The rights are transferred with the stock when it is sold and the new shareholder owns rights just like anyone else.
Otherwise Agouron would not have enough shares to protect itself against a hostile takeover. I was wrong.
Sparing the Protease for Some, Spoiling the Price for All
Linda Grinberg
GMHC Treatment Issues, Vol. 12, No. 9 - September 20, 1998
DuPont Pharmaceutical's new drug efavirenz (Sustiva) has
enjoyed a favored position among treatment activists, offering
both high levels of antiviral activity and a simplified dosing
regimen. The company has worked to build a harmonious
relationship with the community by being responsive to
community concerns and agreeing to a generous expanded access
program. Just days before the drug's expected approval by the
FDA, however, that honeymoon quickly soured and a contentious
battle over pricing began. The company launched the product at
a price far exceeding the others in its NNRTI class (nevirapine
and delavirdine), a price that approached the cost of protease
inhibitors (at least $5,000 per year retail).
The first hint of these changing attitudes came when the DuPont
PR machine cranked into high gear in the weeks preceding the
World AIDS Conference in Geneva. A week prior to the
conference, treatment activists were invited to the company's
headquarters in Wilmington, Delaware, for a sneak preview of
the "exciting" 24-week Study 006 data. This trial compared
efavirenz/AZT/3TC, indinavir/AZT/3TC and efavirenz/indinavir.
The preliminary data from the efavirenz/AZT/3TC arm seemed
impressive in this nearly treatment-naïve population, equal to,
or slightly better than, the other two arms using indinavir.
Such results prompted the company to herald a new era of
"protease-sparing" treatment regimens. But questions of
durability of response and whether this protease-sparing
regimen will be effective in treatment-experienced populations
remain unanswered (see article, page 3). DuPont also avoided
comparing efavirenz directly to others in its own class,
obscuring its relative worth.
Nonetheless, "protease-sparing regimens" and "once-daily
dosing" became media buzzwords in Geneva, fueled by a slick
promotional campaign, press releases, dazzling exhibits, and
wining and dining U.S. attendees at five-star restaurants. The
timing was propitious: conference presentations on increased
protease inhibitor failures, due to noncompliance and
drug-resistant HIV, and on such side effects as fat
redistribution ("buffalo humps" and "protease paunch") raised
serious doubts about the wisdom of protease inhibitor therapy.
Back on the home front, a marketing research firm had begun
testing the waters of higher pricing, surveying people with HIV
and posing such pointed questions as, "If you could take a
once-a-day dosing regimen, without a protease inhibitor, would
you be willing to pay $3,770 per year?" Inquiries were also
made to state AIDS Drug Assistance Programs (ADAPs) and
Medicaid programs to assess how high a price the market would
be willing to bear.
No matter how desirable the drug looks based on interim data,
activists were adamant that such results cannot justify another
increase in the total cost of therapy. Although the overall
cost when using the drug in the proposed "protease-sparing"
regimen promoted by the company may approximate the price of
similar protease-containing regimens, this proposed use likely
represents a minority of the drug's sales. For people with
prior therapy, efavirenz most likely will be used in
conjunction with, rather than as a replacement for, a protease
inhibitor. Many researchers believe such a combination would be
better even in drug-naïve patients. Thus, the high premium
DuPont is charging for efavirenz as compared to other drugs in
its class will represent a major increase in the total cost of
therapy.
The exceptionally high price sets a new standard for HIV drug
pricing if left unchallenged. It signals to other companies
that they may charge more for new and existing HIV drugs. This
sort of inflationary pressure would put an enormous strain on
ADAP, Medicaid programs and private insurance plans. Privately
insured individuals also would face increased financial
pressure since they would have to spend more to meet copayment
requirements and may risk maxing out on their insurance drug
coverage.
When rumors began circulating of an impending high price, a
community working group issued a "Fair Price Consensus
Statement" that has now been endorsed by over 100 organizations
worldwide. The statement demands that both efavirenz as well as
the new nucleoside analog expected shortly from Glaxo, abacavir
(also known as Ziagen) be priced no higher than similar drugs
in their respective classes. On September 10, activists met
with DuPont officials in Wilmington, but both the consensus
statement and their impassioned speeches fell on deaf ears.
Even though it was obvious that activists had come to
Wilmington primarily to discuss price, and not just trial data,
not one person from DuPont with authority over pricing was in
attendance. The meeting ended with a demand to meet with
Nicholas Teti, DuPont Pharmaceuticals' president, but
arrangements for the encounter broke down as DuPont rapidly
moved toward launching its new product.
Community action on pricing is, if anything, long overdue.
Despite sporadic protests from individual groups, the community
has not taken coordinated action against unfair pricing for
several years. The effort around efavirenz should provide the
impetus for people with HIV, activists and AIDS service
organizations to confront the exceptionally high cost of
antiviral therapy. The prices established in the U.S. have an
enormous worldwide impact. HIV treatment is almost completely
out of reach for the vast majority of infected people in
developing countries -- who make up 90% of the global total.
Unaffordable drugs are essentially ineffective, no matter how
good they look in clinical trials.
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