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Original Research |

Economic Savings Versus Health Losses: The Cost-Effectiveness of Generic Antiretroviral Therapy in the United States FREE

Rochelle P. Walensky, MD, MPH; Paul E. Sax, MD; Yoriko M. Nakamura, BA; Milton C. Weinstein, PhD; Pamela P. Pei, PhD; Kenneth A. Freedberg, MD, MSc; A. David Paltiel, PhD; and Bruce R. Schackman, PhD
[+] Article and Author Information

From Massachusetts General Hospital, Brigham and Women's Hospital, Harvard Medical School, and Harvard School of Public Health, Boston, Massachusetts; Yale School of Medicine, New Haven, Connecticut; and Weill Cornell Medical College, New York, New York.

Note: This study was exempt from the Institutional Review Board by the Partners Human Research Committee Protocol 200P001927.

Acknowledgment: The authors thank Kelly Gebo, MD, MPH, and the HIV Research Network for supplying helpful data.

Grant Support: By grants R37-AI42006 and R01-AI093269 from the National Institute of Allergy and Infectious Diseases.

Potential Conflicts of Interest: Disclosures can be viewed at www.acponline.org/authors/icmje/ConflictOfInterestForms.do?msNum=M12-1790.

Reproducible Research Statement: Study protocol, statistical code, and data set: Details are available in the Appendix, on the CEPAC Web site (http://web2.research.partners.org/cepac/mainpage.html), and from Dr. Walensky (address below).

Requests for Single Reprints: Rochelle P. Walensky, MD, MPH, Division of Infectious Disease, Medical Practice Evaluation Center, Massachusetts General Hospital, 50 Staniford Street, 9th Floor, Boston, MA 02114.

Current Author Addresses: Drs. Walensky, Pei, and Freedberg and Ms. Nakamura: Medical Practice Evaluation Center, Massachusetts General Hospital, 50 Staniford Street, 9th Floor, Boston, MA 02114.

Dr. Sax: Brigham and Women's Hospital, Infectious Disease, 75 Francis Street, Boston, MA 02115.

Dr. Weinstein: Harvard School of Public Health, 718 Huntington Avenue, Boston, MA 02115.

Dr. Paltiel: Yale School of Public Health, PO Box 208034, 60 College Street, New Haven, CT 06520.

Dr. Schackman: Department of Public Health, Weill Cornell Medical College, 411 East 69th Street, New York, NY 10021.

Author Contributions: Conception and design: R.P. Walensky, P.E. Sax, M.C. Weinstein, K.A. Freedberg, A.D. Paltiel.

Analysis and interpretation of the data: R.P. Walensky, P.E. Sax, Y.M. Nakamura, M.C. Weinstein, P.P. Pei, K.A. Freedberg, A.D. Paltiel, B.R. Schackman.

Drafting of the article: R.P. Walensky, P.E. Sax, Y.M. Nakamura, M.C. Weinstein, P.P. Pei, A.D. Paltiel.

Critical revision of the article for important intellectual content: R.P. Walensky, P.E. Sax, M.C. Weinstein, P.P. Pei, K.A. Freedberg, A.D. Paltiel, B.R. Schackman.

Final approval of the article: R.P. Walensky, P.E. Sax, M.C. Weinstein, P.P. Pei, K.A. Freedberg, A.D. Paltiel, B.R. Schackman.

Provision of study materials or patients: R.P. Walensky.

Statistical expertise: R.P. Walensky, M.C. Weinstein, P.P. Pei.

Obtaining of funding: R.P. Walensky, K.A. Freedberg.

Administrative, technical, or logistic support: R.P. Walensky, Y.M. Nakamura, P.P. Pei, K.A. Freedberg.

Collection and assembly of data: R.P. Walensky, P.E. Sax, Y.M. Nakamura, B.R. Schackman.


Ann Intern Med. 2013;158(2):84-92. doi:10.7326/0003-4819-158-2-201301150-00002
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Chinese translation

Background: U.S. HIV treatment guidelines recommend branded once-daily, 1-pill efavirenz–emtricitabine–tenofovir as first-line antiretroviral therapy (ART). With the anticipated approval of generic efavirenz in the United States, a once-daily, 3-pill alternative (generic efavirenz, generic lamivudine, and tenofovir) will decrease cost but may reduce adherence and virologic suppression.

Objective: To assess the clinical effect, costs, and cost-effectiveness of a 3-pill, generic-based regimen compared with a branded, coformulated regimen and to project the potential national savings in the first year of a switch to generic-based ART.

Design: Mathematical simulation of HIV disease.

Setting: United States.

Patients: HIV-infected persons.

Intervention: No ART (for comparison); 3-pill, generic-based ART; and branded ART.

Measurements: Quality-adjusted life expectancy, costs, and incremental cost-effectiveness ratios (ICERs) in dollars per quality-adjusted life-year (QALY).

Results: Compared with no ART, generic-based ART has an ICER of $21 100/QALY. Compared with generic-based ART, branded ART increases lifetime costs by $42 500 and per-person survival gains by 0.37 QALYs for an ICER of $114 800/QALY. Estimated first-year savings, if all eligible U.S. patients start or switch to generic-based ART, are $920 million. Most plausible assumptions about generic-based ART efficacy and costs lead to branded ART ICERs greater than $100 000/QALY.

Limitation: The efficacy and price reduction associated with generic drugs are unknown, and estimates are intended to be conservative.

Conclusion: Compared with a slightly less effective generic-based regimen, the cost-effectiveness of first-line branded ART exceeds $100 000/QALY. Generic-based ART in the United States could yield substantial budgetary savings to HIV programs.

Primary Funding Source: National Institute of Allergy and Infectious Diseases.

Context

  • In the United States, provision of HIV treatment relies heavily on government funding. A recommended option for first-line treatment of HIV infection is the daily administration of a single pill containing 3 branded drugs.

Contribution

  • In a mathematical simulation, daily administration of 3 pills (2 of which are generic drugs and 1 of which is a branded drug) taken simultaneously dramatically reduced cost and only slightly reduced survival gain compared with the use of a fully branded regimen.

