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Insurers Would Come Down Hard on "Love Drug": Experts

March 28, 1998 -- A little diamond-shaped pill that cures impotence in some men - a potential red-hot market seller - may get a cold shoulder from bottom-line wary insurers, experts say.

"Most health plans are pretty good reimbursing for fertility drugs, but some aren't," noted Jack Shapiro, who heads a health-care market-research company and hosts a weekly Talkamerica Radio Network show.

"If the big insurers start to cut back on fertility treatments, I can't imagine them paying for this drug."

Giant insurer Aetna Inc. already has lowered the boom on paying for advanced fertility treatments, saying its U.S. Healthcare health plan will scotch coverage on April 1.

"You have to wonder about the health-maintenance organizations in trouble now - Oxford, Pacific Care and Aetna U.S. Healthcare," said Shapiro.

"And you have to question whether they're going to be too keen on reimbursing for an impotency treatment."

On the other hand, Shapiro noted that the 7-a-pill cost of Viagra - compared with the cost of an injectable drug that requires a visit to the doctor - might make it an appealing alternative for insurers.

"Viagra would represent a savings in that gard," he said.

Managed-care plans have tried to keep a lid on drug spending by barring certain categories considered inessential.

"Viagra will be a potential budget-buster for many of these HMO's," Steven Gerber, an analyst at CIBC Oppenheimer, told The New York Times. "It will be an interesting test case."

Shapiro called the issue "complicated."

"The insurance companies and drug plans hate to pay for preventative-type things," he said. "Where they can use this to market themselves, they can look good. But I would wonder what kind of restrictions they'd put on this drug before you can use it.

"I think a lot of the carriers will cover it," he added. "I just wonder what kinds of restrictions there'll be."

With the turnover rate in HMOS's at 15 percent or more a year, he said, it benefits the HMO to just stall in reimbursing on what may be borderline-type treatments, Shapiro said.

"With that kind of turnover, it's even money you're not even in their plan in a year," he noted.

Viagra, made by drug giant Pfizer Pharmaceuticals, is believed to have the potential to become one of the top-selling drugs of all time.

It's an erection enhancer, and has been shown in tests to help impotence associated with diabetes, spinal-cord injuries, prostate surgery and even impotence with mysterious causes.

It's also the first oral therapy. Other treatments include injections, pellets inserted into the penis and mechanical pumps.

Analysts have predicted Viagra will generate revenues of $2 billion by 2001.

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