America Living With AIDS

expensive HIV-related drugs: (1) adequately reimburse patients for the
purchase of drugs required in the prevention and treatment of HIV disease,
including clotting factor for
hemophilia; (2) undertake, through
the Department of Health and Human
Services, a program for the consolidated purchase and distribution of drugs
used in the prevention and treatment
of HIV disease; (3) amend the
Orphan Drug Act to set a maximum
sales cap for covered drugs.
Adequate Reimbursement
for HIV-related Drugs
While advances in treatments and
technology have made more HIVrelated drugs available, they are for
many unaffordable. Many people lack
health insurance and others have
selective insurance policies that do not
cover the cost of drugs (or at least the
cost of certain kinds of drugs). In
addition, state-funded programs operate on very limited budgets. Adequate
reimbursements and improved payment mechanisms must be explored.
For example, advances in technology have made clotting factor for people
with hemophilia free from HIV but at a
tremendous economic cost. Virally
attenuated clotting factor now costs
$60,000 to $100,000 per year simply to
meet the basic needs of one person
with severe classical hemophilia. Three
years ago the Presidential Commission
on the HIV Epidemic recommended
that the Health Care Financing Admin
istration and Health Resources and
Services Administration "develop alternative payment mechanisms to make
clotting factor treatment affordable for
patients." Notwithstanding this recommendation, nothing has been done.
Meanwhile, insurers have become more
selective, many patients have reached
their lifetime caps on insurance, and
state-funded programs to provide supplemental assistance are running into
the same budget difficulties that are
affecting every other state and local
assistance program.
Consolidated Purchase
of HIV-related Drugs
A consolidated purchase of HIV-related drugs would enable the federal government to negotiate reduced costs for
HIV drugs by offering pharmaceutical
manufacturers volume sales. This
could be done through a new mechanism involving a federal agency or
through the Medicaid program. There
are a number of precedents for this
type of approach. One example is the
federal purchase of childhood vaccines.
The federal government, through
CDC, buys childhood vaccines
through negotiated open-ended contracts with large guaranteed minimum
purchases. CDC offers this consolidated purchase option to the states on a
voluntary basis. All fifty states have
opted to participate in this program.
By purchasing in bulk, the cost of a
complete vaccination series is reduced
by approximately 40 percent per child
over the private-sector cost.
Medicaid programs in states that
pay for prescription drugs currently
pay the full retail price for HIV drugs.

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