Financial Times Profiles Roche’s Reasoning Behind Pricing of New Antiretroviral Drug FuzeonRoche's release of its new antiretroviral drug Fuzeon should be a "cause for celebration," but the drug's high price has called into question the "unwritten agreement in AIDS treatment" that companies should offer lower prices in developing countries and in return be allowed to make attractive profits in developed markets, the Financial Times reports. While most of the controversy over antiretroviral drug pricing has centered on the costs of the drugs for developing countries, the Fuzeon controversy has exposed a conflict over the pricing of AIDS drugs in the United States and the "balance between rewarding innovative medicines and making resources available for cash-strapped health systems," according to the Times (Dyer, Financial Times, 3/26). The FDA on March 13 approved the drug, which is designed for HIV/AIDS patients who have failed to respond to other medications, is the first drug in seven years that uses a new method to fight HIV. Roche, the Swiss pharmaceutical company producing and marketing the drug, and Trimeris, the biotech company that developed the drug, last week announced that the price of Fuzeon in the United States would be "just shy" of $20,000 per patient per year (Kaiser Daily HIV/AIDS Report, 3/21). The price is double that of the most expensive HIV treatments on the market, and because the drug must be taken in combination with other medicines, the total cost of treatment could reach between $30,000 and $40,000 per patient per year.
Drop in Research Investment?
The price has caused a "barrage of criticism" from AIDS advocates and state AIDS Drug Assistance Programs, whose budgets are already "under intense pressure," according to the Times. Roche says that the high price of the drug reflects the $600 million dollar investment made for the drug's development. "It is critical that we can recoup the investment that we make in bringing drugs like Fuzeon forward," David Reddy, head of Roche's AIDS business, said. Roche also says that the price reflects the complicated 106-step process required for the production of the drug, an aspect of the pricing decision that they showed AIDS advocacy groups prior to the release of the price by organizing visits to its manufacturing plants. The criticism that Roche has garnered over the pricing of Fuzeon may "damage the prospects for further research" on antiretroviral drugs, according to the Times. The number of companies involved in AIDS research has dropped, according to industry executives. "There is a big risk here. If companies feel they will not make a sufficient return on developing AIDS drugs, one day they will decide not to do the research," Harvey Bale, head of the International Federation of Pharmaceuticals Manufacturers Associations, said (Dyer, Financial Times, 3/26).