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. Last Updated: 07/27/2016

Roche Prices HIV Drug at $20,000

LONDON -- Switzerland's Roche Holding AG on Monday priced its new HIV drug Fuzeon at a record-breaking 18,980 euros ($20,570) a year, fueling controversy about the cost of AIDS treatments.

Fuzeon, also known as T-20, is the first in a new class of drugs known as fusion inhibitors designed for people resistant to other AIDS medicines. Unlike existing drugs that work inside the cell, it blocks HIV from entering healthy human immune cells.

Roche said the high cost -- more than any other AIDS drug on the market -- reflected the complexity of manufacturing the product, involving more than 100 production steps.

"This drug is 10 times more complex to manufacture than the next most complex class of drug in the HIV arena, which is the protease inhibitors," David Reddy, head of Roche's HIV business, said in an interview.

He said Fuzeon had cost 840 million Swiss francs to develop, excluding marketing expenses. More than half of that was accounted for by clinical trials, and the lion's share of the rest reflected investment in specialist manufacturing facilities. Pure research costs were only around 1 percent.

Reddy declined to comment on the profit margin that Roche would enjoy on sales of Fuzeon, which it believes could eventually have peak annual sales of up to 1 billion francs ($740 million).

A twice-daily injection that is given in combination with existing drugs, Fuzeon is expected to win marketing approval from regulators in both Europe and the United States next month.

Reddy said he did not envisage Fuzeon ever being suitable for use in Africa -- the epicenter of the global AIDS pandemic -- given the drug's very high cost of production.

With analysts estimating that as many as 50,000 patients in North America and Europe are resistant to other AIDS therapies and ready for Fuzeon, demand is expected to outstrip supply for the foreseeable future. By the end of 2004, Roche and its U.S. partner Trimeris Inc. expect to be able to supply the drug to a maximum of 32,000 people, rising to 39,000 by the end of 2005.