U.S. drug prices are out of control and unsustainable. We’re the only developed country where public programs cannot negotiate drug prices with pharmaceutical manufacturers; as a result, the U.S. generally pays more for branded prescription drugs than any other country. In 2014, we spent a stunning $3 trillion on healthcare — almost $10,000 ($9,523) per person. Although this partly stems from expanding insurance coverage through the Affordable Care Act, a large contributor was prescription drug spending, which increased by more than 12% to $297.7 billion.¹

Drugs to treat Hepatitis C — especially Gilead’s Sovaldi (sofosbuvir) — accounted for an astounding one-third ($11.3 billion) of increased prescription drug spending in 2014. In 2011, Gilead acquired PharmAsset, sofosbuvir’s developer, in a multibillion-dollar acquisition, then set the price at an eye-popping $1,000 per pill ($84,000—$168,000 per treatment course). Sovaldi’s much cheaper elsewhere: Egypt, for example, pays $908 per treatment course.²

Despite a tsunami of outrage, Gilead remained steadfast in its greed. According to a recent Senate Committee on Finance investigation, an internal email from Gilead's Executive Vice President for commercial operations stated: “Let's not fold to advocacy pressure…Let’s hold our position whatever competitors do or whatever the headlines."^3,4

In 2014, Medicare and Medicaid spent about $5 billion just on Sovaldi, and the drug was the 1^st- or 2^nd-most costly pharmaceutical outlay by 29 states.⁵ Many of those states and private insurers have restricted Sovaldi’s use to the sickest patients. In response, Gilead offered a measly 10% rebate, often with the condition that access restrictions be lifted. This creates an impossible situation for payers, which cannot afford to treat every Hep-C-positive patient.

Competition has entered the market in the form of AbbVie’s Viekira Pak, which is only slightly less expensive. But AbbVie’s willing to negotiate discounts with payers, which has reduced Gilead’s resistance to negotiations.⁶ Meanwhile, Gilead introduced Harvoni, which costs $94,500 for a 12-week course.

Are these expensive drugs even necessary? Although useful for some, Sovaldi and its relatives have been overhyped. Hep-C, spread via blood transfusions and intravenous drug use, affects 1-2% of the U.S. population. About 25% of these people will clear the active infection on their own, without medication. For others, Hep-C infection progresses over decades, and can lead to cirrhosis, liver failure, liver cancer, and death. Progression is generally slow, however, and varies significantly by individual. About 75-85% percent develop a chronic infection; of those, 60-70% develop chronic liver disease, and 1-5% die of cirrhosis or liver cancer.⁷ Not every treatment with Sovaldi averts a liver transplant — although that’s what Gilead wants us to believe!

Lost in the media coverage is the fact that, before Sovaldi, we treated Hep-C with other drugs, some of which have a 40-80% success rate, depending on disease stage, therapy adherence, and comorbidities. That’s a good success rate!

Yet, in 2013, the Food and Drug Administration (FDA) approved Sovaldi and other outrageously priced products under an expedited process for “breakthrough” drugs, which sets a lower standard for success than previously required. The new drugs have fewer side effects and better short-term success rates than older drugs, but Sovaldi’s superiority may not reflect real-world results. Most Sovaldi studies were industry-funded, and, astoundingly, although several studies stated they’d include testing for residual Hepatitis C virus 24 weeks after treatment was completed, this crucial information was absent in all published reports.⁸

That’s problematic, because “there is evidence that relapse rates after Sovaldi treatment may be substantial, ranging from 5-28% even among patients who are fully treated with these regimens.”⁹ An additional report notes it is unclear how well short-term clearance of Hepatitis C virus predicts long-term outcomes.¹⁰ So, although the newer drugs have been feted as “cures,” they may not be after all. Also, few clinical trials have compared the effectiveness of different regimens.

To sell Sovaldi, Gilead trained 293 health care professionals, mainly physicians, in 46 states to promote the company’s Hepatitis C drugs to clinicians. The speakers were paid an average of $1,379 per talk. In 2014, this equaled $2.1 million in promotional speaking fees for Harvoni and $2.9 million for Sovaldi.¹¹

Then, to get consumers to demand Sovaldi, Gilead set up a “disease awareness” campaign, including a hotline and website. The campaign provides information about Hep-C and Gilead’s Hep-C drugs, and makes referrals to Gilead’s ‘‘Support Path’’ program. The program helps patients ‘‘get started on therapy and move toward treatment completion,’’ provides financial assistance for drug purchases, and offers pre-prepared ‘‘letters of medical necessity’’ for health care providers to send to insurers, pressuring them to cover Gilead’s treatments.

