The maker of a pricey drug that is a breakthrough cure for hepatitis C is facing mounting pressure from European and U.S. officials over its stunning price tag.
Sovaldi, the hep C treatment sold by Gilead Sciences, Silicon Valley’s largest biotech company, holds remarkable promise in the battle against hepatitis C, curing about 90 percent of patients with the most common form of the illness. The Food and Drug Administration cleared it in December, and while patients and doctors have since clamoured for the drug, Gilead has been heavily scrutinized for the $1,000-per-day price of the pills. The total cost of the 12-day treatment for a single patient can run $84,000, plus the cost of companion medications, a price that has alarmed officials on both sides of the Atlantic.
According to The Wall Street Journal, more than a dozen European countries are joining forces to negotiate a lower price for Sovaldi treatment; on Thursday, two U.S. senators asked Gilead for detailed financial information about the $11 billion deal in which it acquired the drug in 2011. Officials in Europe voiced concern that the cost of the treatment would become a burden on nations’ social services.
“If we accept such a high price, firstly, we won’t be able to treat everyone and we will also be creating a risk for our social security system,” Marisol Touraine, the French health minister, told news agency Agence France-Presse.
In the U.S., elected officials said Sovaldi would increase the government’s spending on prescription drugs by $6.5 billion this year and next if the hep C patients receiving treatment are enrolled in Medicare, according to the Journal. It would also raise health insurance premiums to rise as much as 8 percent, the biggest increase since 2008.
Health care providers and biotech leaders have argued that, even at $1,000 a pop, Sovaldi is much cheaper than the cost of the long-term care of hep C patients, who can live with the disease for decades. The illness, which 3.2 million Americans live with, ravages the liver over time and can cause a host of other dangerous diseases, including cancer.
Massachusetts Secretary of Health and Human Services John Polanowicz recently applauded Sovaldi as “a drug that could take out hep C” and potentially save millions of dollars that would otherwise be spent treating diseases caused by the virus, The Boston Globe reported.
A few Silicon Valley venture capital firms that lead investments into bio tech — including Sequoia Capital and Venrock — have also hailed the drug, pointing to both the long-term savings to the patient and the nation’s health care system, and the immediate and voluminous cash flow Sovaldi has generated.
Gilead’s revenues nearly doubled in one year thanks to the introduction of Sovaldi. The Foster-City based company announced profits of $2.22 billion, or $1.13 a share, on total sales of $5 billion in the first quarter of this year. Revenues during the quarter jumped 97.6 percent from the same quarter a year ago; Sovaldi produced $2.27 billion in sales during those three months.
Some insurance providers remain resistant to the drug, however, saying they were blindsided by the price and won’t be able to afford covering it. Others caution that patients may not take the pills as prescribed and end up on long-term treatment plans anyway, racking up health care expenses even after shelling out $84,000 for the pills.
Photo of Gilead Science’s pill Sovaldi, courtesy Gilead Sciences