KAISER WON'T COVER COST OF VIAGRA

It cites huge price tag -- over $100 million a year

After anguishing for weeks over how to cope with Viagra mania, Kaiser
Permanente, the nation's biggest HMO, will announce plans today to exclude
coverage of the popular blue pill for male impotence.

In addition, the HMO's new national policy will apply to other prescription
treatments for erectile dysfunction, including suppositories and pills not
yet on the market.

The decision was reached after an unprecedented national policy review that
had a team of physicians, ethicists and pharmacists delving into such
issues as the medical necessity for erections and the dangers of
recreational use of pills like Viagra.

A stunning 2 million prescriptions have been written for Pfizer Inc.'s
Viagra since it was approved by the Food and Drug Administration in April
- -- making Viagra the most successful new pharmaceutical on record.

It's become a staple of late-night talk-show banter, so easy to purchase
that one can order it over the Internet. But it's expensive -- selling
wholesale for $7 a pill, retail for about $9 or $10.

In the last analysis, though, economic factors, as opposed to medical
issues, decided the question for Kaiser. Even if users were limited to 10
pills a month, the HMO estimated that the cost would exceed $100 million a
year.

By comparison, Kaiser dispensed only $59 million worth of anti-virals last
year, a category that includes all the protease inhibitors and other
expensive drugs used to fight AIDS.

``We could, of course, build the cost of Viagra into everyone's premium,
but is that the right thing to do?'' said Dr. Francis Crosson, executive
director of the Permanente Federation, Kaiser's national physician
organization.

Kaiser's decision overrules some regional decisionmakers who had hoped the
HMO would provide at least limited coverage to help certain patients.

Several other HMOs have adopted rules limiting Viagra coverage to six pills
or so each month. About half of state-run Medicaid programs provide Viagra
benefits. Standard Medicare coverage doesn't include any self-administered
drugs, although some HMO plans have been extending Viagra benefits that
generally match what's being offered through commercial plans.

Viagra is the only FDA-approved pill affected by the new Kaiser policy. But
at least two other potential impotence treatments, considered to be a year
or two away from the FDA-approval stage, also will be excluded, along with
the so-called Muse suppository, Kaiser officials said.

SUPPLEMENTAL PLAN NEEDED

The policy will take full effect when standard HMO contracts come up for
renewal, generally the first of the year. Employers and other health-plan
purchasers would have to buy an optional supplemental benefit plan if they
want Kaiser to provide the coverage anyway.

Kaiser doctors may continue to write prescriptions for Viagra, and the drug
will be available in the HMO's pharmacies. But the standard $5 co-payment
will not cover the cost.

In Northern California, where Kaiser provides HMO coverage to roughly 2.7
million people, or 1 of every 3 insured residents, Viagra has never made
its way onto the list of reimbursed medications.

Summing up the impact of the new policy, a spokeswoman said, ``Viagra
wasn't covered yesterday, and it won't be covered tomorrow.''

Pfizer, not surprisingly, was looking for a different answer than what
Kaiser came up with.

``Obviously, we're disappointed,'' said spokeswoman Mariann Caprino. ``This
is a serious medical condition we're talking about here.''

She said excluding Viagra is inconsistent with policies that pay for such
things as seasonal allergy medications that also improve quality of life,
even if they don't treat life-threatening conditions.

Patients and advocates specializing in erectile dysfunction roundly
condemned Kaiser's decision, calling it a misguided slap against those who
want erection problems treated as a disease rather than a joke.

``Viagra has been terrific for me,'' said Santa Rosa writer Eugene Shapiro,
63, who is co-writing a book about the erection pill with a urologist.

Shapiro said taking the pill helped him regain not only full sexual
function but also helped him fight bouts of depression.

Tom Bruckman, executive director of the American Foundation for Urologic
Disease in Baltimore, Md., said he was ``shocked.''

``If there has been any experimental or recreational use of this drug, it's
been limited and will not be ongoing,'' he said. ``Viagra is a serious drug
for a serious medical condition.''

`STRANGE INCONSISTENCY'

Betsy Imholz, senior attorney for Consumers Union in San Francisco, noted
that Kaiser will pay for office treatments and surgery for erection
problems.

The policy banning payments for the drug ``seems to me a strange
inconsistency,'' she said.

``I understand the impetus is cost-cutting, but they're going to still pay
for very invasive and costly procedures, and not cover a safer and less
costly medication.''

But some top medical experts took Kaiser's side, maintaining that all HMO
members should not have to bear the cost of the sexual activities of a few
men.

``In today's world of limited resources, you have to draw the line
somewhere,'' said Dr. Arnold Relman, a former editor of the prestigious New
England Journal of Medicine.

1998 San Francisco Chronicle Page A1

Checked-by: (Joel W. Johnson)