Boulder Blues

A Report From Roche's Meeting About Fuzeon Pricing With Heads of Directors of AIDS Drug Assistance Programs and Treatment Activists

January/February 2003

This article is part of The Body PRO's archive. Because it contains information that may no longer be accurate, this article should only be considered a historical document.

On Valentine's, Roche invited state ADAP (AIDS Drug Assistance Program) directors and community activists to a meeting about Fuzeon (T-20, enfuvirtide) pricing at its manufacturing plant in Boulder, Colorado. Unfortunately, only the directors of four ADAPs were able to attend, although these represented the country's largest programs. Lanny Cross from New York, Michael Montgomery of California, Dwayne Haught from Texas, and Paul Arons from Florida made the snowy trek. Illinois could not attend since that program does not forsee any possibility of adding this drug to their formulary, no matter the price. Martin Delaney, Bill Arnold, and Lei Chou were present as members of the Fair Pricing Coalition. Dani Bolognesi, Carol Ohmstede, and Walter Capone attended from Trimeris and David Reddy, Kathy Presto, Georges Gemayel, Eric Lodewijk, John Tayer, Archie Shew, Arnie Doyle, Donny Moss and others from Roche were present.

Roche and Trimeris held a rehearsal meeting the night before and it showed. Their presentations were well prepared and comprehensive. Dani Bolognesi, the chairman of Trimeris, kicked off the meeting with "The Fuzeon Story": the history of the drug from discovery through development. Their excitement about the pending FDA approval was palpable. The chemical structure of Fuzeon was flashed on screen several times to emphasize the SIZE of this thing as compared to other ARVs. One does wonder how it will fit onto the FDA package insert.

The resistance data presented at Retrovirus in relation to a related drug, T-1249, was also discussed. Since it appears that the longer someone is on Fuzeon, the less effective T-1249 will be, concerns were raised about the slow pace in the development of T-1249. Dani indicated that Roche is committed to expediting development of T-1249 and to bring it to market as soon as possible. David Reddy, who oversees global development of HIV drugs for Roche, was asked and confirmed that indeed, T-1249 development will be expedited.

Roche is positioning Fuzeon to be the therapeutic foundation for treatment-experienced patients. Subset analysis from TORO trials with OB (optimized background) suggests that using 2 OB ARVs is just as effective as using 5 OB drugs. Additional details on the cost effectiveness of this strategy will be presented at the next Glasgow Conference. They are aiming for Fuzeon to replace the current megaHAART approach, and are in talks with the VA and Kaiser Permanente regarding that possibility. They are also continuing the development of pharmaceutical peptides by looking at pegylation, pushing towards eventual once-a-week dosing.

Next up were Eric Lodewijk, who runs the Boulder Plant, and Carol Ohmstede of Trimeris. They went into considerable detail about the manufacturing of the drug, from obtaining raw materials from around the world, to retooling the factory and installing new equipment (this was not a new plant built from scratch as previously indicated by Roche), to hiring 300 employees (with half working on Fuzeon). The molecule itself is built in 106 steps, assembled in three sections using the Rosenmound von Braun process, with numerous additional steps required to get to the final product including lots of washing and drying at low temperatures. The entire job takes 6 to 7 months to complete.

David Reddy followed up the tech talk by diving right into the pricing discussion. He presented Roche's pricing philosophy with regard to Fuzeon.

  • It takes 45 tons of raw materials to make 1 ton of Fuzeon.

  • R&D has cost much more than that for the protease inhibitors.

  • The $600 million in R&D breaks down as:

    1% Research,
    55% Development,
    11% Manufacturing,
    11% Phase IV patient support, and
    22% in manufacturing investment.

It was revealed half way through his presentation that the price has already been decided upon: "No, of course I can't tell you what it is!" Reddy said.

He said these factors should be considered before reacting to the price:

  • The price is fair concerning the high cost of manufacturing.

  • The drug is defining the future of salvage therapy.

  • It will be cost effective (data under development).

  • Roche is committed to work with all parties on access. (They will collaborate with BI on tipranavir trials, and will provide drug for that purpose.)

