April 2, 2014
This article was reported by Reuters.
Reuters reported that US lawmakers, health insurers, and state Medicaid programs were pushing Gilead Sciences, Inc., to discount the $1,000 per pill price of the new hepatitis C drug Sovaldi. At list price, a complete 12-week regimen of Sovaldi would cost $84,000 per patient. Although the drug has proven to cut treatment time and improve cure rates with fewer side effects, millions of hepatitis C-infected Americans could not afford Sovaldi's cost.
Gregg Alton, Gilead's executive vice president for corporate and medical affairs, acknowledged that Gilead had agreements with US government health plans to discount the price by 23 percent, with an additional discount for Veterans Administration (VA) and Department of Defense patients. VA patients accounted for approximately 10-15 percent of the 3.2 million hepatitis C-infected people in the United States, and Medicaid patients accounted for another 10-15 percent. Alton stated that Gilead also had an arrangement with Kaiser Permanente, which had acted early to secure the discount for its patients. Because most Kaiser patients stayed with the company for many years, the health maintenance organization's upfront investment in treating hepatitis C patients with Sovaldi would result in lower costs years later. Other insurers could not count on similar client loyalty.
Although the cost of treating every hepatitis C-infected patient in the United States with Sovaldi would be $269 billion, many people are not aware they have the virus. Alton believed a deluge of patients seeking Sovaldi would not materialize. An ISI Group analyst reported that new Sovaldi prescriptions had dropped 5 percent in the last week, and Gilead's stock prices dropped 9 percent in the last week in reaction to pricing concerns. Even if the number of prescriptions for Sovaldi did not increase, Gilead could expect sales of more than $9 billion.