Caution

  • Simulation models may not reflect real-world results.

Implication

  • The use of first-line, generic-based HIV treatment in the United States could save nearly $1 billion a year.

—The Editors


A convenient, frequently prescribed, and currently recommended first-line antiretroviral therapy (ART) regimen is branded tenofovir–emtricitabine–efavirenz, which is coformulated as a single once-daily pill (1). For the first time since the initial U.S. Food and Drug Administration (FDA) approval of combination ART in 1996, there is the potential for a potent and largely generic first-line ART regimen. In January 2012, generic versions of lamivudine became available in the United States (2), and generic versions of efavirenz are expected soon (3). A once-daily, 3-pill regimen of generic efavirenz, generic lamivudine, and branded tenofovir could substantially reduce the costs of first-line ART.

However, even if the suppressive efficacy, tolerability, and safety of generic lamivudine and efavirenz meet the required FDA standards of their proprietary equivalents, at least 2 potential disadvantages remain (Appendix Table 1). First, the increased pill burden—3 pills versus 1 pill daily—could hinder adherence and reduce viral suppression, thus leading to worse outcomes (45). Second, although lamivudine is generally considered to be a safe alternative to emtricitabine, lamivudine has been associated with slightly inferior antiretroviral efficacy and an increased frequency of drug resistance on treatment failure in laboratory and clinical studies (69). Given these tradeoffs, we sought to assess the clinical effect, cost, and cost-effectiveness of generic-based ART compared with branded coformulated alternatives.

Table Jump PlaceholderAppendix Table 1. 

Tradeoffs Between Generic-Based and Branded ART

Analytic Overview

We evaluated 3 strategies for HIV-infected persons eligible to initiate an efavirenz-based regimen: no ART (for comparison); 3-pill, generic-based ART consisting of efavirenz (generic), lamivudine (generic), and tenofovir (Viread; Gilead Sciences, Foster City, California); or branded ART, consisting of the 1-pill efavirenz–emtricitabine–tenofovir formulation (Atripla; Gilead Sciences and Bristol-Myers Squibb, Newark, New Jersey). For ease of identification, we refer to the “generic-based ART strategy” even though it contains 1 branded component. In the base case, generic-based ART differs from branded ART in 3 ways. First, viral suppression efficacy in first-line therapy is presumed to be lower because of increased pill burden (poorer adherence) and decreased potency (substitution of lamivudine for emtricitabine). Second, viral suppression efficacy in second-line therapy is presumed to be lower because of reported increased frequency of M184V mutations associated with failure of first-line viral suppression from lamivudine versus emtricitabine. Finally, first-line drug costs are lower. We varied all of these parameters in sensitivity analyses.

We used the Cost-Effectiveness of Preventing AIDS Complications (CEPAC)–US Model, a previously published mathematical simulation of HIV (1014), to project clinical outcomes (quality-adjusted life-years [QALYs]) and economic outcomes (per-person lifetime costs) for the 3 strategies. These projections were then used to evaluate incremental cost-effectiveness ratios (ICERs), which we report from a U.S. health system perspective, discounted at 3% per year (15). We also projected the undiscounted savings in the first year among all patients who are receiving or starting an efavirenz-based treatment and are eligible to switch from branded to generic-based ART.

The CEPAC-US Model

The CEPAC-US Model characterizes HIV disease progression as a sequence of monthly transitions between “health states.” These states comprise current status, relevant history, quality of life, and resource use and determine the risk for future clinical events. Health states are stratified by CD4 cell count (5 strata), HIV RNA level (6 strata), ART regimen, and disease acuity (for example, treatment-related toxicity or opportunistic infection). In the model, the level of HIV RNA determines the rate of the decrease in CD4 cell count, and the CD4 cell count determines the frequency of opportunistic infections and AIDS-related deaths. Patients face a risk for HIV-related mortality (opportunistic infections and otherwise) or age- and sex-adjusted background mortality (16).

We capitalized on the model's capacity to consider early-regimen mutations and virologic failure in determining the efficacy of subsequent regimens. Per current U.S. guidelines (1), we assumed that all newly presenting patients initiate therapy immediately. Effective ART functions to suppress HIV RNA and increase CD4 cell count at rates reported (Table 1 and Appendix Table 2) (2027). Quarterly clinic visits and monitoring of CD4 cell count and HIV RNA confirm the possibility of “early suppression” followed by “late failure,” 2 model-based parameters that define ART efficacy (Appendix Figure 1). Early suppression of a regimen is the fraction of patients virologically suppressed after 24 weeks. Patients with suppression subsequently have a probability of late failure, defined as a monthly probability of virologic rebound after initial suppression. Once detected, virologic failure results in a switch to a subsequent regimen and another—albeit diminishing—opportunity for suppression. The model translates input variation in adherence and regimen selection into changes in ART efficacy and thereby into changes in clinical and cost outcomes.

Table Jump PlaceholderTable 1. 

Base-Case Inputs for Model of Generic-Based Versus Branded ART in the United States

Table Jump PlaceholderAppendix Table 2. 

Base-Case ART Efficacy Inputs and Costs for Later ART Regimens in Analysis of First-Line Generic-Based Versus Branded ART in the United States

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Appendix Figure 1.

Simplified schema of modeled patients as they progress through first-line ART (branded or generic-based) in the CEPAC Model.

Squares indicate decision nodes, and circles indicate chance nodes. ART = antiretroviral therapy; CEPAC = Cost-Effectiveness of Preventing AIDS Complications.

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Input Parameters

Further details on the protocols we used for model validation and to assemble appropriate literature-derived estimates are available in the Appendix and elsewhere (14).

Cohort

The entering cohort was modeled similarly to newly diagnosed HIV-infected patients in the United States in 2009 (28), among whom 84% were male. Recent U.S. data suggest a mean CD4 count at presentation of 0.317 × 109 cells/L (Table 1) (17, 28).

