According to a U.S. Senate investigation, drug company Gilead Sciences has planned all along to charge exorbitant prices for its hepatitis C drug – with affordability and patient access as a mere “afterthought.”
In the investigation on the pricing of Gilead’s Sovaldi and follow-on combination drug Harvoni, it was found that U.S. state Medicaid platforms spent $1.3 billion prior to rebates in 2014 on medications to treat fewer than 2.4 percent of enrolled individuals with the liver condition.
The 18-month probe also found that a great majority of over 700,000 on state Medicaid for poor hepatitis-C patients are still yet to be treated.
"It was always Gilead's plan to maximize revenue, and affordability and accessibility was an afterthought," said Democrat senator Ron Wyden from Oregon at a press conference announcing the report findings.
According to Wyden and Republican senator Chuck Grassley from Iowa, Solvadi and Harvoni costs reflected purely a drive to maximize profits and not the cost of research and development or the $11 billion shelled out by Gilead to acquire the drugs from Pharmasset.
Sovaldi, gaining federal regulatory nod in late 2013, has a price of $84,000 for a 12-week treatment run. To Gilead this appeared to deliver the right balance, but public outrage and a Senate committee review of over 20,000 pages of company documents still ensued.
According to the key findings made by the investigation, Sovaldi could have been priced at $115,000 for a treatment course. Gilead weighed a range of prices against the value to shareholders and “reputational risks,” or the likely outrage from the public.
The range was $50,000 to $115,000. At the upper limit, Gilead executives predicted “high levels of advocacy group criticism and negative PR/competitive messaging.”
The report added that hepatitis-C patients were also warehoused to limit Sovaldi access, given pent-up demand. As treating more advanced individuals would be most cost-effective, Oregon built a plan to treat 500 patients a year for the first six years – despite over 10,000 Medicaid patients being considered food treatment candidates.
Gilead also set “cost-per-cure” and not cost for its drug development.
"Company officials surmised that its drug had a ‘value premium' because of increased efficacy and tolerability, shorter treatment duration, and its potential to ultimately be part of an all-oral regimen," the Senate report stated.
In a statement, Gilead expressed disagreement with the report’s conclusions, saying prices are less today than the cost of previous regimens due to discounts and rebates. It argued that its drugs decrease long-term costs linked to managing the chronic condition, such as preventing the need for transplant or the onset of liver failure.
High medicine costs in the U.S. have prompted public scrutiny and government probes, and have become a salient part of the November 2016 presidential election campaign of Democrats Hillary Clinton, Bernie Sanders, and Martin O’Malley.
