Bayer to Sell Cipro to U.S. Government at 50% Discount
Officials from Bayer AG and HHS yesterday finalized an agreement calling for the drug maker to supply the antibiotic Cipro to the federal government at nearly half its normal cost and to provide further price reductions if additional doses are needed, the New York Times reports. Under the agreement, Bayer will ship 100 million tablets of Cipro by the end of the year for 95 cents a pill and will donate an additional two million tablets beginning next week. The U.S. government had paid $1.83 per pill, with a "6-cent discount for bulk shipments" (Bradsher, New York Times, 10/25). The agreement also gives the government the option to purchase a second order of 100 million tablets at 85 cents each and a third order of the same amount at 75 cents each if it "needs to replenish its stocks" of Cipro, which has been HHS' "chief weapon" against the anthrax exposures in New York, New Jersey, Washington, D.C., and Florida. HHS Secretary Tommy Thompson said that the money for the purchase will come from $1.6 billion in counter-bioterrorism funds that the Bush administration requested last week (Dougherty, Washington Times, 10/25). The first shipment of Cipro will allow the government by January to treat 12 million people for anthrax exposure if necessary, "10 million more than supplies" can currently treat (Carroll/Winslow, Wall Street Journal, 10/25). "This agreement means that a much larger supply of this important pharmaceutical product will be available if needed," Thompson said (HHS release, 10/24).
The Cipro agreement came after Thompson threatened to override the drug's patent if Bayer did not lower the price. The Wall Street Journal reports that some analysts believed that his stance "amounted to a departure from the government's long-standing support of drug company patent rights in disputes over prices." The United States, for instance, has advocated that African countries not override the patents of HIV/AIDS treatments. "If the federal government is going to threaten to break valuable patent rights at the first sign of a crisis, it will likely serve as a significant deterrent to other drug companies who would like to do the 'right thing' and use their R&D capabilities to help the government fight bioterrorism," Nancy Myers, senior political analyst at Lehman Brothers, said. Drug companies, however, offered a "measured" opinion of the Cipro agreement, the Journal reports. A spokesperson for the Pharmaceutical Research and Manufacturers of America said, "We think [Thompson's] remarks reflect the concerns in unusual circumstances and do not set a precedent about law or policy" (Wall Street Journal, 10/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.