What, You Mean $1000.00 a Pill is too Expensive?

A few months back, I wrote of push-back from an NGO about the price of Gilead Sciences’ Hepatitis C drug Sovaldi.

Well the World Health Organization and the pharmacy benefits management company Express Scripts are pushing back as well.

While the WHO is engaging in fairly typical hand wringing:

Gilead Sciences' new hepatitis C drug, Sovaldi, will cost $84,000 for a 12-week treatment plan, rounding out to $1,000 a day. Bound to cause a whirlwind among investors and the healthcare world, the World Health Organization has stepped in.

The drug is facing protests in the United States because of the excessively high price that Gilead Sciences set for their new product. Despite its potential effectiveness - it is projected to cure 90% of the targeting hepatitis C patients - its gross income will exceed that of every other pharmaceutical drug if a majority of 150 million hepatitis C patients purchase it.

As a result, the World Health Organization is urging Gilead Sciences to make the drug cheaper and more accessible to help those in dire need of the medication and to avoid creating tremendous problems for insurance companies and investors. But pharmaceutical companies argue that they need to charge high prices on new effective drugs because they need to cover the expensive cost of development.

Express Scripts is playing some serious, and very well deserved, hardball:

Express Scripts Holding Co. (ESRX), a pharmacy benefit manager that handles more than 1 billion prescriptions annually in the U.S., is ratcheting up its effort to force Gilead Sciences Inc. (GILD) to cut the $84,000 price of its new hepatitis C pill Sovaldi.

Express Scripts plans to ask its clients, composed of national employers, health insurance plans and government agencies, to join a coalition that would stop using Sovaldi once a rival medicine is approved for the U.S., expected next year, said Steven Miller, chief medical officer of the St. Louis-based company. Express Scripts said in December it may block reimbursement for Foster City, California-based Gilead’s pill once other new hepatitis C therapies are on the market.

“What they have done with this particular drug will break the country,” Miller said in a telephone interview. “It will make pharmacy benefits no longer sustainable. Companies just aren’t going to be able to handle paying for this drug.”

Cara Miller and Amy Flood, Gilead spokeswomen, didn’t return phone calls yesterday seeking comment. The company has previously justified the price for Sovaldi by saying it would pay for itself by avoiding future complications from the virus.

(emphasis mine)

Note that Sovaldi has been granted a breakthrough designation by the FDA, which allows the drug to hit the market faster, for which the US government, and the taxpayers got a consideration of ……… nothing at all.

Basically the declaration of "breakthrough" status, and that is the term the 2010 law uses, is a subsidy to the manufacturer, both extending the time available to Gilead under exclusivity, and reducing capital costs by allowing revenue to start earlier.

Maybe the FDA should include a "reasonable and justifiable pricing" clause to things like this.