The Department of Health and Human Services demanded yesterday that the pharmaceutical company that makes the anthrax-fighting medicine Cipro drop the price on supplies being stockpiled by the federal government for emergencies.
"I met today with Bayer [Corp.] and we worked to lower the price that company will offer to the government for Cipro," Health and Human Services Secretary Tommy G. Thompson said in a telephone news conference. "Hopefully we will have good news to report soon."
The pharmaceutical company had said last week that it planned to offer the medicine at its usual government price of $1.83 per pill. Yesterday, Thompson said that was unacceptable.
"That's what they started at and I can assure you they are off by a long way," he said. "This afternoon I have given them my final offer and they are in consultation and in shock. We are making progress -- that's the best I can tell you."
Appearing later on CNN's "Larry King Live," Thompson said he had demanded that Bayer charge less than $1 per pill "or else we're going to go to Congress and ask for some support to go in and do some other business."
In response to reporters' inquiries yesterday, Helge H. Wehmeier, president and chief executive of Bayer, issued a statement that said the company was "living up to its responsibility to support America in its hours of great need." Wehmeier said the company had reached "an agreement in principle" with the government and would make an announcement "shortly."
Others who have called on the company to supply medicine at lower prices have argued that the size of the government's proposed purchase, Cipro's importance to public health and the threat of other firms being recruited to make generic versions of the drug could induce Bayer to deliver the medicine more cheaply.
"In difficult times like these, everyone, including Bayer, must make sacrifices for the good of the country," said Sen. Charles E. Schumer (D-N.Y.), who has called on Thompson to ignore Bayer's patents and ask other firms to supply generic Cipro.
Thompson told the House Government Reform subcommittee on national security, veterans affairs and international relations yesterday that he would consider approaching generic manufacturers if Bayer did not significantly lower the drug's price for the government.
Phil Singer, Schumer's spokesman, said the request for generics was still in place. Getting Bayer to lower prices was important, he said, but "it's common sense to have a number of people producing it instead of relying on a single producer."
The government has said it wants to be able to treat 10 million people for as long as 60 days. At two tablets a day, that comes to 1.2 billion pills. Bayer is expected to supply about 100 million pills. At the price the company wanted, that would cost the government about $183 million.
Cipro retails for $4 to $5 per pill commercially, but it is supplied to the government at a discounted price. In a measure of the wide variability in pharmaceutical prices among countries, one company in Canada offered last week to supply that country with generic Cipro at 99 cents a tablet.
Apotex Inc., based in Toronto, said last week that the Canadian government had decided to ignore Bayer's patent and asked it to supply 1 million Cipro pills. Bayer later insisted it would be able to meet Canada's needs.
Yesterday, the Canadian government said it would stick with Bayer as long as the company was able to deliver all the medicine that was needed. The company said it would deliver medicine within 48 hours' notice. Thompson told CNN that Canada was paying $1.30 per pill.
"Bayer has played a bit of a shell game here," Allan Rock, Canada's health minister, said at a news conference. "Everybody knows they've got a problem worldwide with supply. We found out last week they couldn't satisfy our needs. We did what we felt we had to."
Catherine Lappe, senior adviser to Rock, said health officials were told twice that Bayer was unable to meet the government's order. "Bayer then came back and said they could supply," Lappe said. "Given they are the patent holder, the minister told officials to work with Bayer."
Lappe said the government will honor the agreement to buy generic Cipro from Apotex, but those pills will be stored. Jack Kay, president and chief executive of Apotex, said the company will deliver the pills next month.
Staff writer Rick Weiss contributed to this report.