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Senate exposes tactics in hepatitis drug pricing

December 2, 2015
by Julie Miller, Editor in Chief
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The Senate Finance Committee released the results of an 18-month investigation into the high price of hepatitis C drug Sovaldi (sofosbuvir) and its second-wave successor, Harvoni (ledipasvir and sofosbuvir). According to the report, pharmaceutical company Gilead Sciences pursued a marketing and pricing strategy meant to maximize revenue while many patients and public programs were unable to afford the treatments.

People with substance use disorders are in a high-risk category for hepatitis C, with those who have used injectable substances for one year or more screening positive for the liver disease in 70 to 90 percent of cases.

Sovaldi carries a price tag of $84,000 for a single course of treatment, and Harvoni was later introduced at $94,500. Access for patients with hepatitis C was not a consideration in the process of setting the wholesale prices, according to committee ranking member Ron Wyden (D-Ore.) and senior committee member Chuck Grassley (R-Iowa). The investigation included reviews of Gilead's internal communications.

Unaffordable cures

The senators said emphatically that profit was the key motivation, and Gilead refused to offer substantial discounts to improve patient access.

“America needs cures for cancer, Alzheimer’s, diabetes and HIV,” Wyden said in a statement. “If those cures are unaffordable and out of reach to millions who need them, Congress will not have met its responsibilities to the American people.”

Medicaid programs in particular are struggling to allocate healthcare dollars to the drugs. In 2014, just 2.5 percent of Medicaid patients with hepatitis C were able to access the treatment.

According to the Oregon Health Authority, if the state treated just half of the people in its Medicaid system who need the drugs, it would need to double its pharmaceutical spending. Pennsylvania’s Medicaid agency similarly noted it would need to spend as much as $3 billion to provide the drug to its beneficiaries with hepatitis C.

In 2014 alone, Medicare and Medicaid combined to spend more than $5 billion on Sovaldi and Harvoni. That total is projected to climb in 2015. Meanwhile, Gilead’s U.S. sales of the two drugs totaled $20.6 billion over 21 months.