Under increasing pressure from AIDS activists, the medical community and the federal government, Burroughs Wellcome Co. announced Monday that it will reduce the price of its expensive antiviral drug AZT by 20% effective immediately.
The drug had been costing the average patient with full-blown AIDS about $8,000 a year.
AZT, the only antiviral drug approved to fight the deadly disease, has been licensed since 1987 to treat patients with fully developed AIDS, who number about 50,000 in the United States. New research findings released in the last month, however, have shown the drug to be dramatically effective in delaying the onset of the disease in individuals infected with the human immunodeficiency virus and in slowing its progression in people suffering from the early stages of illness. The drug was also found to be effective in lower doses.
AZT's market could expand to about 600,000 of the estimated 1.5 million infected individuals in this country. At the lowest possible doses and with the new price cut, the drug will have a wholesale cost about $2,200 a year per patient, Burroughs Wellcome said.
When AZT was first approved, company officials defended its high price by saying that its research costs were expensive and that the drug would have a limited market. Further, they said, they feared that AZT would be short-lived as other antiviral drugs were developed.
Burroughs Wellcome officials said the new research had persuaded the company to lower the price.
"Although the precise timing and total number of patients remain uncertain, it now appears the number of patients on (AZT) will be growing considerably over time," said T. E. Haigler Jr., president and chief executive officer of the company. "The expected growth in patient population, coupled with recent production economies, will reduce somewhat our financial risk and will remove some of the uncertainties which existed when this drug was first introduced."
With the prospect of enormous profits from the sale of AZT to an additional hundreds of thousands of people, Burroughs Wellcome in recent weeks has become the target of numerous protests. AIDS activists launched a boycott of the company's other products, and government lawyers said they were considering invoking an 80-year-old law that would enable the government to ignore the patent rights of the company and have the drug made by another firm at a lower price.
A coalition of AIDS activists met Sept. 5 with company officials at the firm's headquarters in Research Triangle Park, N.C., to urge a price cut. But many of them came away angry at what they believed to be the company's unwillingness to make a change.
About the same time, Rep. Henry A. Waxman (D-Los Angeles), chairman of the House Energy and Commerce subcommittee on health, wrote Burroughs Wellcome that he intended to re-examine the price issue and scheduled hearings on the subject for early next month.
"This is a good first step, but I think the company can do better," Waxman said Monday.
Health and Human Services Secretary Louis W. Sullivan called the announcement "good news for those infected with HIV who can benefit from AZT treatment, and it is good news for the health care system as a whole."
Activists have contended that Burroughs' pricing was especially unfair because the company neither invented the drug nor discovered its usefulness against HIV. The drug was invented in 1964 at the Michigan Cancer Foundation and, after failing as a cancer drug, sat on the shelf until 1985, when Burroughs sent it to a government lab that was screening compounds for possible application against AIDS.
Burroughs' pricing so upset government officials that they began inserting "reasonable price" clauses in licensing agreements for other drugs developed with government assistance, including the promising AIDS antiviral agents DDC and DDI.
Like Waxman, many AIDS activists and others said they are pleased at the price reduction but complained that it did not go far enough.
"This is a wonderful indication of good faith on the part of Burroughs, but I don't see this as the end of the discussion of price controls for live-saving drugs in the midst of a public health emergency," said Jean McGuire, executive director of the AIDS Action Council, one of those who met with company officials two weeks ago.
Mark Harrington of ACT UP (AIDS Coalition To Unleash Power), whose members staged noisy demonstrations against Burroughs in New York, San Francisco and London last Thursday said, "Twenty per cent isn't enough."
Martin Delaney, the founder of Project Inform in San Francisco, called the price cut "welcome," but added, "The discussion isn't over."
Mervyn Silverman, president of the American Foundation for AIDS Research, said, "To be fair, and to put AZT within reach of most people with HIV, the price has to be reduced much further."
The company, which first cut the drug's price by 20% in 1987, said the lower dosages used in the most recent studies would reduce the cost to about $6 a day with the new price cut for the majority of individuals needing the drug. The company said this "would represent more than a 70% price reduction in cost of therapy as a result of price decreases and reduced dosage since the drug was first marketed."
McGuire predicted that Burrough's action will make it easier to persuade Congress to extend a federal AZT subsidy program, whose funding will run out at the end of this month.
The Senate Appropriations Committee recently voted to provide $30 million for the program, but the House must also agree. Under the plan, individual states would be required to provide matching funds, making a total of $60 million available for purchases of the drug.
Marlene Cimons reported from Washington and Victor F. Zonana from San Francisco.