ART Efficacy

In the no-ART strategy, patients follow the natural progression of HIV disease without access to ART. A clinical trial using coformulated 1-pill tenofovir–emtricitabine–efavirenz found that branded ART results in 24-week virologic suppression of 85%, with a 0.21% monthly probability of late failure after 24 weeks (20). For this strategy, we used a second-line, protease inhibitor–based regimen with a 24-week suppression efficacy of 73% (2122). A clinical trial of efavirenz, lamivudine, and tenofovir found that 3-pill, generic-based ART leads to 24-week virologic suppression of 78% (24). Using trial data, we derived the monthly probability of failure after 24 weeks as 0.45%, which is substantially higher than that of branded ART. To capture the laboratory-described increased risk for M184V mutations resulting from first-line lamivudine, we also decreased the suppression rate of second-line ART by 5%, from 73% with branded ART to 68% with generic-based ART (67). Because there are currently no data suggesting that efavirenz-based toxicity will differ between the brand-name and generic drugs, we attribute this difference to first-line lamivudine use only. Efficacies and costs for subsequent ART regimens (provided in Appendix Table 2) are otherwise identical between treatment strategies.

An intermediate alternative to 3-pill, generic-based ART is a 2-pill formulation that uses coformulated tenofovir–emtricitabine (Truvada; Gilead Sciences) and generic efavirenz. Recognizing the uncertainty surrounding the comparative efficacy of once-daily regimens consisting of 1, 2, or 3 pills, we examined all options together in generalized sensitivity analyses designed to illuminate the tradeoffs among early efficacy, late failure, and costs. We began with a 24-week suppressive efficacy of 84% and a monthly probability of failure thereafter of 0.43% with 2-pill, generic-based ART (23); we maintained the full potency of the second-line regimen because of the inclusion of emtricitabine in the first-line regimen (Table 1). Other efficacy and cost combinations were also examined.

Costs

The annual cost for branded ART is $15 300 (19), 77% of the published average wholesale price (AWP) for standard dosing (Table 1) (29). We assumed a 75% price reduction from AWP (including discounts) for the generic components of the 3-pill, generic-based ART regimen ($9200/year) and the 2-pill, generic-based ART regimen ($11 600/year) and explored reductions from 35% to 95%. Subsequent ART regimen, laboratory monitoring, and costs of routine care are shown in Appendix Table 2. All costs are in 2009 U.S. dollars.

Sensitivity Analyses

We used 1-way and multiway sensitivity analyses to understand the effect of uncertainty in efficacies of early virologic suppression, probabilities of late failure, and the comparative cost savings from generic-based ART. We also examined alternative second-line ART efficacies associated with an increased presence of M184V mutations and considered cohorts with higher or lower CD4 cell counts leading to varying durations of ART. Finally, we examined the effect on our results from risk-group adjustments to our estimates of non–HIV-related mortality.

Potential Savings in the First Year

To determine the potential savings in the United States during the first year, we multiplied the number of persons eligible to start or switch to generic-based ART by the per-person savings. “Incident cases” likely to be prescribed efavirenz were calculated as the product of the anticipated new diagnoses in the United States per year (8294 in 2009) (28), the estimated fraction of HIV-infected persons receiving ART (36%) (30), and the likelihood that an efavirenz-based regimen is selected as first-line therapy (85%) (31). “Prevalent cases” who switched from an efavirenz-based branded regimen to the generic-based alternative were calculated as the product of Centers for Disease Control and Prevention–based projections of the number of persons living with HIV in the United States (1 200 000) (28), the estimated proportion receiving ART (36%) (30), and the estimated proportion receiving an efavirenz-based ART regimen (34%) (Gebo K. Personal communication.) (30). We multiplied the number of persons eligible for a generic start or switch by the potential per-person savings associated with generic-based ART in the first year. These savings are the difference between the undiscounted annual costs of branded ($15 300) and generic ($9200) ART ($6100 per person).

Role of the Funding Source

The National Institute of Allergy and Infectious Diseases supported the study. The funding source did not have any role in the design, conduct, or reporting of the study or in the decision to submit the manuscript for publication.

Base-Case Results

In the base case, the discounted per-person quality-adjusted life expectancies from age 43 years were 4.05 QALYs (undiscounted, 4.58 QALYs) for no ART; 12.08 QALYs (undiscounted, 18.36 QALYs) for 3-pill, generic-based ART; and 12.45 QALYs (undiscounted, 19.32 QALYs) for branded ART (Table 2). Mean duration of receipt of the first-line regimen decreased from 12.1 years for branded ART to 10.0 years for 3-pill, generic-based ART (both undiscounted). Per-person discounted lifetime costs increased from $131 200 (no ART) to $300 300 for generic-based ART and $342 800 for branded ART. Compared with no ART, 3-pill, generic-based ART resulted in an ICER of $21 100/QALY. The ICER for branded ART, compared with generic-based ART, was $114 800/QALY (Table 2 and Figure 1).

Table Jump PlaceholderTable 2. 

Clinical Outcomes, Cost, and Cost-Effectiveness of Generic-Based Versus Branded ART in the United States

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Figure 1.

Clinical and economic outcomes of branded and 3-pill, generic-based ART.

Per-person lifetime costs are on the x-axis, and life expectancy in QALYs is on the y-axis. The dotted-and-dashed line indicates the anticipated incremental cost-effectiveness ratio of branded ART compared with no ART in the absence of a generic alternative. ART = antiretroviral therapy; QALY = quality-adjusted life-year.

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Two-Pill, Generic-Based ART

Two-pill, generic-based ART resulted in greater survival than 3-pill, generic-based ART in the base case (12.25 vs. 12.08 QALYs). When 3- and 2-pill, generic-based ART and branded ART were compared incrementally, ICERs were $21 100/QALY for 3-pill, generic-based ART versus no ART; $95 400/QALY for 2-pill, generic-based ART versus 3-pill, generic-based ART; and $130 600/QALY for branded versus 2-pill, generic-based ART (Table 2 and Appendix Figure 2).

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Appendix Figure 2.

Clinical and economic outcomes of branded compared with 2-pill and 3-pill, generic-based ART.

