Gilead Sciences Asked to Explain Their Prices

Gilead Sciences

How much should a patient pay for a hepatitis C cure? If Gilead Sciences has its way, the price tag in the United States will be in the range of $84,000. Even in America, where medicine is generally more expensive than in other parts of the world, that is quite a substantial amount to pay. So much so that politicians have stepped in to ask Gilead Sciences to explain why the price is so high.

On Thursday, Democratic members of the Committee on Energy and Commerce – representatives Henry Waxman, Frank Pallone and Diana DeGette – sent a letter to John C. Martin, the chief executive of the Foster City, California-based company, asking him to explain, by April 3, how the new medication, Sovaldi, could cost $1000 per pill.

In the letter, the legislators acknowledge that while the new drug could be a “breakthrough treatment,” potentially saving the lives of thousands of people each year, they fear that the drug will not save anyone if patients cannot afford it.

When Gilead applied to the Food and Drug Administration for approval of Sovaldi, they applied for, and received, a special fast-track exemption which is given when a drug can show that it is a significant advancement over what is currently available. Sovaldi was shown to have a cure rate close to 90 percent, with fewer side effects than current standard treatments, which have a cure rate in the range of 50 to 60 percent.

In addition to explaining how they priced the drug, Mr. Martin is being asked to clarify what it was worth to the company to get fast track approval and if those savings factored into the price, if Gilead is providing low-income patients with discounts, and what the public health impact of Sovaldi will be if it is so expensive that health agencies and insurers cannot buy it.

At the current time, the legislators noted, the states of Colorado and Pennsylvania are taking steps to limit access to the drug. The high price could put a large dent in the state’s Medicaid budget, so it will only be given to the sickest. California is considering similar measures.

Gilead has said that it uses a tiered system of pricing, based on a country’s income. In the United Kingdom, Sovaldi’s price is about $57,000 for the full 12-week treatment. Germany pays around $66,000. Gilead is selling the drug to Egypt for $900 for the entire treatment, or about 1 percent of what it costs in the United States.

Gilead’s stock price fell on word that they were being asked to explain their price. The stock of other pharmaceuticals also fell on fears that they might also be asked to explain their prices.

There are about 3 million Americans who have been diagnosed with hepatitis C. That number is expected to go up as screenings become more available. Hepatitis C can damage the liver. One of the most dangerous aspects of hepatitis C is that it does not have any obvious symptoms and so people may go a long time without ever knowing that they have the disease. If the infection is not treated, the liver can be scarred, which can lead to cirrhosis. If left untreated, cirrhosis can lead to liver failure and death.

With a cure rate of 90 percent, Sovaldi could help quite a few people, but the drug is expensive. Congress has stepped in to ask Gilead Sciences to explain why the price for their drug is so high.

By Dan Reyes

Los Angeles Times
Reuters
House Committee on Energy and Commerce