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NY Survey Reveals Some Price Gouging for AIDS Drug

August 20, 1987

NEW YORK (AP) _ Most pharmacies are making only a modest profit off AZT, the experimental drug used to treat AIDS patients, but a few may be engaged in price gouging, according to a statewide survey issued Thursday.

The state Consumer Protection Board, which conducted the survey, said it was concerned by the high prices for AZT but uncertain whether they were justified by the cost of manufacturing the drug.

In its survey of 176 pharmacies, the board said it was quoted prices over the telephone that ranged from $200 to $3,384 for a month’s supply of AZT, the only drug approved for treating AIDS.

However, board officials said both the low and high quotations were probably inaccurate, in which case the actual range would be between approximately $700 and $1,500 for 360 capsules.

The vast majority of pharmacies charged between $700 and $900 for the monthly dose - about $190 to $250 for a bottle of 100 capsules.

Nationally, most AZT prices fell into the same range, according to a random survey by The Associated Press of pharmacies and homosexual community activists.

″Is that appropriate?″ asked Richard Kessel, executive director of the New York Consumer Protection Board. ″To me, it sounds like a lot of money.″

But Kessel said he didn’t know if pharmacies were overcharging or if their prices simply reflected high wholesale prices. He said he would hold a series of public hearings next month to find out. The hearings also will consider whether the wholesale price is appropriate, he said.

The manufacturer of AZT, the Burroughs Wellcome Co. of North Carolina, charges $188 per 100 capsules to wholesalers, according to spokesman Thack Brown.

A survey by the American Pharmaceutical Association showed that pharmacies pay a wholesale price of about $220 for the drug, according to a spokesman for the organization, Ron Williams. A majority of the pharmacies surveyed charged between $209 and $245 to their customers, he said.

″I think the charges that pharmacies are exploiting AIDS patients are just not true,″ said Williams. ″It’s unfortunate that the drug is so expensive, but I think pharmacists are doing their best to deal with that.″

Lori Berhman, a spokeswoman for the Gay Men’s Health Crisis in Manhattan, said the organization had not received any complaints from AIDS patients of price-gouging for AZT. However, she praised the Consumer Protection Board for investigating the issue.

Kessel said employees of his agency initially called pharmacies without identifying themselves as Consumer Protection Board workers. Later, the board made written requests for prices to the same pharmacies.

Many did not respond to either request, but of those that responded to both, 22 changed prices between the telephone call and the written request.

However, nearly half of those - 10 - gave higher prices to the board than they had given the unidentified telephone callers.

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