Per-person lifetime costs are on the x-axis, and life expectancy QALYs in on the y-axis. The dotted-and-dashed line indicates the anticipated incremental cost-effectiveness ratio of branded ART compared with no ART in the absence of a generic alternative. ART = antiretroviral therapy; QALY = quality-adjusted life-year.

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Sensitivity Analyses
Three-Pill, Generic-Based ART

The ICER for branded ART compared with 3-pill, generic-based ART was sensitive to the comparative cost and efficacy of generic-based ART (Figure 2). At the base-case efficacy of generic-based ART (24-week suppression, 78%; probability of late failure, 0.45%/month), branded ART had an ICER greater than $100 000/QALY, provided that the discount from AWP for generic-based ART was greater than 69% (Figure 2). If the probability of 24-week suppression remained lower for 3-pill, generic-based ART than for branded ART but the monthly probability of late failure was the same (0.21%), the ICERs of branded compared with 3-pill, generic-based ART were substantially higher at every combination of 24-week efficacy and price reduction for generic-based ART (Appendix Figure 3). Under such conditions, even modest price reductions (>40% AWP) for the generic regimen components resulted in ICERs greater than $100 000/QALY for branded ART compared with generic-based ART (Appendix Figure 3).

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Figure 2.

Two-way sensitivity analyses with base-case rates of late failure.

The graph shows the changes in the ICER of branded ART compared with 3-pill, generic-based ART (y-axis) as a function of the generic drug price reduction (x-axis) and the early efficacy of 3-pill, generic-based ART in HIV RNA suppression. In the base case, branded ART has an ICER greater than $100 000/QALY as long as the generic drug discount from the AWP is greater than 69% (circle). This figure represents results when the monthly probability of late failure (after 24 wk) is 0.45% for both 3-pill, generic-based ART and 0.21% for branded ART. ART = antiretroviral therapy; AWP = average wholesale price; ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year.

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Appendix Figure 3.

Two-way sensitivity analyses with equal rates of late failure for generic-based and branded ART.

The graph shows the changes in the ICER of branded ART compared with 3-pill, generic-based ART (y-axis) as a function of the generic drug price reduction (x-axis) and the early efficacy of 3-pill, generic-based ART in HIV RNA suppression. This figure represents results when the monthly probability of late failure (after 24 wk) is 0.21% for both 3-pill, generic-based ART and branded ART. Even modest price reductions (>40%) for the generic regimen components result in ICERs for branded ART greater than $100 000/QALY (circle). ART = antiretroviral therapy; AWP = average wholesale price; ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year.

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Two-Pill, Generic-Based ART

Results for 2-pill, generic-based ART were similarly sensitive to regimen efficacy—most important, to the probability of late failure—and costs. When 2-pill, generic-based; 3-pill, generic-based; and branded ART all had the same probability of late failure (0.21% at 24 weeks), 2-pill, generic-based ART had an ICER less than $100 000/QALY compared with 3-pill, generic-based ART at price reductions of 50% AWP ($62 600/QALY) (Table 3). If branded and 2-pill, generic-based ART had similar probabilities of late failure (0.21%) (lower than that of 3-pill, generic-based ART [0.45%]), 2-pill, generic-based ART became much more attractive. At all price reductions examined, 2-pill, generic-based ART was the best choice because it dominated (was more effective and less costly than) 3-pill, generic-based ART and because of the very high ICERs for branded ART ($101 300 to $2 540 100/QALY) (Table 3).

Table Jump PlaceholderTable 3. 

Three-Way Sensitivity Analysis of 2-Pill Versus 3-Pill, Generic-Based ART; Probability of Late Failure After 24 Weeks; and Price Reduction

Other Sensitivity Analyses

In other sensitivity analyses, we saw variability in outcomes but no material effect on the qualitative cost-effectiveness findings when we changed the efficacy of second-line ART to capture changes related to potential lamivudine-related resistance (branded ART ICERs, $109 300 to $120 600/QALY), when we considered a healthier presenting cohort (mean CD4 count, 0.650 ×109 cells/L; branded ART ICER, $143 200/QALY), or when we adjusted background mortality rates by risk group (branded ART ICER, $117 400/QALY) (Appendix Tables 3, 4, 5, and 6).

Table Jump PlaceholderAppendix Table 3. 

Sensitivity Analysis of Second-Line ART Efficacy for 3-Pill, Generic-Based ART

Table Jump PlaceholderAppendix Table 4. 

Sensitivity Analysis Showing the Effect on Clinical Outcomes, Cost, and Cost-Effectiveness for Alternative Mean CD4 Cell Counts of Presenting Cohort

Table Jump PlaceholderAppendix Table 5. 

Sensitivity Analysis Showing the Effect on Clinical Outcomes, Cost, and Cost-Effectiveness When Background Mortality Is Adjusted by Risk Group

Table Jump PlaceholderAppendix Table 6. 

Three-Way Sensitivity Analysis of 2-Pill Versus 3-Pill, Generic-Based ART; Probability of Virologic Failure After 24 Weeks; and Price Reduction When Background Mortality Is Adjusted by Risk Group

Potential Savings in the First Year

The per-person undiscounted savings for 3-pill and 2-pill, generic-based ART compared with branded ART were $6100/year and $3700/year. We estimate that there are 2500 persons newly diagnosed and initiating ART (“incident cases”) and 147 300 HIV-infected persons (“prevalent cases”) currently receiving an efavirenz-based regimen who could switch to generic-based ART in the United States (30). Combining the benefits from incident and prevalent cases, the potential estimated savings in the first year associated with the use of 3-pill, generic-based ART in the base case were $920 million; the anticipated savings were substantially less for 2-pill, generic-based ART ($560 million). Anticipated savings in the first year from 3-pill, generic-based ART ranged from $200 million to $1.29 billion at price reductions of 35% to 95% from AWP (Appendix Figure 4).

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Appendix Figure 4.

Potential annual cost savings in the United States with 3-pill or 2-pill, generic-based ART compared with branded ART.

