Pushing the envelope a bit too far.
July 8, 2005
Maker of Heart Drug Intended for Blacks Bases Price on Patients' Wealth
By STEPHANIE SAUL
The company that recently broke new ground by winning federal approval for the first drug intended for African-Americans could now be entering new territory with a controversial pricing system for the medicine.
The maker, NitroMed, has set the price of its heart-failure drug BiDil at $1.80 a pill, significantly higher than what analysts had expected and nearly twice as much as some other heart-failure treatments. Depending on the dosage, that would make the cost of taking BiDil at least $5.40 and maybe as much as $10.80 a day.
The medication, a combination of two generic drugs, is planned for market introduction by Monday.
NitroMed says as many as 750,000 black Americans suffer from heart failure and are candidates for the drug. But the company has established an unusually generous charity program to go along with the drug's high price, meant to make it affordable to the 75,000 or so target patients the company estimates have no prescription drug insurance coverage.
Any patient without prescription drug coverage will be able to get BiDil for $25 a month. Poor patients without prescription drug coverage will get it free, the company said yesterday.
"We believe it's a mandate," said B. J. Jones, the marketing director for NitroMed, "that BiDil should be available for every black heart-failure patient."
But some critics view the drug as too expensive, particularly in view of the past public support of BiDil by black doctors' groups.
"I'm disappointed in the decision to price BiDil beyond the financial means of many patients who might benefit," said Dr. Steven Nissen, a Cleveland Clinic cardiologist who led a Food and Drug Administration advisory panel that approved the drug last month.
Dr. Gregg Bloche, a medical ethicist at Georgetown University Law Center, said the charity program was a way to blunt criticism about the drug's cost.
"It's a vent, a kind of steam vent, to protect you against pressure building up," Dr. Bloche said.
David Moskowitz, a financial analyst who has raised estimates of sales and profit for NitroMed as a result of the pricing structure, noted that NitroMed has built subsidies into its business model for BiDil. "I think that's appropriate," he said.
"It is like some welfare models, where some people are taxed and others benefit," he said. "One can look at it as pricing where the company will be subsidizing its patient assistance program with some of the dollars from private insurers and government programs."
Mr. Moskowitz had predicted that BiDil would cost only about $3 a day, based on the costs of heart-failure treatments currently on the market: Coreg by Glaxo Smith Kline and Inspra by Pfizer. At $1.80 a pill, however, the cost will be substantially higher. BiDil is to be taken at least three times a day. Some patients will take two pills three times a day.
The higher pricing strategy for the drug, which the company said it would fully explain in an investor conference next week, has led other analysts to revise their sales estimates for BiDil, with many forecasting higher revenues than before.
Pacific Growth Equities, which has an investment banking relationship with NitroMed, raised its annual sales estimate to $450 million to $500 million, up from $300 million previously, according to Liana Moussatos, an analyst.
In a report to investors on Tuesday, Mr. Moskowitz noted that a NitroMed statement last Friday announcing the $1.80-a-pill price was released in concert with a statement endorsing the company's prescription assistance program from a Washington-based organization called the National Minority Health Month Foundation Minority Coalition for Prescription Drug Assistance.
NitroMed has aggressively solicited the support of black physicians and politicians in promoting BiDil, which the Food and Drug Administration approved last month as the first drug for use by one race. Its approval followed a research study of 1,050 black patients, called the African-American Heart-Failure Trial, which showed it reduced mortality by 43 percent over 18 months.
Mr. Jones, the NitroMed marketing executive, said the company wanted its prescription assistance program to be "industry leading" based on the results of that clinical trial.
While all major drug companies have prescription assistance programs, Mr. Jones said that NitroMed's program was more generous than the industry standard. Generally, he said, the programs set a threshold of twice the poverty level.
NitroMed's program will provide free BiDil to anyone whose income falls below three times the poverty level, according to Mr. Jones. The company will take the added step of providing the drugs for $25 a month to anyone who does not have insurance, even those whose incomes are higher.
The $25 plan is for those who "unfortunately, so often, fall through the cracks," Mr. Jones said, "the quote, unquote working poor, with enough to keep food on the table but not enough to get the appropriate insurance."
Dr. Nissen and Dr. Jonathan Sackner-Bernstein, another cardiologist who served on the F.D.A. advisory panel that recommended BiDil's approval, raised concerns that not all the eligible patients would end up participating in the prescription assistance program.
"I'm skeptical about these plans," said Dr. Sackner-Bernstein, a heart-failure specialist at North Shore University Hospital in Manhasset, N.Y. "Since they require doctors to send in forms, they don't work as well as they are supposed to."
NitroMed also runs another risk by pricing the drug high. BiDil is a combination of two generic drugs, hydralazine and isosorbide dinitrate. While the generics are not available in the exact doses contained in a BiDil pill, some doctors are willing to experiment with higher and lower doses or split generic pills to achieve similar results.
"The way I'd look at it, those individual components, if purchased generically, cost under 25 cents a tablet," said Dr. James E. Hartert, the chief medical officer for Prime Therapeutics, a prescription drug insurance program in St. Paul. "That's a big difference from $1.80."
Dr. Hartert said his company had not yet determined whether BiDil would be included on its formulary - the list of drugs its insurance will cover.
But Dr. Nissen said the cost considerations could drive many physicians to use the generic drugs, even though the combination is more convenient.
"It's just not worth spending an extra $100 a month to avoid taking a few additional pills," Dr. Nissen said.
Copyright 2005 The New York Times Company