Dec 11, 2015 - instead only allowing purchases at the 340B price through a separate, drop-ship mechanism available throu
December 11, 2015 Senator Susan Collins Chairman United States Senate Special Committee on Aging G31 Dirksen Senate Office Building Washington, D.C. 20510-6050
Senator Claire McCaskill Ranking Member United States Senate Special Committee on Aging G31 Dirksen Senate Office Building Washington, D.C. 20510-6050
Dear Chairman Collins and Ranking Member McCaskill: The National Alliance of State and Territorial AIDS Directors (NASTAD), which represents public health officials who administer state and territorial HIV and hepatitis prevention and care programs nationwide, has been actively monitoring the recent price increase for Daraprim (pyrimethamine), an antiparasitic agent used to treat toxoplasmosis in patients with HIV. Following a recent transfer of ownership of Daraprim to Turing Pharmaceuticals, several state AIDS Drug Assistance Programs (ADAPs), which provide medications to people living with HIV, have experienced difficulty in acquiring Daraprim at the 340B Program discounted price to which ADAPs are legally entitled and therefore depriving some patients access to a necessary medicine. NASTAD is concerned that the staggeringly high market price of Daraprim, now 5000% higher than it was prior to the transfer of ownership, prevents ADAPs from being able to purchase the medication. Indeed, in May 2015, 43 ADAPs indicated that they had direct access to Daraprim at the 340B price. According to Turing, only four ADAPs have been able to access Daraprim at the 340B price following the price increase.1 In addition, the limited distribution model for Daraprim has created access issues for ADAPs. Similar to Medicaid programs, ADAPs are able to purchase drugs at discounted prices via a rebate mechanism. The astronomical price of Daraprim, however, combined with Turing’s obfuscation on the operation of the rebate mechanism, has left ADAPs unwilling to outlay the initial funds to purchase Daraprim in anticipation of an eventual rebate. For patients over 60 kg (132 lbs), federal guidelines recommend three pills of Daraprim per day for initial treatment with the course of treatment lasting six weeks, and then two pills per day for maintenance therapy, lasting at least six months.2 At $750 per pill, an ADAP would be forced to pay $94,500 for initial treatment and at least $270,000 for maintenance therapy, for a total of $365,500 in upfront costs. While the ADAP would be eligible to receive a rebate, ADAPs may not have sufficient funds on hand to front the cost and then seek rebates to mitigate the high price. Further, with no experience in receiving these rebates from Turing, ADAPs are unwilling to assume the risk that Turing will provide prompt and accurate rebates – even though it is required to do so. Due to its high price, insurers are subjecting patients in need of Daraprim to prior authorization and other utilization management techniques. Moreover, expensive drugs such as Daraprim are often subject to burdensome cost-sharing and co-insurance requirements that require patients to pay a percentage of the drug’s cost, sometimes up to 50% of the cost of the drug. ADAPs are allowed to purchase insurance for many clients and with this exorbitant price are thus subject to both new restrictive access and higher co-
insurance policies, impairing the timely treatment of ADAP clients and substantially raising costs to ADAPs that make the co-insurance payments. Prior to the recent price increase, insurers had not limited patient access to Daraprim; restrictions now in place result solely from the price increase. The unconscionable price of Daraprim, combined with discriminatory purchasing restrictions that limit ADAPs’ ability to purchase at the legally-required price, leave some ADAPs unable to obtain access to necessary drugs for some of its most vulnerable patients. NASTAD believes that Turing’s distribution arrangements are in violation of the 340B Drug Discount Program’s non-discrimination provisions. NASTAD understands that, for outpatient prescriptions, Turing has a sole distribution agreement with Walgreens Specialty Pharmacy. However, it appears that Turing has not made the 340B price available to eligible 340B covered entities through Walgreens, instead only allowing purchases at the 340B price through a separate, drop-ship mechanism available through ASD Healthcare. The Health Resources and Services Administration’s (HRSA) regulations prohibit manufacturers from “singl[ing] out covered entities from their other customers for restrictive conditions that would undermine the statutory objective” of the 340B program and from “plac[ing] limitations on the transactions (e.g., minimum purchase amounts) which would have the effect of discouraging entities from participating in the discount program.” (59 Fed. Reg. 25110 (May 13, 1994)) This prohibition, known as the non-discrimination provision, requires manufacturers to make 340B prices available to covered entities through the same distribution channels available to other purchasers. Without this protection, manufacturers could attempt to limit participation in the 340B program by placing additional barriers in the way of covered entities, ultimately harming patients. Indeed, Turing’s restrictive purchasing program for 340B covered entities has harmed patients. Georgia removed Daraprim from its ADAP formulary because it was unable to purchase Daraprim at the 340B price. Georgia, like many states, is only able to purchase drugs through vendors that have gone through state approval processes and therefore is unable to make drug purchases through ASD Healthcare. Because the 340B price was not available through Walgreens Specialty Pharmacy and thus not available through any of the Georgia ADAP’s standard purchasing channels, Georgia was forced to remove Daraprim from the formulary because of its excessive price. ADAP clients in Georgia who need Daraprim must access it through charity care or a patient assistance program, which can lead to delays in care that impact patient health. NASTAD is aware that some ADAPs have been able to establish accounts with ASD Healthcare after receiving special approval from their state purchasing authorities; however, this extra administrative process to receive 340B pricing is precisely the type of discriminatory barrier prohibited in the 340B program. We appreciate your investigation of this matter. Please contact me if you have questions or need additional information. Sincerely,
Murray C. Penner Executive Director, NASTAD 1 http://www.turingpharma.com/media/press-release?headline=texas-hiv-medication-advisory-committee-
unanimously-votes-to-recommend-daraprim%25c2%25ae-be-added-to-its-formulary 2 https://aidsinfo.nih.gov/guidelines/html/4/adult-and-adolescent-oi-prevention-and-treatmentguidelines/322/toxo