The potential annual savings for 2-pill or 3-pill, generic-based ART are compared with branded ART over a range of generic drug price reductions. The x-axis shows the price reductions, which range from 35% to 95%; the base case of 75% savings is indicated by the arrow. The y-axis shows the amount of money projected to be saved (million 2009 U.S. dollars) over a 1-y horizon. Calculations in this analysis assume that all persons maintain their designated generic or branded ART regimen for the first year and do not switch to a subsequent line of therapy before the end of 12 mo. ART = antiretroviral therapy; AWP = average wholesale price.

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We project that a population-wide switch from first-line branded ART to generic-based ART in the United States will result in lifetime average savings of $42 500 per eligible patient, with a modest loss of survival of only 0.37 QALY. On a population-wide basis, the aggregate savings in the first year alone would amount to nearly $1 billion. When potential decrements in the short- and long-term efficacy of generic-based regimens are accounted for, we find that the incremental cost-effectiveness of a first-line branded regimen becomes unattractive by a standard recently used in the United States (>$100 000/QALY) (3234).

The market for antiretroviral drugs in the United States, largely financed with governmental support, was estimated at nearly $9 billion in 2011 (35). Much is at stake as major components of effective HIV therapy become generically available this year. The importance of this analysis lies not only in its relevance to the current discussion of generic efavirenz but also in the development of a framework by which future generations of generic antiretroviral drugs—and the tradeoff between drug efficacy and cost savings—may be evaluated. Our assessment may be updated on report of head-to-head comparisons of the 2- and 3-pill generic regimens or of other generic regimens, including those using abacavir. These studies would be most helpful if they described the relative efficacy (that is, immediate virologic suppression and durability over time) and resource utilization (for example, hospitalizations and drug costs) associated with these 2 alternatives.

Generic drugs will save money but may reduce health benefits, a tradeoff that may be controversial. Fewer than 0.4% of published cost-effectiveness analyses report on interventions that confer a combination of lower health benefits and lower costs. Some may reject such interventions as substandard and therefore eliminate their consideration on ethical grounds. However, economic evaluation of “decremental cost-effectiveness” can identify opportunities to improve efficiency in health care delivery by reallocating resources to higher-value, life-saving alternatives. This is particularly true as an increasing number of proven effective but costly interventions further stretch the resources of the U.S. health care system. The U.S. 2010 National HIV/AIDS Strategy (36) is explicitly financed by “repurposed” rather than new funds (37). In an era in which dedication to the national HIV mission requires “redirected” financing, the potential $1 billion savings from generic-based regimens might be an efficient source available for national reinvestment (38). For example, fewer than half of the state AIDS Drug Assistance Programs in the United States include protease inhibitor–based hepatitis C virus (HCV) regimens ($90 100 per treatment course) in their formularies, despite these drugs having ICERs less than $100 000/QALY (as reported in monoinfected patients) (3940). For every 15 persons who switch to a generic-based HIV regimen (potential annual savings of approximately $6100/person), 1 person co-infected with HIV and HCV could be treated for and potentially cured of chronic hepatitis C (39). With approximately 300 000 U.S. persons co-infected with HIV and HCV and eligible for these new HCV therapies, this would represent a major treatment opportunity, although it remains unclear whether such saved resources would be reallocated in this direction (4041).

Our assumptions about generic drug efficacy and pricing are conservative. We assumed, on the basis of in vitro clinical trials and observational data, that daily lamivudine would be less effective and would promote more resistance than emtricitabine when used as either a first- or second-line regimen. We also assumed an adherence advantage for a daily single-pill regimen because, with 1 exception, literature on observational studies indicates that there is a relationship between taking fewer pills and better HIV regimen adherence (4, 4244). Taken as a whole, these assumptions suggest that the potential loss of life expectancy for generic-based ART could be as high as 0.37 QALY. To put this value in perspective, this is also the approximate survival benefit associated with intensive hypertension control in patients with type 2 diabetes (45). Our 75% price reduction is justified by evidence that generic prices decrease by as much as 80% to 85% of published branded prices when 5 or more manufacturers enter a market (4647). More than 7 suppliers currently provide FDA-approved generic efavirenz outside the United States under the auspices of the U.S. President's Emergency Plan for AIDS Relief (48).

We note several limitations in this analysis. The $100 000/QALY threshold for cost-effectiveness, although frequently cited, may be debated (33, 4950). Higher willingness-to-pay thresholds could result in branded regimens falling within a range considered acceptable. Although we conducted this analysis from the U.S. health system perspective, we acknowledge that the savings realized from a policy switch to generic-based regimens may be applied differently from one payer to the next (for example, state AIDS Drug Assistance Programs vs. state Medicaid programs or the U.S. Veterans Administration); these savings may not be reinvested in HIV care or even in health care. They may also be greater than we project. If efforts to improve HIV case identification and linkage to and retention in care are successful, this would increase the outlay for HIV medications and the anticipated savings from generic drugs could exceed our $920 million estimate (51).

Compared with a slightly less effective regimen containing generic drugs, we found that the incremental cost-effectiveness for the branded 1-pill, first-line ART regimen exceeds $100 000/QALY. Starting or switching to generic-based regimens would initially yield annual savings approaching $1 billion for programs that fund HIV treatment in the United States.

Appendix: Approach to CEPAC Model Validation

Our approach to evaluating the validity of our models was premised on the view that their purpose is to inform decisions. In that spirit, we adhered, whenever possible, to the widely accepted recommendations of the U.S. Panel on Cost-Effectiveness in Health and Medicine (15) and the following evaluation criteria (52): transparency (whether the assumptions, input parameters, and logic are stated with complete clarity and are left open to peer review), verification (whether the outputs are consistent with observed data and whether the model has been debugged and tested for internal consistency), corroboration (whether other models have produced similar results contingent on similar assumptions and input parameters), face validity (whether the results of the model make sense in relation to theoretical considerations and can be explained in intuitive terms), and accreditation (whether the model has been subjected to peer review by a dispassionate reviewer and found to be true to its claims).

