News / Health

Pricey Hepatitis C Drug Draws Criticism

Activists display placards during a rally at the AIDS Conference 2014 at the Melbourne Convention and Exhibition Centre (MCEC) in Melbourne, on July 22, 2014. Activists display placards during a rally at the AIDS Conference 2014 at the Melbourne Convention and Exhibition Centre (MCEC) in Melbourne, on July 22, 2014.
Activists display placards during a rally at the AIDS Conference 2014 at the Melbourne Convention and Exhibition Centre (MCEC) in Melbourne, on July 22, 2014.
Activists display placards during a rally at the AIDS Conference 2014 at the Melbourne Convention and Exhibition Centre (MCEC) in Melbourne, on July 22, 2014.
Anita Powell

To hear scientists talk about it, it’s nothing short of a wonder drug.

The drug is sofosbuvir, called Solvadi by its manufacturer, and its effectiveness in treating hepatitis C is so pronounced that the U.S. regulators designated it “breakthrough therapy” when they approved it for U.S. markets last year.

The catch is that it doesn’t come cheap: a single pill costs $1,000, meaning the 12-week daily dose prescribed for most patients will cost $84,000. That has brought howls of protests from activists accusing California-based Gilead Sciences of charging extortionate prices.

The dispute highlights the continuing conundrum afflicting medical research and spiraling health care costs, not only in the United States and elsewhere. What’s an appropriate price to charge for life-changing, or life-saving, drug therapies and who determines it?

Pharmaceutical companies argue they spend billions of dollars to research, discover and test such breakthrough drugs, so the production costs account for just a fraction of the company’s overall investment.

Activists-- some of whom traveled to the International AIDS conference in Melbourne, Australia, to protest Gilead’s decisions-- say drug companies gouge customers and patients with arbitrary pricing that varies widely from place to place.

“We want Gilead to explain, number one, on what they’re basing their price, whether it’s $84,000 in Europe and the United States, or even $2,000 in another country,” said Karyn Kaplan, who directs international Hepatitis and HIV policy and advocacy for the New York-based organization, the Treatment Action Group. “We want to understand what is their price based on and why won’t they give a price that will be affordable to all who need it.”

Gregg Alton, executive vice president for corporate and medical affairs for Gilead Sciences, said the drug is priced differently around the world. In Egypt, for example, which has a high rate of hepatitis C, the drug will cost just $300 per month.

Alton also noted that the company will give generic licensing to several factories, which will push down the price in the future.

“It is a fantastic drug. It’s really changing the landscape of Hepatitis C and the ability to treat hepatitis C, from a largely untreatable disease to one we can cure with a more than 90 percent rate,” he told VOA.

A study by researchers at the University of Liverpool concluded that the Solvadi pill can be made for a few U.S. cents, and that even at $1 a pill, Gilead will make a healthy profit. 

Alton said in considering the drug’s price, one should take into account that a patient who is cured of hepatitis C is free not only from the disease, but also the financial burden of future treatments.

“So actually on a cost basis, if you just look at pure cost, it is actually less expensive than treating HIV, because HIV being chronic, if you actually put the cost of actually treating for life, it turns out to be more,” Alton said. “And, again, the other thing is that we actually hope the cost comes down, that’s the purpose of the generic licensing.”

As many as 150 million people around the world have the chronic version of this liver disease that is spread, like HIV, through blood or sexual contact, according to the World Health Organization. For that reason, many HIV patients are at higher risk for contracting hepatitis C. Symptoms tend to surface late in the disease’s path, and can lead to liver cancer.

As a whole, the hepatitis family of viruses kills about 1 million people per year, according to the WHO.

For now, Gilead is raking in profits. Earlier this week, the company announced second-quarter sales of Sovaldi at a whopping $3.5 billion. That puts this little yellow pill on track to be one of the pharmaceutical industry’s biggest all-time hits, with sales expected to reach those of cholesterol-lowering drug Lipitor.

“We are not at all against Gilead making money. They are a corporation, they are a for-profit entity. So we all recognize and agree that originator companies make investments, and that they should be appropriately rewarded,” Kaplan said. “However, what that appropriate reward is and the lack of transparency in how pharmaceutical originators, pharmaceutical companies come up with that price, is not in touch with reality.”

