October 26, 2001
Bayer Halves Price for Cipro, but Rivals Offer Drugs Free
By KEITH BRADSHER
http://www.nytimes.com/2001/10/26/business/26CIPR.html?todaysheadlines
WASHINGTON, Oct. 25 � When Bayer agreed on Wednesday to sell 100 million
tablets of its anthrax medicine, Cipro, to the government for 95 cents
apiece, Bayer and the Bush administration said the deal assured an ample
supply at a very low price.
But while Bayer nearly halved its previous price, three big pharmaceutical
companies have since stepped forward to offer large quantities of their
antibiotics free if the Food and Drug Administration will approve their use
for the treatment of anthrax. Executives in the generic drug industry say
Bayer is still at least breaking even and may even be making a large profit.
And some infectious-disease experts warn that Bayer remains unable to supply
enough Cipro if terrorists start releasing new strains of anthrax that are
resistant to other antibiotics.
Tommy G. Thompson, the secretary of health and human services, strongly
endorsed the Bayer deal today. "If you can get a company to reduce its
price from $1.75, to 95 cents, for the first 100 million � and I hope that's
all we'll need � then that's an excellent deal," he said.
Bayer officials did not return nearly a dozen calls for comment today, but
said on Wednesday that they had happily made concessions for the good of the
nation in their negotiations with Mr. Thompson.
"I was smiling going in because how often in your life do you and your
company have an opportunity to make a difference," said Helge H. Wehmeier,
Bayer's chief executive of American operations, who refused to discuss
whether Bayer was making a profit on the deal.
Some executives in the generic drug industry, like Bruce L. Downey, the
chairman and chief executive of Barr Laboratories (news/quote), say Bayer's
price is comparable to what they might charge to cover their costs and make
a modest profit. A few executives suggest that Bayer might even be making a
large profit on the pills, because Bayer manufactures by the ton the raw
material for Cipro, ciprofloxacin, and this creates considerable economies
of scale.
Agnes Varis, president of Agvar Chemicals, a pharmaceutical trading company
in Little Falls, N.J., said ciprofloxacin costs 12.5 cents to 20 cents a
tablet in global markets. It is manufactured by dozens of factories around
the world because Bayer's patent has expired in practically every country
except the United States, which allows longer patents than do most
countries. Cipro was approved by the F.D.A. in 1987.
The raw material can probably be manufactured by the ton by Bayer's own
factories for 5 cents or less a tablet, she said. But raw materials are not
the only cost. It costs another 5 to 80 cents a tablet to blend the raw
material, make tablets, test them for safety and chemical stability and meet
government regulations.
Patented drugs like Cipro cost far more than do generic drugs partly because
pharmaceutical companies need the profits to pay for the research to
discover new medicines. Bayer also agreed to supply subsequent Cipro
shipments if needed at 75 cents or 85 cents apiece and to rotate inventories
for freshness.
The Bayer deal on Wednesday included the donation of two million tablets
beginning next week. But that offer has been quickly upstaged. Johnson &
Johnson (news/quote) announced late on Wednesday that it would provide up to
100 million tablets of its Levaquin free if the F.D.A. approved its use for
anthrax. Bristol-Myers Squibb (news/quote) said today that it would provide
free Tequin to anyone exposed to anthrax if the F.D.A. approved it for
anthrax.
Dr. Sandro K. Cinti, a specialist in infectious diseases at the University
of Michigan and a member of Michigan's bioterrorism task force, said that
Tequin and Levaquin were chemically very similar to Cipro and were
considerably newer than Cipro. "They would be at least as effective and
possibly more effective," than Cipro, he said.
GlaxoSmithKline (news/quote) also said today that it wanted the F.D.A. to
approve two of its older medicines for anthrax and would provide free all
the medicine the government needed to treat anthrax. Eli Lilly and Pfizer
(news/quote) offered to provide drugs at cost.
"People need to know that there are drugs other than Cipro, that the supply
will not be a problem and that these drugs will be available to the
government at a reasonable price," said Henry A. McKinnell, chairman of
Pfizer. "We don't intend to make a profit on this threat to the nation."
While the various offers of free drugs are generous, they could also benefit
the companies by raising sales as the public becomes aware of their brands.
Dr. Cinti and other experts also questioned whether the government was
buying enough Cipro from Bayer. Federal health officials initially
recommended that anyone exposed to anthrax take two Cipro tablets a day for
60 days. But the government is now recommending that someone exposed to
anthrax take only two Cipro tablets a day for 5 days and then switch to
other antibiotics for 55 more days if laboratory technicians decide that the
type of anthrax is vulnerable to other antibiotics.
Federal officials say all the anthrax discovered so far is vulnerable to all
antibiotics. But lingering concerns remain about what became of the special
strains of anthrax created by the Soviet Union, which bred them to be
resistant to antibiotics available in the 1970's and 80's.
Kenneth F. Bastow, associate professor of pharmacy at the University of
North Carolina, said Cipro and similar medicines like Tequin and Levaquin
were most likely to be effective against any strain of anthrax. "Of all the
strains of anthrax that are known, and there are lots, resistance to Cipro
has never been documented, while resistance to some of these others has
been," he said.
Health officials say more than 10,000 Americans are taking Cipro now,
including 7,600 in Washington alone, mostly postal workers. The postal
workers are being given 10- day supplies of Cipro, not 5-day supplies,
partly because the pills are commonly shipped in packs of 20.
With the Bayer deal, the nation will have 120 million Cipro pills in
government stockpiles by the end of the year.
Mr. Thompson said this is enough for 12 million Americans, but this is true
only if each person takes the medicine for only five days. If doses were
ever needed for 60 days, or 120 tablets a person, then the stockpile would
be adequate for only a million people.
Dr. Cinti said people should not take Cipro unless prescribed for actual
exposure to anthrax. The powerful medicine is used to treat pneumonia and
blood infections in critically ill patients in hospitals' intensive- care
units, but if too many Americans take it, these ailments will develop
resistance to Cipro, he said.
--------------------------------------------
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by any means necessary,
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- John F. Kennedy (1917-1963).
Speech at White House, 13 Mar. 1962,
in Vital Speeches 1 Apr. 1962, p. 356
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Keep your powder dry and aim for the face,
chances are they're wearing body armour.
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