We ascertained internal consistency in several steps. First, we examined the face validity of randomly selected, individual patient “traces.” These detailed views of a patient's month-to-month experience offered both a first check on the reasonableness of our output and a convenient means of debugging. Next, we checked “internal validity” by verifying that the output of the model accurately approximated the data used to derive input parameters. This is an area of growing interest in the field of disease policy modeling and one in which our team has taken a leadership role (5253). A recent illustration uses our work to assess the internal consistency of the Disease Module, reparameterized using data from the WIHS (Women's Interagency HIV Study) (54). Kaplan–Meier survival curves based on data from WIHS were visually compared with preliminary, model-estimated survival (Appendix Figure 5). When WIHS data were used, model-projected survival over 36 months in women with CD4 counts less than 0.050 × 109 cells/L and greater than 0.350 × 109 cells/L closely approximated empirical survival data. Model-projected survival in women with CD4 counts of 0.050 to 0.199 × 109 cells/L and 0.200 to 0.349 × 109 cells/L substantially underestimated survival between 12 and 36 months. A series of 1-way sensitivity analyses showed that the best visual fit to the WIHS empirical survival data required updating the model to assume a 50% reduction in either the incidence of opportunistic infections or rates of chronic AIDS deaths in patients with a prior opportunistic infection.

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Appendix Figure 5.

Comparison of CEPAC Model outcomes and data reported from WIHS.

Kaplan–Meier survival curves based on data from WIHS were compared with preliminary, model-estimated survival over 36 mo in women with CD4 counts <0.050 × 109 cells/L and >0.350 × 109 cells/L. Lines with symbols represent model-based projections, whereas those without symbols represent WIHS data. CEPAC = Cost-Effectiveness of Preventing AIDS Complications; WIHS = Women's Interagency HIV Study.

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With regard to predictive validity, the Panel on Cost-Effectiveness in Health and Medicine has noted that, when models are used for purposes of informing decisions, tests of predictive validity are valuable but may not always be possible and should not be considered essential. We have used the CEPAC Model to simulate both natural history and the effect of ART on the incidence of AIDS-related opportunistic infections in the Swiss HIV Cohort Study (55). We have found that the CEPAC Model output very closely mirrors the Swiss Cohort data for most opportunistic infections.

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Figures

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Appendix Figure 1.

Simplified schema of modeled patients as they progress through first-line ART (branded or generic-based) in the CEPAC Model.

Squares indicate decision nodes, and circles indicate chance nodes. ART = antiretroviral therapy; CEPAC = Cost-Effectiveness of Preventing AIDS Complications.

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Figure 1.

Clinical and economic outcomes of branded and 3-pill, generic-based ART.

Per-person lifetime costs are on the x-axis, and life expectancy in QALYs is on the y-axis. The dotted-and-dashed line indicates the anticipated incremental cost-effectiveness ratio of branded ART compared with no ART in the absence of a generic alternative. ART = antiretroviral therapy; QALY = quality-adjusted life-year.

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Appendix Figure 2.

Clinical and economic outcomes of branded compared with 2-pill and 3-pill, generic-based ART.

Per-person lifetime costs are on the x-axis, and life expectancy QALYs in on the y-axis. The dotted-and-dashed line indicates the anticipated incremental cost-effectiveness ratio of branded ART compared with no ART in the absence of a generic alternative. ART = antiretroviral therapy; QALY = quality-adjusted life-year.

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Figure 2.

Two-way sensitivity analyses with base-case rates of late failure.

The graph shows the changes in the ICER of branded ART compared with 3-pill, generic-based ART (y-axis) as a function of the generic drug price reduction (x-axis) and the early efficacy of 3-pill, generic-based ART in HIV RNA suppression. In the base case, branded ART has an ICER greater than $100 000/QALY as long as the generic drug discount from the AWP is greater than 69% (circle). This figure represents results when the monthly probability of late failure (after 24 wk) is 0.45% for both 3-pill, generic-based ART and 0.21% for branded ART. ART = antiretroviral therapy; AWP = average wholesale price; ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year.

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Appendix Figure 3.

Two-way sensitivity analyses with equal rates of late failure for generic-based and branded ART.

The graph shows the changes in the ICER of branded ART compared with 3-pill, generic-based ART (y-axis) as a function of the generic drug price reduction (x-axis) and the early efficacy of 3-pill, generic-based ART in HIV RNA suppression. This figure represents results when the monthly probability of late failure (after 24 wk) is 0.21% for both 3-pill, generic-based ART and branded ART. Even modest price reductions (>40%) for the generic regimen components result in ICERs for branded ART greater than $100 000/QALY (circle). ART = antiretroviral therapy; AWP = average wholesale price; ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year.

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Appendix Figure 4.

Potential annual cost savings in the United States with 3-pill or 2-pill, generic-based ART compared with branded ART.

The potential annual savings for 2-pill or 3-pill, generic-based ART are compared with branded ART over a range of generic drug price reductions. The x-axis shows the price reductions, which range from 35% to 95%; the base case of 75% savings is indicated by the arrow. The y-axis shows the amount of money projected to be saved (million 2009 U.S. dollars) over a 1-y horizon. Calculations in this analysis assume that all persons maintain their designated generic or branded ART regimen for the first year and do not switch to a subsequent line of therapy before the end of 12 mo. ART = antiretroviral therapy; AWP = average wholesale price.

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Appendix Figure 5.

Comparison of CEPAC Model outcomes and data reported from WIHS.

Kaplan–Meier survival curves based on data from WIHS were compared with preliminary, model-estimated survival over 36 mo in women with CD4 counts <0.050 × 109 cells/L and >0.350 × 109 cells/L. Lines with symbols represent model-based projections, whereas those without symbols represent WIHS data. CEPAC = Cost-Effectiveness of Preventing AIDS Complications; WIHS = Women's Interagency HIV Study.

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Tables

Table Jump PlaceholderAppendix Table 1. 

Tradeoffs Between Generic-Based and Branded ART

Table Jump PlaceholderTable 1. 

Base-Case Inputs for Model of Generic-Based Versus Branded ART in the United States

Table Jump PlaceholderAppendix Table 2. 

