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Policy & Politics
Lawmakers Attack Cost of New Hepatitis Drug

March 26, 2014

This article was reported by The New York Times.

The New York Times reported that three US representatives are calling for the pharmaceutical company Gilead to justify the hefty cost of its new hepatitis C drug, Sovaldi. The lawmakers, all Democrats on the House Energy and Commerce Committee, wrote an open letter to Gilead to find out why the drug, which is touted as a breakthrough in treatment for hepatitis C, is priced at $1,000 per pill. Critics argue that the high cost, which insurance companies and state Medicaid programs are not yet willing to universally cover, puts it out of reach for most Americans.

The drug company defends its pricing, arguing that it saves money in the long term. The drug, when used with one or two other medications, can cure more than 80 percent of hepatitis C infections, a far higher rate than any previous treatment. The treatment time also is a fraction of that of other medications with fewer side effects.

The letter was signed by Rep. Henry A. Waxman (D-Calif.), the ranking Democrat on the committee, Rep. Frank Pallone Jr. (D-N.J.), and Rep. Diana DeGette (D-Colo.). "Our concern is that a treatment will not cure patients if they cannot afford it," the letter read. Nervous investors prompted a fall in Gilead's stock -- as well as that of some other pharmaceutical giants -- by almost 5 percent after the release of the letter. "The fear that Congress may begin a program of meddling, one drug at a time, doesn't affect just one drug," said Andrew A. Bogan of Bogan Associates, a science and technology stock investor.

Gregg Alton, Gilead's executive vice president for corporate and medical affairs, said the company welcomes a meeting with Congress to discuss the drug's pricing. It is estimated that 3–4 million Americans have hepatitis C. With enough time, the disease can cause cirrhosis of the liver and liver cancer. Gilead also said compared to previous treatments, after the cost of long-term effects from hepatitis C are cured quickly from Sovaldi, the cost is actually cheaper.

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