PAGE ONE -- Impotence Pill Worries Insurers
HMOs don't want to foot whole cost
Carl T. Hall, Chronicle Staff Writer ÿSaturday,ÿMarch 7, 1998
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As a new pill for male impotence nears pharmacy shelves, health insurers are struggling to figure out how much they will pay for their customers to have sex.
The drug, Viagra, could be cleared for sale by the end of this month and appear in pharmacies by midsummer. It is expected to sell for $10 to $20 per pill.
Oakland-based Kaiser Permanente, the nation's biggest HMO, has tentatively decided to reimburse only half the cost of Viagra.
Kaiser, like the rest of the managed-care industry, finds itself in the awkward position of trying to formulate a reimbursement policy that will pay for legitimate needs without encouraging recreational or experimental use of the new drug.
For other drugs, most Kaiser patients pay only $5 for each prescription, which usually covers enough medication to last a month or more.
Viagra would be prescribed for use ''as needed,'' assuming the Food and Drug Administration, as expected, approves its sale. The drug, manufactured by Pfizer Inc., was granted priority review last fall.
Known generically as sildenafil, Viagra would be the first FDA- approved pill for erectile dysfunction, said to afflict some 18 million men in the United States, including an estimated 60 percent of men over age 60.
The pill has been touted for months as a potential blockbuster capable of generating annual worldwide sales of $4.5 billion by 2004, according to Wall Street analyst David Saks at Gruntal & Co.
The advance buzz has helped double the price of Pfizer stock during the past year. But health maintenance organizations are balking at having to foot the bill.
''If money were no object, we'd just pay for everything, but there have to be some controls,'' said Alan Jacobs, director of pharmacy operations at Health Net, based in Woodland Hills.
Dr. William Elliott, a Kaiser physician in Novato who chairs a regional panel for reviewing new treatments, explained that Kaiser settled on the 50 percent reimbursement plan in part because that is the norm for certain infertility procedures.
Kaiser wrestled with limiting coverage to a certain number of pills per month. But Elliott said nobody could agree on how much medically assisted sex might be deemed appropriate.
That doesn't mean doctors will be free to prescribe unlimited dosages. The limits will depend on the risk of side effects, which are thought to be minimal but are still unknown.
The FDA is expected to allow Viagra to be used no more than once every 24 hours, but some participants in early studies used it as often as three times a day. The typical American man is said to have sex about once a week, or once a month for older men.
Because it's so easy to use, doctors and insurers fear that men will take it more frequently than once a day and that some men who don't need it will use it recreationally. Runaway use could lead to unknown side effects and skyrocketing costs.
''There is a high potential for what we would call inappropriate use of this pill,'' Jacobs said.
Some even fear that women will try the pill, though there is no evidence that it might enhance the female orgasm.
Pfizer is said to be testing the pill's effects on female sexual dysfunction -- a rumor the company has not confirmed.
Saks, the Wall Street analyst, said his $4.5 billion sales estimate for Viagra includes $336 million for female consumption, along with $3.4 billion in ''recreational use'' in males.
''Is this really a drug that should be covered by a health plan?'' asked Health Net's Jacobs. ''Is this going to keep you healthy? Or is this more a patient-preference drug, and not really terribly important to the patient's well-being?''
Overuse has not been a concern with existing FDA-approved impotence drugs and devices.
The traditional treatment is injecting the drug alprostadil into the penis with a needle.
A newer method for delivering alprostadil is a suppository called Muse, made by Vivus Inc. of Mountain View.
Muse costs about $130 for a six- dose box of plastic applicators, used to insert a pellet into the urethra a few minutes before an erection is desired.
Although Vivus says its device often becomes part of foreplay among experienced users, Ron Yukelson, a spokesman for Health Net, said it is generally not considered much fun.
''It's unpleasant enough,'' he said, ''that people are only going to use it for medical benefit.''
The new pill is another story.
''This is what everybody has been looking for -- an oral drug with basically no side effects that's effective in a significant number of patients,'' said Dr. Myron Murdock, national medical director for the Impotence Institute of America, a nonprofit organization financed partly by grants from impotence-treatment manufacturers.
Viagra is intended mainly for those who have difficulty achieving erection because of cardiovascular problems or some other medical condition affecting blood flow.
The pill is designed to block a chemical, found mostly in the penis, in a way that makes it easier to achieve an erection from ordinary stimulation.
Men are instructed to take the pill about an hour before sex.
Like most other HMOs, Health Net has not yet decided exactly how to control Viagra costs without seeming to dismiss the medical legitimacy of impotence.
''There are certainly patients out there who, from a psychological standpoint, would do well with some help. Some others would just like to be more active more times during the day, and that's not appropriate (for HMO coverage), in my mind,'' Jacobs said.
Insurers are covering the cost of injections and Muse like any other prescription medication.
But legally, they may have to reduce reimbursements for those treatments if they only cover half the cost of Viagra, Elliott said.
Pfizer declined to comment, citing the pending FDA application. Urologists who have studied the pill in action said HMOs are wrong to clamp down too hard, even if some restrictions may be unavoidable.
''If you look at the scientific data on the pill, and you know how it works, you will see there is no recreational aspect to this at all,'' said Dr. Harin Padma-Nathan, director of the Male Clinic, a private research and treatment facility in Santa Monica.
Viagra, he added, ''is not an aphrodisiac.'' |