  • The price has to be sustainable for the company. Reddy said the price is based on an "adequate but not aggressive time frame" for generating revenue and the profit margin for Fuzeon will be significantly lower than for other ARVs.

We brought up our concern regarding the possible short life span for Fuzeon in the market, given that other oral entry inhibitors are being developed, and asked how that will impact the price. We speculated that Roche must be patenting every single step along the way and most likely has the market on polypeptides cornered. Reddy seemed to indicate that they are treating this whole line of R&D as one, so the profitability potential spreads into T-1249 and other compounds under development (possibly for other diseases such as Alzheimer's).

Without knowing the actual costs, it was hard to tell from this presentation what the final price will be. Roche seems to be signaling that they are not expecting Fuzeon to be an instant blockbuster, but the lengths they went to convince us of the high cost of bringing Fuzeon to market kept us guessing. At this point in the meeting they assured us that pricing discussions will continue and then herded us out of the meeting room and onto a tour of the plant (in hard hat and goggles). Half way through the tour, David Reddy apologized that he needed to catch a plane due to security concerns at Heathrow Airport. He did not get a chance to hear anything from the ADAP directors, and community members did not get to the meat of our arguments. NOTE TO ACTIVISTS: NEXT TIME THE BIG MAN IS IN THE ROOM, GET RIGHT TO THE POINT! They seem to have this habit of slipping out early. Kathy Presto promised to relay everything and Reddy said he will contact ADAP directors individually.

On to the tour: they showed us giant tanks that hold the raw materials and solvents used in production, different machines that do the assembly of amino acids, and a myriad of dryers and washers, all with little glass windows you can look into and see churning whitish liquids and powders. It's a factory, unlike what I had imagined (pristine labs and glassed off walkways, robots and test tubes). The place smelled like a gas station, with water leaking from ceilings, and a little room with two computers and two workers overseeing the entire process. However, it was quite amazing to see the transition from funky QuickTime movies illustrating the molecular mechanism of fusion to the large-scale production of tons of the drug.

After lunch, each ADAP director told those remaining about the crisis facing their programs. It's heartbreaking to hear the frustration these guys feel in not being able to meet the needs of people they serve. It's one thing to see the numbers, quite another to get a view from inside the programs looking out and forward. Lanny Cross announced that most ADAP directors have gotten together (covering 80% of U.S. clients) and have sent a letter to all the drug companies requesting a meeting to discuss further lowering of prices. (More on this movement and what you can do to help in the weeks ahead!) Roche seemed amenable to further pricing discussions, including possibly offering more discounts for ADAPs.

They also asked Roche to establish a medical criteria for access administered through the central distributor so they won't have to impose separate restrictions at the state level (those that can afford it) since, despite capping the number of slots, this will be the only way that Fuzeon can be covered. Roche's pharmacy distributor will contact each ADAP individually to set up delivery details. Roche said 65 percent of the first 15,000 slots available would go to the U.S., based on HIV prevalence. We told them that European countries are going to take at least a year for price negotiations, and most likely the drug will only be available there to private payers. This is perhaps one of the considerations for us stateside as we think about price control; European countries pay lower prices, but they also get the drug later.

With the Federal Budget allocating an $80 million increase for ADAP, we are still $140 million short for this fiscal year. Fuzeon will only come to most of those who need it at the cost of reduced formularies and stricter financial eligibility criteria. With a scary new Medicaid proposal coming out of the White House, most states will wait until the dust settles before committing to anything major. If the Bush proposals go through, optional services such as prescription drug coverage may no longer be required and states may drop them. Drug companies will no longer be able to count on the automatic coverage for over half of the domestic HIV market. This could have a huge impact on revenue and R&D investment in future therapies. The price of Fuzeon will be the first test of this new reality we live in. One hopes Roche will do the right thing. They've certainly been informed.

Keep up with ADAP news at

This article was provided by Gay Men's Health Crisis. It is a part of the publication GMHC Treatment Issues. Visit GMHC's website to find out more about their activities, publications and services.


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