Base-Case ART Efficacy Inputs and Costs for Later ART Regimens in Analysis of First-Line Generic-Based Versus Branded ART in the United States

Table Jump PlaceholderTable 2. 

Clinical Outcomes, Cost, and Cost-Effectiveness of Generic-Based Versus Branded ART in the United States

Table Jump PlaceholderTable 3. 

Three-Way Sensitivity Analysis of 2-Pill Versus 3-Pill, Generic-Based ART; Probability of Late Failure After 24 Weeks; and Price Reduction

Table Jump PlaceholderAppendix Table 3. 

Sensitivity Analysis of Second-Line ART Efficacy for 3-Pill, Generic-Based ART

Table Jump PlaceholderAppendix Table 4. 

Sensitivity Analysis Showing the Effect on Clinical Outcomes, Cost, and Cost-Effectiveness for Alternative Mean CD4 Cell Counts of Presenting Cohort

Table Jump PlaceholderAppendix Table 5. 

Sensitivity Analysis Showing the Effect on Clinical Outcomes, Cost, and Cost-Effectiveness When Background Mortality Is Adjusted by Risk Group

Table Jump PlaceholderAppendix Table 6. 

Three-Way Sensitivity Analysis of 2-Pill Versus 3-Pill, Generic-Based ART; Probability of Virologic Failure After 24 Weeks; and Price Reduction When Background Mortality Is Adjusted by Risk Group

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CrossRef
 
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CrossRef
 
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PubMed
CrossRef
 
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PubMed
CrossRef
 
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PubMed
CrossRef
 
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CrossRef
 
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PubMed
CrossRef
 
Paltiel AD, Freedberg KA, Scott CA, Schackman BR, Losina E, Wang B, et al. HIV preexposure prophylaxis in the United States: impact on lifetime infection risk, clinical outcomes, and cost-effectiveness. Clin Infect Dis. 2009; 48:806-15.
PubMed
CrossRef
 
Walensky RP, Paltiel AD, Losina E, Morris BL, Scott CA, Rhode ER, et al, CEPAC Investigators. Test and treat DC: forecasting the impact of a comprehensive HIV strategy in Washington DC. Clin Infect Dis. 2010; 51:392-400.
PubMed
 
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Letters

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Generic antiretroviral therapy is safe and effective
Posted on January 18, 2013
Gottfried Hirnschall (1), Cornelis de Joncheere (2)
(1) Director, HIV/AIDS Department, World Health Organization, Geneva, Switzerland (2) Director, Department of Essential Medicines and Health Products, World Health Organization, Geneva, Switzerland
Conflict of Interest: None Declared

Rochelle Walensky and colleagues provide important estimates of the potential cost savings associated with the introduction of generic-based antiretroviral therapy (ART) in the United States [1]. Using conservative assumptions, they estimate first-year savings of up to US$ 920 million and lifetime average savings of US$ 42,500 per eligible patient. However, the authors of the study caution that this may require a tradeoff between drug efficacy and cost savings, as the regimens proposed in the model are not available fixed-dose combinations and may have inferior efficacy and could lead to poor adherence.

We would like to highlight three points related to this analysis.First, the assumption of inferior efficacy is based on the suggesting that lamivudine (3TC) has poorer efficacy than emtricitabine (FTC). This assumption is in contrast to a recent systematic review that found no evidence of any difference between the two drugs in terms of efficacy and safety [2]. Second, the assumption of poorer adherence is based on the fact that generic formulations are not available as fixed-dose combinations. This may be the case in the United States, but quality-assured generic fixed-dose combinations of tenofovir, emtricitabine and efavirenz (TDF+FTC+EFV) do exist and are used in other parts of the world. [3].Third, each of the scenarios includes the originator TDF product because TDF is patented in the US, and the estimated cost of this regimen is US$ 9,200 per patient/year. However, a fixed-dose combination of TDF+FTC+EFV including generic TDF is currently available internationally and costs less than US$ 200 per patient/year [3].Taken together, these points suggest that potential cost savings in the United States of using generic regimens could be even greater than concluded by this analysis, with no negative consequences in terms of efficacy or adherence. It is important to also highlight that in this analysis, presumed differences between generic and originator regimens are associated with the use of different drugs (3TC versus FTC), and formulations (separate tablets rather than fixed-dose combinations), and not the use of generic drugs per se:

Walensky et al rightly consider quality-assured generic and originator drugs to be equivalent in terms of safety and efficacy. Despite ongoing doubts and controversies about the use of generic antiretrovirals over the last decade [4], comparative studies have found no differences in safety or efficacy between originator and quality-assured generic antiretrovirals [5]. Ensuring access to affordable antiretroviral therapy has been an essential precondition of the global scale up of antiretroviral therapy, and both generic and originator companies have an important role to play in ensuring that current and future antiretroviral regimens are accessible and affordable for all who need them.

The study by Walensky et al opens an important discussion about the extent to which patients in the United States are able to access more affordable, fixed-dose antiretroviral regimens that are already available in many other countries. Unfortunately, the findings of the modeling study are being portrayed as indicative of the need to make an ethical trade-off between cost savings and efficacy [6]. Such an interpretation is misleading and is not supported by the extensive global evidence of the efficacy of quality-assured generic ART.

References

1.Walensky RP, Sax PE, Nakamura YM, Weinstein MC, Pei PP, Freedberg KA, Paltiel AD, Schackman BR. Economic savings versus health losses: the cost-effectiveness of generic antiretroviral therapy in the United States. Ann Intern Med. 2013 Jan 15;158(2):84-92. doi: 10.7326/0003-4819-158-2-201301150-00002.

2. Pharmacological equivalence and clinical interchangeability of lamivudine and emtricitabine: a review of current literature: Technical update on treatment optimization. World Health Organization, Geneva, July 2012.

3. Untangling the web of antiretroviral price reductions. Medecins Sans Frontieres, Geneva, July 2012. Accessed http://utw.msfaccess.org/

 4. Ford N, 't Hoen E. Generic medicines are not substandard medicines. Lancet. 2002 Apr 13;359(9314):1351;

5. Stringer J, Mwango A, Giganti M et al. Effectiveness of generic and proprietary first-line antiretroviral regimens in a primary health care setting in Lusaka, Zambia: a cohort study. Int J Epidemiol 2012;41:448–59.

