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AEROSOLIZED PENTAMIDINE, ALPHA INTERFERON WILL BE COVERED by federal funds from the Health Resources Services Administration under AIDS block grants to states, the agency said. HRSA will alert state program offices in early March about the additions, to become effective immediately. Using the agency's general program authority for the block grant, HRSA officials decided to add the two drugs at a Feb. 16 meeting. LyphoMed's aerosolized pentamidine is a new formulation to treat and prevent recurring bouts of Pneumocystis carinii pneumonia in AIDS patients. FDA paved the way for wider distribution of the drug via a Treatment IND earlier this month ("The Pink Sheet" Feb. 13, p. 10). The injectable form, which has full NDA approval, has been widely used in AIDS clinics, where it was being reformulated for aerosol administration. Alpha interferon, marketed by Schering-Plough and Hoffmann-LaRoche, is used to treat Kaposi's sarcoma. HRSA's "AIDS Drug Reimbursement Program" previously covered only one drug, Burroughs Wellcome's Retrovir (AZT). The additions were considered for the past few months while HRSA officials ensured that program policies would meet a stipulation that one-third of funds are used for AZT. The practical effect of the expanded program may be relatively insignificant. Many states have already spent much of the block grant funds on AZT. Although the federal grants must be made by March 31, states are permitted to try to stretch the funds through the entire year. The block grant initially was established to assist patients who had no other financial resources for AIDS drugs, while states were developing their own programs. Because many states were slow to do so, Congress extended the block grants through the first half of fiscal 1989. In an agreement with Congress, Burroughs Wellcome added $5 mil. to a $10 mil. congressional appropriation to extend the program for six months ("The Pink Sheet" Oct. 3 & 10, "In Brief"). Under terms of an agreement outlined in an Oct. 31 letter to HHS Assistant Secretary for Health Robert Windom, the company specified that the one-third it donated must be used to pay the cost of its own product. FDA approved LyphoMed's Treatment IND request for aerosolized pentamidine on Feb. 6. The aerosol form "will be recommended for use in HIV-infected individuals who have had at least one episode of the pneumonia or who have T-4 helper cell counts of 200 per cubic mm or less." The recommended dosage is 300 mg every four weeks. The unapproved use of aerosolized pentamidine has become so prevalent that at least one health insurance company, John Hancock, announced that it would pay for the treatment even though the drug's NDA is not approved. In addition, the Blue Cross and Blue Shield Association has indicated that plans in Massachusetts, California, New Hampshire, and Rhode Island have decided to cover the aerosolized formulation. The number could be higher, because no formal surveys have been taken, the association said. On the other hand, another large insurer, Prudential, has indicated it will adhere to its policy of only covering drugs that have been approved by FDA. LyphoMed estimates treatment costs at $99.45 per dose, or almost $1,200 annually. "When the total costs of nebulizers and labor are added, the total cost of prophylaxis for a one-year period documented in a study at San Francisco General Hospital is $2,100," the company said in a February press release. The Treatment IND price is equal to the per-dose price of the I.V. product being paid by AIDS clinics for aerosol use, the company said. LyphoMed reportedly has agreed with FDA not to raise the price. Following the lead of other companies marketing high-priced AIDS drugs, LyphoMed said it is "currently developing a program for providing aerosolized pentamidine to indigent patients through locally based AIDS clinics and community organizations." When alpha interferon was approved late last year, Schering-Plough and Roche both announced such programs for indigent patients requiring the drug ("The Pink Sheet" Nov. 28, p. 7).

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