Oct. 27 (Bloomberg) -- Health plans will pay for expanded use of Merck & Co.’s Gardasil vaccine after a U.S. panel recommended it be given to boys to reduce transmission of a virus that causes cervical cancer, insurance executives said.
The policy endorsed by the Centers for Disease Control and Prevention’s immunization committee Oct. 25 may not halt a three-year slide in sales because of lingering perception that only girls need the vaccine, health plan executives said.
Gardasil aims to prevent sexually transmitted human papillomavirus infections that can lead to cervical cancer, genital warts, head and neck tumors and malignancies of the penis and anus in men. Sales hit a peak of $1.48 billion in 2007 and declined for three consecutive years to $988 million last year, according to data compiled by Bloomberg.
“It is hard to see at this point any demonstrative change in sales,” said Tony Butler, an analyst at Barclays Capital in New York, who said both his teenage sons got vaccinated. He estimates that Gardasil sales will barely budge next year to $1.12 billion from $1.09 billion this year.
Health insurers rely heavily on the CDC panel to decide what immunizations are covered, Susan Pisano, a spokeswoman for America’s Health Insurance Plans, a Washington lobbying group, said in a telephone interview.
Cigna Corp., based in Bloomfield, Connecticut, doesn’t cover Gardasil for boys unless it is considered medically necessary by a physician and is reviewing its policy based on the panel’s recommendation, Joe Mondy, a spokesman, said in an e-mail.
WellPoint Inc., based in Indianapolis, already covers Gardasil for boys, Lori McLaughlin, a spokeswoman, said in an e- mail. Hartford, Connecticut-based Aetna Inc. considers the vaccine medically necessary for boys ages 9 to 26, Tammy Arnold, a spokeswoman, said in an e-mail.
The American Cancer Society estimates about 12,710 new cases of cervical cancer this year and about 4,290 deaths from the disease.
The health law signed by President Barack Obama last year requires insurers to cover recommended preventive services and vaccines with no co-payments or other cost sharing for people enrolled after Sept. 23, 2010. Expanded coverage of Gardasil for this group doesn’t have to begin for at least a year, according to the Obama administration’s website on the law.
The vaccine costs $108 for patients covered by government health plans, and about $130 for people covered by private- sector plans, said Anne Schuchat, director of CDC’s National Center for Immunization and Respiratory Diseases.
The recommendation opens a new chapter for a drug hailed by doctors that hasn’t lived up to expectations, in part because of concerns about side-effects, including headaches and fever.
Merck, based in Whitehouse Station, New Jersey, won U.S. approval for Gardasil in 2006 for female patients ages 9 to 26; it was cleared for males in that group in 2009.
While the vaccine is most effective when given to 11- or 12-year-olds, the CDC panel said boys as young as 9 can receive it, Schuchat said. The panel also recommended giving the vaccine to males from 13 to 21 who haven’t previously received it.
As of last month, almost 40 million doses of Gardasil had been given in the U.S.
“It is an incredible scientific breakthrough, but in the market there has been a tremendous amount of headwinds,” Butler said.
Among these is the perception that only girls need the vaccine. Last year, about 66,000 girls ages 11 to 13 who were covered by WellPoint plans received the vaccine, compared with about 9,000 boys of the same age, said McLaughlin, the company spokeswoman.
Despite the Oct. 25 recommendation, “we think there will be a different pattern of adoption than the rapid rate for women,” said Samuel Nussbaum, WellPoint’s chief medical officer, in an interview.
“The health impact on women is far more consequential, so that is what will drive it,” Nussbaum said.
The vaccine’s use became the focus of a Republican presidential debate last month when Representative Michele Bachman of Minnesota, who is running for the party’s nomination, claimed the vaccine causes mental retardation. Alice Stewart, a spokeswoman, declined to comment on the panel’s recommendation.
Texas Governor Rick Perry, another Republican presidential contender, drew attacks from rivals for issuing an executive order in 2007 that made his state the first to mandate the vaccine’s use in school-age girls.
Community doctors’ reluctance to consistently recommend the vaccine is the reason for the sales shortfall, said Sunil Sood, chairman of pediatrics at Southside Hospital in Bay Shore, New York.
“My impression is that pediatricians, they are not doing their job,” he said in a telephone interview. “Sometimes they shy away from bringing up something that could be controversial.”
“It is a billion dollar product, there were clearly expectations for it to be much greater” when it first came out, Butler said. Given that the vaccine was already approved for boys, “I don’t know what really changes” as a result of the U.S. recommendation.
--With assistance from Molly Peterson in Washington. Editors: Adriel Bettelheim, Andrew Pollack
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