In October U.S. Food and Drug Administration approved a new pill, Harvoni, that can cure hepatitis C, which afflicts about 170 million people worldwide and annually kills 350,000 people.
The price on the new treatment will be a hard pill to swallow for most: $94,500 for a 12-week treatment course with Harvoni, manufactured by Gilead Sciences.
Hepatitis C is a chronic blood-borne infection that attacks the liver, eventually causing cirrhosis or liver cancer and leading to death if not treated. The US Centers of Disease Control and Prevention believes 3.2 million people in the United States could be infected.
Patients who receive these treatments almost never see the total cost, but their insurers do. More than two dozen state Medicaid programs for low-income patients, as well as for-profit insurers, have restricted coverage for the treatment to only those with severe liver damage. While researching the subject for this blog post, we found such distressing – and sadly accurate – soundbites as “The $84,000 Cure – Cheaper than a Liver Transplant.” Last July two members of the Senate Finance Committee, including Ron Wyden, Committee Chair, Democrat from Oregon, asked the manufacturer to defend the cost. They are not alone.
“Never before have drugs been priced so high to treat such a large population,” says Steve Miller, chief medical officer at Express Scripts, the country’s largest manager of drug benefits for employers and insurers. In December, Express Scripts announced it would reject coverage for one-pill-a-day Harvoni and instead steer patients to a less pricey rival drug that requires four to six pills a day.
Just how profitable are drugs like Harvoni and Sovaldi, a Hepatitis C medication released last year? In 2014 Sovaldi, also manufactured by Gilead, generated $10.3 billion in sales, making it one of the most lucrative pharmaceutical launches ever. Harvoni sales totaled more than $2.1 billion in the last 3 months of the year. Gilead’s market capitalization has soared from $29 billion to $167 billion in five years. The net worth of its chief executive officer, John Martin, exceeds $1 billion. “For a long time we’ve had innovation after innovation,” Martin noted. For many patients, Gilead’s drugs are indeed miraculous. But is the U.S. health-care system paying too much for them? And with 170 million carriers worldwide, what will the impact of this transmittable disease be on governments and citizens with much less spending power?