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Comments page of 2
by: John
July 29, 2014 11:22 AM
Sam. Your approach certainly sounds like the most sensible one. You'd have to make sure you weren't ripped off by counterfeits though. But I can't think of a general solution to the overall problem. Stricter testing procedures raise the cost of drugs, and activists whine about the cost to non-white, non-Western users, so Westerners, particularly US citizens, subsidize $300 payments in Egypt by paying $84 000 themselves. One may note that Africans refuse to recognize Western patents, so the 'charitable' pharma firms are backing MSF's testing of the new sleeping sickness drug. The cost is naturally added to our bills.

by: Julie Dinkins-Borkowski
July 28, 2014 2:04 AM
I have been trying to get activist to notice the Cf drug that is hardly a cure is going to cost patients and their families $300,000 a year. And these drug companies are causing people to lose their insurance and lose their livelihood because no one wants to hire someone with such high priced health needs. Drug company execs are making billions off the backs of poor sick people, and no one cares.

by: CaliforniaDreaming from: Ventura
July 27, 2014 8:21 PM
The uproar seems to be mostly from the PMB's who are concerned only with drug costs and payments. The health insurers are the ones who benefit since this drug is a cure for a deadly disease. They save the potential payments of liver cancer treatments, transplants, and all the late stage problems that dwarf the cost of Sovaldi. If one looks at the OVERALL picture, the drug cost is minor in comparison, though $84,000 is not a minor cost; but what is the cost of a life?

by: Jonathan from: NYC
July 27, 2014 8:10 PM
This must be the gazillioneth time that an article has been written about the price of Solvaldi! Shut up already! Insurance Co's like United Health Care are paying their Execs $10-30 Million plus and Exxon books $5-10 billion dollars per quarter and nobody says anything. Isn't Provenge just as expensive and doesn't offer a cure? All the political healthcare activist should just shut up and by the stock! I did @ $63 last October! Market forces will solve any long term problems. This is America people!

by: edwin cameron from: australia
July 27, 2014 7:12 PM
meanwhile they rake in billions of $$$ and the people that can't afford the drug suffer,has anyone thought about how contagious hep c is??commonsense dictates supply = eradication,as usual Greedy Big Pharma can't get it's snout out of the trough and the virus keeps destroying family's and peoples lives,as for that comment about Gay and drug addicts deserving the cost,well i won't dignify an answer,he is clearly a [insult redacted]!!

by: Trust Gendron
July 27, 2014 2:38 PM
@ John Rudy
Not all Hep C is contracted through immoral acts. I have Hep C and got mine from a Tattoo before the Tattoo industry became
regulated by State and Fed laws.
Here are a few more ways Baby Boomers contracted Hep C :

*Blood transfusion or blood therapy or solid organ transplant performed before 1992, when a highly sensitive test to screen blood for hepatitis C was developed.
*Kidney dialysis.
*Blood products used to treat clotting problems made before 1987.
*Health care workers who have been exposed to HCV-contaminated blood through a needle stick or splashes to the eye.
*Infants born to infected mothers.

by: Colin Newton from: Pennsylvania
July 27, 2014 9:59 AM
Three ways to limit the price of drugs:
1) A very expensive part of drug development is clinical trials, especially phase 3. Clinical trials could be run limiting payments to doctors and hospitals and could be designed by the FDA and the drug applicants.
2) Limit payment of executives (CEOs, CFOs, presidents etc.) to an ethically acceptable amount (why does anyone need more than $10 million a year?).
3) Restructure corporate and individual tax for health care companies.

by: abbey Lynn from: wisconsin
July 27, 2014 5:48 AM
Really? I'm a 35 year old suburban housewife with two kids and I have it. I've never made any poor decisions that lead to my Hep C. I was born with a congenital heart defect and had open heart surgery when I was two. I contracted it when I was two via a blood transfusion. Get your head out of your rear please.

by: kDavis26 from: Madison, WI, USA
July 27, 2014 2:44 AM
I can see both sides of this debate. My only thought is that it shouldn't be only about Solvaldi. There are arthritis medicines that cost $60,000 per year, year after year, possibly with the patient living 25 more years and never being cured. I have a relative with severe Alzheimer's who suffered a heart attack and is in a home that costs $12,000 per month, and doesn't have enough cognition to know she's even there.

I'm OK with putting a cap on the cost/benefit ratio for medicine - we won't pay more than X for each additional healthy month some treatment is expected to create, or something along those lines, but let's not make it specific to one medicine. If Solvaldi is too expensive, ok, but then everything with a worse cost/benefit ratio is also too expensive.

by: John Rudy from: Seattle , Washington USA
July 26, 2014 11:56 PM
Hepatitis is primarily contracted through IMMORAL sex acts and / or ILLEGAL IV drug addiction . I say let these people pay for their own consequences , not others !!!
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