6. Study questions generic HIV drug use. BBC, 16 January 2013. Available : http://www.bbc.co.uk/news/health-21012160

In Response
Posted on February 26, 2013
Rochelle P. Walensky, MD, MPH, A.David Paltiel, PhD, and Bruce R. Schackman, PhD
Massachusetts General Hospital
Conflict of Interest: None Declared

We thank Drs. Hirnschall and de Joncheere for their letter. They provide important new information and useful global context, both of which strengthen the case in support of the once-daily, 3-pill formulation of generic efavirenz, generic lamivudine, and tenofovir that will soon be available in the United States (1).

The World Health Organization (WHO) review – a report that was motivated by in vitro studies suggesting pharmacologic differences between emtricitabine and lamivudine that we noted (2) – finds clinical equivalence between the two drugs. Because this result was not available at the time that we conducted our analysis, we adopted a conservative approach, assigning the branded formulation a small efficacy advantage. Despite our deliberate bias against it, the generic regimen containing lamivudine emerged as the strongly preferred approach. Adopting the equivalence findings demonstrated in the WHO review, which we considered in sensitivity analyses, would make an already-strong argument in favor of generics even stronger.

Drs. Hirnschall and de Joncheere also remark that using the fixed-dose combinations of generic ART available globally may eliminate the adherence disadvantage that we ascribed to multi-pill formulations.  We agree.  However, our objective in this paper was to limit the scope to options that will soon be available in the American market under US patent law: namely, a once-daily, three-pill, formulation with generic efavirenz, generic lamivudine, and tenofovir or a once-daily, two-pill formulation with generic efavirenz and the fixed-dose combination emtricitabine/tenofovir.  Policy makers in the US will imminently face the question of how to evaluate these options. We demonstrate that these generic regimens are strongly preferred, from a cost-effectiveness perspective, even in the absence of single-pill fixed-dose generic drugs available elsewhere in the world.

The introduction of quality-assured generic antiretrovirals has saved the lives of millions of people around the world. Our analysis does not challenge the critical impact and tremendous value of that endeavor. Indeed, we find that the case in support of generics is overwhelming, from both a clinical and an economic point of view.

 

1.Walensky RP, Sax PE, Nakamura YM, Weinstein MC, Pei PP, Freedberg KA, Paltiel AD, Schackman BR. Economic savings versus health losses: the cost-effectiveness of generic antiretroviral therapy in the United States. Ann Intern Med. 2013 Jan 15;158(2):84-92. doi: 10.7326/0003-4819-158-2-201301150-00002.

2. Pharmacological equivalence and clinical interchangeability of lamivudine and emtricitabine: a review of current literature: Technical update on treatment optimization. World Health Organization, Geneva, July 2012.

 

 

The Impact of Generic Antiretroviral Medications on ADAP
Posted on February 27, 2013
Jennifer Y. Lee, MD, Timothy P. Flanigan, MD
Brown University
Conflict of Interest: None Declared

In “Economic Savings Versus Health Losses: The Cost-Effectiveness of Generic Antiretroviral Therapy in the United States,” Walensky and colleagues predict that switching from branded once-daily 1-pill efavirenz-emtricitabine-tenofovir to a once-daily 3-pill generic based alternative of generic efavirenz, generic lamivudine, and branded tenofovir in the United States will decrease costs by $920 million in the first year alone. Given the current financial strain placed upon the US health care system, particularly with respect to the financing of costly branded antiretroviral medications by struggling programs such as the AIDS Drug Assistance Program (ADAP), these significant cost-savings make generic HIV antiretroviral therapy an attractive prospect.

As the highest-expenditure portion of Part B of the greater Ryan White program, ADAP required a total budget of $1,885,764,620 in FY 2011, representing a 5% budget increase from the previous year. ADAP supplies life-sustaining antiretroviral medications to patients who face otherwise insurmountable barriers to treatment. In 2010, ADAP provided medications to 226,419 people, a number that has steadily increased over the years. Many ADAP clients are the most in-need patients from traditionally marginalized groups, with many considered minorities and 44% falling under the federal poverty line [1]. Even with ADAP, however, access to necessary medications may be denied to patients, as ADAP funds are strained, limiting the number of patients receiving medication. Waiting lists, limiting available drugs, and raising the eligibility criteria have all been methods used unfortunately to restrict access to medications [2].

The prospective $920 million first-year cost savings resulting from a switch to a generic-based 3-pill antiretroviral therapy, framed in the context of ADAP, then becomes even more attractive and significant. In FY2011, ADAP total drug expenditures came to $135,138,130. Taking the month of June 2011 as representative, 91.7% of total drug expenditures can be attributed to antiretrovirals [1]. If, keeping with Walensky et al.’s assumption that generic pricing would result in a 75% price reduction from the average wholesale price, meaning that a 3-pill generic-based ART regiment would cost $9200/year, instead of the current $15300/year for branded ART (which is 77% of the published AWP for standard dosing), a cost savings of $49,406,676 on antiretroviral medication expenditures could have been achieved by ADAP in 2011.

 

Cost savings from the switch to generic antiretroviral therapy would be crucial for cash-strapped HIV care programs like ADAP, hopefully allowing them to ultimately provide necessary medications to many more patients in need.

1. Kaiser Family Foundation [Internet]. Menlo Park, CA: Kaiser Family Foundation [cited 2013 February 23]. HIV/AIDS; [about 4 screens]. Available from: http://www.statehealthfacts.org/comparecat.jsp?cat=11&rgn=6&rgn=1

2. HIV/AIDS Bureau, Health Resources and Services Administration [Internet]. Rockville, MD: U.S. Department of Health and Human Resources [cited 2013 February 23]. A Living History: The Ryan White HIV/AIDS Program: Part B. Available from: http://hab.hrsa.gov/livinghistory/programs/Program_Part_B_Essay.pdf


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