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Bristol-Myers’ $1 Billion Drug at Center of Debate Over HIV Treatment Costs, Life-Span of Patients

Should a lower-cost combination of mostly generic pills for treating AIDS replace a more expensive, but convenient brand-name pill? By doing so, the U.S. healthcare system could save an estimated $920 million the first year if every eligible patient switched. At the same time, the change in regimens and lessened effectiveness of one of the generics could increase risks, and shave approximately four months off a patient’s lifespan.

Such a choice points up the stark direction the societal healthcare discussion is increasingly taken. And the details in comparing HIV treatments are weighed in a study in the Annals of Internal Medicine, which examined the advantages and disadvantages of taking Atripla, which combines three brand-name antiretrovirals – tenofovir (Viread), emtricitabine (Emtriva) and efavirenz (Sustiva) – or a soon-to-be-available option featuring generics.

Specifically, the study notes that a generic form of Epivir, or lamivudine, an antiretroviral with a similar mechanism of action as Emtriva, became available a year ago. And a generic version of Sustiva is expected in the near future. Along with Viread, the two generics could offer a lower-cost alternative to Atripla. For the record, Viread and Emtriva are sold by Gilead Sciences (GILD), while Sustiva and Atripla are sold by Bristol-Myers Squibb (BMY), which chalked up sales of $1.1 billion for Sustiva and its related products for the nine months ended September 30, 2012, up 7% from a year earlier. Bristol-Myers' flagship drug, Plavix, which recently lost patent protection, saw its sales plunge by more than half in the nine months, to $2.5 billion.

BMY Revenue TTM Chart

BMY Revenue TTM data by YCharts

Given that the cost of antiretrovirals in the US was roughly $9 billion in 2011, a lower-cost combination may be a tempting option for third-party payers. Using a mathematical model, the researchers found that switching all HIV-infected patients in the US to the generic-based combo would produce lifetime savings of $42,500 per patient. And to mollify concerns about lifespans and risks, they say savings could be used to attack chronic hepatitis C.

“In an era in which dedication to the national HIV mission requires ‘redirected’ financing, the potential $1 billion savings from generic-based regimens might be an efficient source available for national reinvestment,” write the authors. How so? For every 15 people switched to a generic-based regimen – with potential annual savings of $6,100 per patient – one person co-infected with HIV and HCV could be potentially cured of chronic hepatitis C.

The study noted that the Atripla branded regiman yields a so-called quality-adjust life year cost of $114,800, which exceeds the $100,000 benchmark that is generally preferred for weighing cost effectiveness of medicines. And while the study did not calculate societal savings beyond the first year, lead author Rochelle Walensky says the annual savings thereafter could be expected to be similar (here is the abstract).

Looked at another way, the approximate cost of Atripla is $15,000 per patient per year, compared with about $9,000 for the generic-based regimen, a $6,000 difference. To reach these calculations, the researchers made various assumptions about pricing, since generic versions of Sustiva are not yet available in the US, explains Walensky, a Harvard University medical school professor and infectious diseases physician at Massachusetts General Hospital.

Of course, the study does note the potential downside. For one thing, patient adherence could suffer as three pills, instead of one, would be required, leading to treatment failure. And laboratory studies have also found that Epivir may be slightly less effective and more vulnerable to the development of drug-resistant viral strains than Emtriva. And then there is the loss of four months of life, on average, that may occur.

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com.

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