After months of tense negotiations and negative publicity over its posture toward AIDS drug pricing for state programs, Bristol-Myers Squibb and the ADAP Crisis Task Force are close to reaching an agreement that could be announced this week, according to people familiar with the negotiations.

The agreement may include price freezes, lower rebates and expedited patient assistance programs, says Ann Lefert, associate director of government relations at the National Alliance of State & Territorial AIDS Directors. The move comes as a growing number of state AIDS Drug Assistance Programs face a crisis, thanks to federal funding that has failed to keep up with demand caused by more people losing health insurance and shrinking state budgets. Some ADAPs have ballooning patient waiting lists and are cutting back services, despite $26 million in additional federal funding (back story and new data).

Most drugmakers responded to the crisis over the past few months by negotiating new terms for providing their meds to the programs. Bristol-Myers, however, was widely criticized for failing to do so and one group, the AIDS Healthcare Foundation, banned the drugmaker’s reps from its clinics and launched a blistering ‘Shame on BMS’ publicity campaign that featured a photo of ceo Lamberto Andreotti stuffing a $20 bill in his pocket as still more money falls from the sky (see this).

Early last month, California state controller John Chiang wrote Andreotti to explain the combination of fewer available state dollars and rising prices is an “unsustainable situation.” And he singled out Reyataz, a widely used HIV med. “The Average Wholesale Price for Reyataz is $13,040 per-year. By contrast, other commonly-prescribed AIDS drugs are priced significantly less. Moreover, BMS has increased the price of Reyataz yearly: since it was approved in 2003, the price of Reyataz has increased by more than 25 percent.” On July 30, Raymond Sacchetti, Bristol-Myers’ senior vp for virology, responded (read the letter) by defending pricing and noting that patient assistance programs were recently enhanced, but that talks were under way to reach a deal.

Among the other drugmakers that have come to terms recently with the ADAP Task Force are Merck, Gilead Sciences, Boehringer Ingelheim and Viiv Healthcare (which is joint venture between Pfizer and GlaxoSmithKline). Bristol-Myers, however, is a significant player, thanks to Reyataz and other meds that combine to give the drugmaker a 12 percent share of the drugs covered by ADAP agreements, according to Lefert. “Given the degree of crisis in ADAPs, it’s unfortunate that it was necessary for us to need such an aggressive and sustained campaign to get (Bristol-Myers) to negotiate,” says AHF ceo Mike Weinstein. “And we hope they’ll learn from this and negotaite with stakeholders in a different fashion in the future.”