February 29, 2016
By Alex Keown, BioSpace.com Breaking News Staff
FOSTER CITY, Calif. – Gilead Sciences is well known for the efficacy of its blockbuster hepatitis C drug Sovaldi which effectively cures the disease within 12 weeks, but comes with a cost of about $1,000 per pill in the United States.
That’s a price that is not paid in many of the world’s nations, such as Egypt where hepatitis C is rampant. In those countries, Sovaldi can be acquired for much more reasonable rates. In Egypt for example, the drug is sold at a price of about $900, according to a report in Bloomberg. Gilead is able to manufacture Sovaldi for about $100 for the 12-week regimen. The lower price in Egypt and other countries that have higher poor populations, is set, in part by Gregg Alton, Gilead’s executive vice president of corporate and medical affairs. Part of Alton’s role at Gilead is to ensure that the company’s hep C drugs like Sovaldi, as well as Harvoni, are available to patients in poor countries, but at a significantly reduced cost than patients in the U.S. pay.
Alton is under orders to get the drugs to as many patients as possible without losing money, Bloomberg reported. Alton and his team negotiate with the countries that have low income levels, but high rates of hepatitis C. The governments of those countries foot much of the bill for the drugs, but at the lower rates Alton negotiates. Currently Sovaldi is sold in 29 other countries, including 16 where the price is significantly cut, such as Egypt, Cuba, the Philippines and Brazil. Prices vary from country to country. For example, in Brazil, the price of a 12-week regimen of Sovaldi is available for about $6,785, Bloomberg said.
In addition to those negotiated lower prices, Gilead is working with generics manufacturers in India to develop generics of Sovaldi to be sold in those countries the company has identified as having the most need. Gilead will receive about 7 percent of those generic sales, Bloomberg reported.
With reports of the availability of Sovaldi at a significantly cheaper price than patients in the U.S. pay, Gilead will certainly face even more criticism of its pricing. Most drug companies tend to sell their products at a higher rate in the U.S. due to a lack of governmental price controls and insurance coverage, but the fact that Gilead can sell its product for $900 and still make a profit, will likely fuel critics of the company.
In January, Bloomberg obtained emails that show how Gilead executives priced their blockbuster hepatitis C 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.” 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.
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.” 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.
In January, Massachusetts Attorney General Maura Healey threatened Gilead with a lawsuit over the pricing of the two hep C treatments. In a letter submitted to Gilead by Healey and obtained by the Boston Globe, Healey said the pricing of the drugs “may constitute an unfair trade practice in violation of Massachusetts law.” The letter said the attorney general’s office was looking at the possibility of bringing an unfair commercial conduct complaint against Gilead, the Globe reported.
On Feb. 2, Gilead reported 2015 revenue of $32.6 billion, a big increase from 2014 revenue of $24.9 billion. Gilead’s product sales during 2015 were $32.2 billion compared to $24.5 billion in 2014, primarily due to sales of Harvoni which was launched in October 2014, partially offset by a decrease in sales of Sovaldi, the company said in a statement.
