In Wake of Investigation, Emails Reveal How Gilead Priced Its Hep C Blockbusters

Published: Dec 15, 2015

In Wake of Investigation, Emails Reveal How Gilead Priced Its Hep C Blockbusters
December 11, 2015
By Alex Keown, Breaking News Staff

FOSTER CITY, Calif. – There has been much criticism over Gilead Sciences, Inc. ’s pricing for its blockbuster hepatitis C treatment Sovaldi and Harvoni, particularly as the medication inched toward $84,000 and $94,500 respectively for a 12-week regimen of treatment.

But now emails obtained by Bloomberg show how Gilead executives priced their $20 billion blockbuster treatments. The emails show how the company pushed the price of the treatments up from $65,000 to $84,000 over the course of two years when it came to pricing Sovaldi. Bloomberg reported the emails show company executives “homed in on a price that was just below where they thought insurers would add significant restrictions for the breakthrough hepatitis C remedy.” Gilead said it sought to price its treatments at a price that would allow broad access with minimal restrictions, Bloomberg said. Additionally, the company looked to lay a foundation for pricing of future drug treatments, the emails suggested.

The emails were obtained after a report released by a U.S. Senate investigation said the company was maximizing profits before providing needed care to patients.

Despite the price, Gilead’s hepatitis C treatments have proven to be highly effective since they were launched. Sovaldi has had a 90 percent efficacy in curing, not treating, but curing, the liver disease when used with other treatments —surpassing older treatments. It was because of that high rate of efficacy that Gilead was able to command such a high price for Sovaldi. Bloomberg reported in 2013 officials from IMS Consulting Group “suggested an ‘acceptable’ price range of $80,000 to $90,000”for Sovaldi. That price would also set the standard for future drugs the company developed, executives said, according to Bloomberg

The high cost of Gilead’s drugs has led some prescription services, such as Express Scripts Holding Company to drop coverage of Sovaldi because of the costs. Likewise, the Southeastern Pennsylvania Transportation Authority filed a lawsuit against drugmaker Gilead charging the company is abusing its rights as a patent holder “by charging discriminatory prices that apparently have no other rational basis other than to inflate the company's bottom line.” Because of that high price, the transit authority, which paid out $2.4 million for Sovaldi in 2014, said the drug has brought financial harm to the organization. The lawsuit additionally notes Sovaldi can be acquired overseas in countries like India and Egypt, for about $900 per 12-week regimen through generics programs Gilead works with the provide the drug in poorer countries.

In addition, the U.S. Senate report said the high cost of the drugs has also been damaging to Medicaid programs. According to the investigation, Medicaid programs spent $1.3 billion before rebates for the hepatitis C drugs to treat fewer than 2.4 percent of enrollees diagnosed with the liver disease. More than 700,000 hepatitis C patients on state Medicaid programs are still waiting to receive their medications.

Sen. Ron Wyden, an Oregon Democrat and Sen. Chuck Grassley, an Iowa Republican, the two lead lawmakers conducting the probe, expressed concern over the high price of the treatments and how that negatively impacts healthcare budgets. The senators said Gilead refused to offer substantial discounts for the drugs, or when the company did offer discounts, they came with unrealistic strings attached. In a statement, Wyden said Gilead cannot justify the high cost of the drugs by using research and development or the multi-billion acquisition of Pharmasset, the drug’s first developer, for the price point of Sovaldi.

Gilead pursued a calculated scheme for pricing and marketing its Hepatitis C drug based on one primary goal, maximizing revenue, regardless of the human consequences,” Wyden said in a statement. “Gilead knew these prices would put treatment out of the reach of millions and cause extraordinary problems for Medicare and Medicaid, but still the company went ahead. If Gilead’s approach to pricing is the future of how blockbuster drugs are launched, it will cost billions and billions of dollars to treat just a fraction of patients.”

High prescription prices are likely to take center stage during the 2016 presidential election, particularly after former Secretary of State Hillary Clinton, a candidate for the Democratic nomination, tweeted out her support for prescription drug price controls following Turing Pharmaceuticals' 5,000 percent increase for Daraprim, a 65-year-old toxoplasmosis treatment.

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