Who Pays for Experimental Drugs? : AIDS Drug AZT May Cost Patients $10,000 a Year

The first AIDS drug expected to be licensed could cost patients up to $10,000 a year, an amount that may be unaffordable for many--particularly those who have lost their jobs and health insurance because of the disease, a congressional panel was told Tuesday.

The drug, AZT, or azidothymidine, is expected to be approved for marketing within several weeks. Federal health officials, motivated by the urgency of the AIDS crisis, have moved to expedite licensing of the drug--the first shown to have a dramatic impact in prolonging the lives of AIDS patients--and have pledged to place other promising AIDS drugs on a so-called fast track.

Would Hasten Treatment

As a result, Vice President George Bush and government health officials Tuesday proposed a new program that would speed such promising experimental drugs--those that have not yet been licensed--to patients with AIDS and other life-threatening conditions, when no alternative therapies exist.

Under the new program, however, patients may be required to pay for the experimental drugs. That could prove prohibitive if future drugs for acquired immune deficiency syndrome are as expensive as AZT.

“The terrible disease AIDS and the desperate need for effective treatment have focused public attention on this issue as never before,” Dr. Frank E. Young, commissioner of the Food and Drug Administration, said at a press conference. “In an immediately life-threatening disease such as AIDS, we cannot ask the public to passively sit by when experimental drugs are being tested. We need to make these drugs available at the earliest possible time.”

But the anticipated high cost of AZT may make it impossible for many AIDS patients to receive it under public health care assistance programs, federal officials told members of the House Energy and Commerce subcommittee on health Tuesday.

William Roper, administrator of the Health Care Financing Administration, testified that prescription drugs are an “optional benefit” under state Medicaid programs, with many of those states setting dollar limits on the amount they will reimburse.

“States may limit the number of drugs covered and the amount and scope of the benefit, for example, by restricting drug coverage to so many drug prescriptions per month,” he said.

California Law

Further, he said, Medicare does not pay for drugs taken on an outpatient basis, as AZT would be administered. In California, however, a state law enacted last year requires that the state Medicaid program pay for any AIDS drugs approved by the FDA.

Officials from Burroughs Wellcome Co., the manufacturer of AZT, said they arrived at the price for AZT through “the usual factors that influence pricing decisions,” including costs of “developing, producing and marketing the drug, the high costs of research and the need to generate revenues to cover these continuing costs.”

They noted that AZT may be replaced in the future by more effective therapies. “We don’t know what will happen in the next year or two for new therapies--whether this will continue to be the drug of choice, we don’t know,” said T. E. Haigler Jr., president of Burroughs Wellcome.

‘Neglect to the Poor’

But Rep. Henry A. Waxman (D-Los Angeles), chairman of the subcommittee, said: “Giving patients nothing because they have no insurance and no money can be rationalized only as part of a system that provides health miracles to the wealthy and health neglect to the poor.”

Roper, asked who should absorb the costs of the drug if patients cannot do so themselves, replied: “I think we as a society have the responsibility to pay for health care services for those who cannot afford to pay themselves. It’s a responsibility we all share--the federal government, the states, the drug manufacturers and the private sector.”

Waxman said “that could be an excuse for no one in society to do it.”

Since Oct. 14, AZT has been available free on an experimental basis to more than 4,000 individuals with AIDS.