But, have we been duped by Gilead? The real clinical trial of Sovaldi is going on right now, at taxpayer expense. It will take years to know if Sovaldi’s effects are lasting — or if many patients just relapse.

Although Sovaldi’s and Harvoni’s pricing is carefully constructed highway robbery, it’s only the most recent outrageous example of Americans being strong-armed by Big Pharma. Many drugs that are under development now — especially cancer and chronic disease drugs — are projected to cost as much, or more, than these Hep-C drugs. We need a radical legislative shift that allows the Federal government to negotiate drug prices, and we need it fast.

---

References:

1. Johnson C, “Obamacare and drug prices push health spending to $3 trillion,” Washington Post blog, December 2, 2015. Available online at: https://www.washingtonpost.com/news/wonk/wp/2015/12/02/obamacare-and-drug-prices-push-health-spending-to-3-trillion/?postshare=3921449154689072&tid=ss_tw.

2. U.S. Senate Committee on Finance, “Press Release: Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis Drug.” Washington, DC: US Senate, December 1, 2015. Executive Summary and full report available online at http://www.finance.senate.gov/newsroom/ranking/release/?id=3f693c73-0fc2-4a4c-ba92-562723ba5255.

3. U.S. Senate Committee on Finance, “Press Release: Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis Drug.” Washington, DC: US Senate, December 1, 2015. Executive Summary and full report available online at http://www.finance.senate.gov/newsroom/ranking/release/?id=3f693c73-0fc2-4a4c-ba92-562723ba5255.

4. Johnson C, Brady D, “How an $84,000 drug got its price: ‘Let’s hold our position…whatever the headlines.’” Washington Post blog, December 1, 2015. Available online at at: https://www.washingtonpost.com/news/wonk/wp/2015/12/01/how-an-84000-drug-got-its-price-lets-hold-our-position-whatever-the-headlines.

5. U.S. Senate Committee on Finance, “Press Release: Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis Drug.” Washington, DC: US Senate, December 1, 2015. Executive Summary and full report available online at: http://www.finance.senate.gov/newsroom/ranking/release/?id=3f693c73-0fc2-4a4c-ba92-562723ba5255.

6. U.S. Senate Committee on Finance, “Press Release: Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis Drug.” Washington, DC: US Senate, December 1, 2015. Executive Summary and full report available online at: http://www.finance.senate.gov/newsroom/ranking/release/?id=3f693c73-0fc2-4a4c-ba92-562723ba5255.

7. Center for Evidence-based Policy, Sofosbuvir for the Treatment of Hepatitis C and Evaluation of the 2014 American Association for the Study of Liver Diseases Treatment Guidelines, Portland (OR): Oregon Health Science University, May 2014. Available online at: https://www.ohsu.edu/xd/research/centers-institutes/evidence-based-policy-center/evidence/med/upload/Sofosbuvir_for_HepatitisC_FINALDRAFT_6_12_2014.pdf.

8. Center for Evidence-based Policy, Sofosbuvir for the Treatment of Hepatitis C and Evaluation of the 2014 American Association for the Study of Liver Diseases Treatment Guidelines, Portland (OR): Oregon Health Science University, May 2014. Available online at: https://www.ohsu.edu/xd/research/centers-institutes/evidence-based-policy-center/evidence/med/upload/Sofosbuvir_for_HepatitisC_FINALDRAFT_6_12_2014.pdf.

9. Center for Evidence-based Policy, Sofosbuvir for the Treatment of Hepatitis C and Evaluation of the 2014 American Association for the Study of Liver Diseases Treatment Guidelines, Portland (OR): Oregon Health Science University, May 2014. Available online at: https://www.ohsu.edu/xd/research/centers-institutes/evidence-based-policy-center/evidence/med/upload/Sofosbuvir_for_HepatitisC_FINALDRAFT_6_12_2014.pdf.

10. Drug Effectiveness Review Project (DERP), Drug Class Review: Comparative Effectiveness of Direct-Acting Antiviral Agents for Hepatitis C Infection (Final Original Report), Portland (OR): Oregon Health Science University, February 2015. Available online at: http://healthandwelfare.idaho.gov/Portals/0/Medical/PrescriptionDrugs/HepatitisCFinalReportFebruary2015.pdf.

11. Johnson C, Brady D, “How an $84,000 drug got its price: ‘Let’s hold our position… whatever the headlines,’” Washington Post blog, December 1, 2015. Available online at: https://www.washingtonpost.com/news/wonk/wp/2015/12/01/how-an-84000-drug-got-its-price-lets-hold-our-position-whatever-the-headlines.