charged by Schering. We should certainly hope so, since Schering' ribavirin price borders on the criminal. Yet we have no reason at present to believe that Hoffmann-La Roche will suddenly change its spots and sell ribavirin at an appropriately low price. We expected a lower price for Pegasys and got one even higher than anyone imagined. Given the history, age, and manufacturing simplicity of ribavirin, it would be impossible to justify a price even as high as the lowest priced nucleoside analogue used in HIV disease, which is under $3000 per year. Will your company listen to us this time? We also made a major point that your pricing for Pegasys would be closely watched as an indicator of your intentions with regard to the pricing of the upcoming HIV entry inhibitor Fuzeon. Based on the Pegasys pricing, we are now gravely concerned about your plans for Fuzeon. An excessive price will surely lead some state ADAPs into virtual bankruptcy while further reducing the number of indigent HIV-infected Americans who can access this program. ADAP programs are already struggling underneath an anticipated deficit of at least $162 million in FY 2003. Many of us have worked for the last few years helping Roche and Trimeris ensure that the development of Fuzeon was responsive to community concerns and the needs of people with HIV. In light of the Pegasys pricing, the company's protestations about the extreme costs of manufacturing Fuzeon will now fall on deaf ears. In it's pricing of Pegasys, Hoffmann- La Roche has demonstrated that its pricing policies are based on greed and opportunism rather than legitimate need. We await now with a sense of grave foreboding the pricing of both ribavirin and Fuzeon. The bonds of trust we had striven so hard to build with Hoffmann-La Roche have suffered a severe setback. Hoffmann-La Roche is unlikely to enjoy the level of open communications and trust it had recently achieved with the hepatitis and HIV communities. Hoffmann-La Roche has demonstrated the limits of that trust and communication by its indefensible price for Pegasys. This letter is not the end of the matter from our point of view. We will continue to explore ways of lowering these prices. We believe your company has made a profound mistake, the result of which will be a much smaller market for Pegasys than might otherwise have been the case. We will explore all possible methods of telling this story in the media and the US Congress, both of which are currently very interested in the subject of drug pricing. We remain willing to meet with you or your designees to discuss this matter further. But as of now, we can only express our complete and utter discontent, dismay and disappointment with your actions. Sincerely, |
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