The Miami Herald, Inc.; Sunday, January 5, 1997
Peggy Rogers , Herald Staff Writer

No longer expected to die any time soon, he couldn't find a buyer for his policy. Instead of rejoicing, he recently went off the drugs so his prognosis will worsen.

"He said, `I know you're going to be angry with me, but I need the money,' " said Berne Teeple, an AIDS activist and vice president of the company that had prepared to purchase the policy. "It just made me sick."

The AIDS drugs that are prolonging lives are also upending an industry that banks on death.

Companies like Teeple's American Life Resources, a national firm with a Miami Beach office, buy the life insurance policies of people who need quick cash and are not expected to live long.

These viatical companies pay a percentage of the policy's value, keep up the premiums and then collect the full value at death. The industry emerged seven years ago, when AIDS was a swift and certain killer.

With the new life-prolonging protease inhibitor drugs, however, much has changed.

The better some people get on the drugs, the harder it is to turn their policies into quick cash. For patients such as Teeple's client who are out of work and money, improving health can dash viatical negotiations.

"I know people who have delayed the onset of protease therapy until they sell their policies," said Barry Teeters, marketing director of a Fort Lauderdale-based viatical firm, Page & Associates. "The worse your prognosis, the better your settlement. There are people who have just become so healthy on the protease that they just can't [sell their policies]."

For the industry, the greater the promise of new treatments, the greater the uncertainties. No one knows how long the drugs will work, whom they will help and how long the viatical companies will have to wait for a return on their investment. Mostly AIDS patients

"The problem that the industry faces is that probably 90 to 95 percent of the policies they have bought over the last five years are from people with AIDS," said William E. Kelley, executive director of the Viatical Association of America, a national trade association.

"In weighing the overall risk, they thought they had their numbers correct and then they went to the bank to borrow money," Kelley said. "Now, they're not seeing people die like they thought they would."

This twist in the AIDS epidemic is one of many produced by the protease inhibitor drugs, the first of which was approved a year ago. While not a cure, they are prolonging lives and restoring vigor. They also cost huge sums, don't work for many people and often create resistance.

The impact on the viatical industry stands out because of its controversial nature.

"The goal is to have dead people, unlike the health care industry, which is to make people better," said Linda Quick, president of the South Florida Hospital and Healthcare Association, a medical trade group.

Quick received a marketing call a few months ago from one viatical firm trying to expand its business to people with other terminal illnesses. "They thought: Wouldn't it be wonderful to have me get all the hospitals together to offer this as a benefit to all of their employees," Quick said.

"I can see where someone would want to have this option; what I object to is having someone run around actually trying to sell this," she said. "What frightens me is that they would talk too many people into selling their life insurance long before they need to, and then the intended beneficiaries are left with nothing."

Many AIDS advocates have come to accept the industry's value -- and its problems have become problems for patients.

"I have really seen where it's made a difference in people's lives," said Miami Beach attorney Paul Hampton Crockett, who specializes in HIV law and helps clients negotiate the highest possible viatical settlements. "I've known people who have been able to fly all their family members to be together. . . . I've known people who have been able to get out of debt and get real peace of mind."

Because of the current situation, people who used to get 75 percent or 85 percent of their policy's value in cash are now getting 65 or 55, experts say.

At American Life Resources, the average payment for someone with a life expectancy of less than two years was 75 cents on the dollar, said Teeple. It's now about 58 percent.

Teeple said he would not pay below 50 cents on the dollar, which is why he has the names of about 75 people on file who want to sell their policies but are so healthy that doctors will not predict their life expectancy. Health hurts deal

Among those is the man who was preparing to sell his $200,000 policy when he started on a protease inhibitor. He first went to Teeple a year ago when his virus-fighting T-cell count was at 30, compared with a normal level of 500 to 1,500. American Life Resources proposed paying him 75 percent of his policy's value, pending the receipt of medical and insurance documentation.

Delays in receiving his policy information dragged the process out for several months, Teeple said. Meanwhile, his T-cell count shot up to 200, and he was no longer a viatical candidate. The man just told Teeple he has gone off the drugs, is waiting to get his next T-cell count and, if it has dropped back down, he will try to market his policy again.

"It's valuing money more than valuing life," Teeple said. "I've heard others suggest it in the past six months -- I'm going to go off my protease inhibitors . . ."

Stopping the treatment is considered extremely dangerous to people with AIDS. While they take the drug, their bodies typically build up resistance as their health improves. Stopping treatment, even for a matter of days, can allow the drug-resistant strain to replicate so rapidly that restarting is useless.

Some companies are exploiting patients' anxiousness to settle by offering far too little, say advocates and even industry members. "We have seen offers coming in at 30 percent and 40 percent," said Crockett, the Miami Beach attorney. Some won't buy policies

One San Francisco firm, Dignity Partners, has stopped purchasing policies from people with HIV until research shows the drugs' long-term impact.

Some companies have simply shut down, said William Kelley of the Viatical Association of American. "The wolf is at the door."

More and more companies are seeking money from private investors, as opposed to banks and other institutional sources, to purchase policies, experts say. But that can jeopardize the money of private individuals who don't follow the changing nature of AIDS treatment.

A Fort Myers-based firm, Robin Hood International, tells private investors that they can make as much as 60 percent profit over five years by buying life insurance policies.

"When you're dealing with the viatical industry, you have to be fair to the patient and you have to be fair to the investor," said Robin Hood Senior Vice President Jeannie Cook. "There has to be a fair return for it to be worth it. . . . A lot of these people are small investors who really want to do something positive with their money. It's their life savings." Branching out

Many surviving companies have expanded into other terminal illnesses, such as heart disease, Alzheimer's and Amyotrophic Lateral Sclerosis, also known as Lou Gehrig's disease.

Robin Hood executive assistant Kristan Fewkes said many of the firm's investors would like to switch to other diseases now -- a move the firm favored from the beginning. But before the protease inhibitors became an issue the investors didn't want it to. "They said, `Let's do AIDS. Let's do AIDS.' "

The viatical industry will not only recover, but will grow, some members predict. It is now estimated at 50 to 60 firms that take in $400 million a year.

"The growth of the industry is not in HIV," said Barry Teeters of Page & Associates. "You're going to see this industry grow to be a multibillion dollar industry and it'll be with cancer, ALS or Lou Gehrig's disease, they're the real biggies."

970105
MH970102

Always watch for outdated information. This article first appeared in 1997. This material is designed to support, not replace, the relationship that exists between you and your doctor.

AEGiS presents published material, reprinted with permission and neither endorses nor opposes any material. All information contained on this website, including information relating to health conditions, products, and treatments, is for informational purposes only. It is often presented in summary or aggregate form. It is not meant to be a substitute for the advice provided by your own physician or other medical professionals. Always discuss treatment options with a doctor who specializes in treating HIV.

Copyright ©1980, 1997. AEGiS. All materials appearing on AEGiS are protected by copyright as a collective work or compilation under U.S. copyright and other laws and are the property of AEGiS, or the party credited as the provider of the content. .