Firm’s Sharp Price Increase for AIDS Drug Attacked

A small Illinois drug company has touched off a firestorm of criticism by nearly quadrupling the price of one of the most common antibiotics used to treat AIDS patients over the last three years.

Some AIDS specialists and pharmacists say the steep price increases are creating a hardship for patients and raise serious questions about the fairness of the 1983 Orphan Drug Act, under which LyphoMed Inc., of Rosemont, Ill., was granted seven years of exclusive American marketing rights for the drug.

The antibiotic, pentamidine, is used to treat Pneumocystis carinii pneumonia, which is the first sign of AIDS in about three-fifths of all AIDS patients and a frequent cause of death.

Sold in Vials

LyphoMed sells pentamidine in vials containing 300 milligrams--about 1/100th of an ounce--of drug powder. A vial now costs pharmacies $99.45. By comparison, in October, 1984, when LyphoMed first sold pentamidine in the United States, the cost was $24.95 a vial. The prices pharmacies charge patients vary, but range from $100 to $125 per vial, or more.

Thus, drug costs for a typical three-week course of intravenous treatment for pneumocystis, using one vial of pentamidine a day, have increased from about $500 to more than $2,000 within 36 months. During this time, the number of reported AIDS cases in the United States has increased from about 6,000 to more than 44,000.

LyphoMed neither invented pentamidine, which has been widely used in Africa since the 1940s for sleeping sickness, nor conducted the studies that initially proved its effectiveness against pneumocystis.

“Without reservation, this is needless and shameless price-gouging at a time when the use of pentamidine has already increased exponentially and we are trying to keep down the costs of treating patients with AIDS,” said Dr. Harry Hollander, chief AIDS physician at the University of California Medical Center, San Francisco.

‘Abuse of the System’

“They are exploiting a patient population with a very severe illness,” said Michael G. Cunningham, an assistant director of the university pharmacy. “They were given exclusive marketing rights for a product they didn’t develop. There seems to be an abuse of the system here.”

John Kapoor, LyphoMed’s president, said the price increases were necessary to pay for “millions of dollars” in “unanticipated” expenses for ongoing clinical studies of pentamidine and for educational programs. The company has also hired about 25 drug detail men to promote the drug and answer physicians’ questions about it.

“LyphoMed is a very small company,” Kapoor said. “Unlike a large drug company, we cannot support these expenses from general sales. The product has to support itself. That is all it is doing. . . . Maybe we have not done a good job explaining to people what is happening to the product.”

According to Kapoor, LyphoMed purchased pentamidine in the past from Aldrich Chemical Co. in Milwaukee, but now has other suppliers.

Aldrich currently sells bulk pentamidine for $20 a gram--or $6 for the medication contained in each 300-milligram vial of the drug, according to Irwin Klundt, an Aldrich vice president, who said the price “has not changed for some time.” This price may be significantly discounted for large orders.

Authority for Sales

Klundt added that Aldrich can sell bulk pentamidine only to drug companies and physicians that have specific authority to buy it from the U.S. Food and Drug Administration.

An FDA official said the agency, which recruited LyphoMed to market pentamidine, is powerless to do anything about the price increases. “We don’t get involved in the price firms charge for their products,” said Neil Abel, deputy director of the FDA’s office of orphan products development.

Demand for pentamidine has increased dramatically in recent months amid preliminary scientific reports that an aerosol spray of the antibiotic is effective in both treating and preventing the recurrence of pneumocystis infections in AIDS patients. LyphoMed’s pentamidine sales are expected to grow from $6 million in 1986 to $15 million this year and to $20 million to $25 million in 1988, said Mary L. Yost, an E. F. Hutton securities analyst in San Francisco.

The inhalation therapy avoids the often severe side-effects of both intravenous pentamidine and trimethoprim-sulfamethoxazole, the other leading medicine for pneumocystis, Dr. A. Bruce Montgomery of San Francisco General Hospital said. It may eventually lead to significant savings in hospital costs by making outpatient therapy of the pneumonia possible.

In addition, according to Hollander, there has been “a swell of underground enthusiasm” among both AIDS specialists and patient advocacy groups to use aerosolised pentamidine as a preventive measure for asymptomatic individuals infected with the AIDS virus, not just those who have developed severe AIDS-related illnesses.

“The appropriate scientific studies have yet to be completed but, in the minds of many, inhaled pentamidine is now de rigueur therapy,” Hollander said.

The experimental treatments are given by dissolving pentamidine powder designed for intravenous administration in sterile water. The patient then inhales the medicine through an inexpensive device that disperses the medication into a fine mist.

Preventive Treatments

The medication cost for a three-week course of once-a-day experimental aerosol treatment of an established pneumocystis infection is $4,200 at current LyphoMed prices. The medication cost for an experimental preventive treatment ranges from $20 to $100; such treatments are repeated at intervals ranging from weekly to monthly.

AIDS patients who receive aerosolised pentamidine or other medicines as part of experimental drug trials usually do not have to pay for the treatments. But physicians are free to charge other AIDS patients for such treatments. This is because pentamidine, unlike many experimental AIDS drugs, is an approved drug and therefore can be prescribed by any licensed physician.

In addition to the increasing medication costs, some physicians and hospitals are charging patients substantial markups for aerosol pentamidine treatments, Montgomery said. “The charges I have heard range from $35 for a (preventive) treatment to $400 for exactly the same thing. . . . That is outrageous.”

Pentamidine was synthesized in the 1930s by May & Baker, a British pharmaceutical company. Subsequently, it was found to be an effective therapy for African sleeping sickness and, over the last 50 years, has been given to millions of Africans.

May & Baker currently sells the drug for 10.55 pounds (about $18) a vial, according to James Grieg, a company official.

Rarely Used Before AIDS

Pentamidine’s effectiveness against pneumocystis infections, which also afflict some patients with leukemia and other cancers, has been known for many years. But the drug was rarely needed in the United States until the acquired immune deficiency syndrome epidemic was recognized in 1981.

As requests for the drug increased, the federal Centers for Disease Control obtained pentamidine from May & Baker in Britain and distributed it in the United States. Soon, however, the CDC and the FDA began to search for an American supplier to meet the growing demand. They used as an incentive the marketing advantages granted by the 1983 federal Orphan Drug Act.

LyphoMed was granted FDA approval to market pentamidine in October, 1984. The company sells a variety of products such as generic drugs and intravenous nutrients to hospitals. It is the 39th largest U.S. drug company based on 1986 sales of $129 million, according to a survey by Medical Advertising News, a trade journal.

LyphoMed first priced pentamidine at $24.95 a vial, according to Kapoor. Subsequently, the price was increased to $39.49 in May, 1985, $54.79 in July, 1986, $69.95 in April, 1987, and $99.45 in August, 1987.

The most recent price increase, of 43%, was announced weeks before a highly favorable San Francisco General Hospital study about aerosolised pentamidine was published in the Lancet, one of the world’s leading medical journals.

But in the last few weeks, LyphoMed’s exclusive position as the American supplier of pentamidine has been placed in jeopardy. Earlier this month, Fisons Corp. of Bedford, Mass., a subsidiary of a British drug company of the same name, received FDA permission to develop aerosol pentamidine as an orphan drug for preventive therapy of pneumocystis.

Under federal law, multiple drug companies can obtain permission to research the same orphan drug for a particular use. But only the first company to gain FDA approval of the therapy gains the seven years of exclusive American marketing rights. Any others are shut out of the market.

Times staff writer Tyler Marshall in London contributed to this story.