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Published On: Wed, Jul 16th, 2014

Senators question Gilead Sciences CEO about pricey Hepatitis C drug, Sovaldi

Senate Finance Committee Chairman Ron Wyden, D-Ore., and senior Finance Committee member Chuck Grassley, R-Iowa, Friday requested detailed pricing information on a costly new Hepatitis C virus (HCV) drug.

Wyden and Grassley, who have long championed transparency in health care, have asked Gilead Sciences Inc. for information about Sovaldi, a drug developed to treat and cure HCV. The drug has been hailed as breakthrough treatment for the 3.2 million Americans infected with HCV.

Image/Video Screen Shot

Image/Video Screen Shot

“Given the impact Sovaldi’s cost will have on Medicare, Medicaid and other federal spending, we need a better understanding of how your company arrived at the price for this drug,” the lawmakers wrote. “In order for a marketplace to function properly, it must be competitive, fair, and transparent. It is unclear how Gilead set the price for Sovaldi. That price appears to be higher than expected given the costs of development and production and the steep discounts offered in other countries. An efficient market needs informed consumers to keep costs down.”

Sovaldi’s cost could dramatically increase federal spending in Medicare and other programs, including health care for prisoners with HCV. According to a recent survey, over 1.8 million people with HCV are currently incarcerated. This represents nearly a third of the total cases of HCV in the U.S.

Wyden and Grassley said that while Sovaldi has the potential to help people with HCV, at $1,000 per pill, its pricing raises “serious questions about the extent to which the market for this drug is operating efficiently and rationally.”

Sovaldi’s price has been widely reported to be $84,000 for a standard treatment, but documentation from the Food and Drug Administration (FDA) shows costs could be much higher for patients needing longer treatments. The longer treatment regimen roughly doubles the cost-per-patient-per-treatment to $168,000 for Sovaldi alone, and does not include the costs of other drugs used in combination treatments. And, HCV patients with liver cancer could require even longer and more costly treatments.

The original developer of Sovaldi – Pharmasset, Inc. – which Gilead acquired in 2012 for $11.2 billion, expected to profitably sell the drug in the United States for $36,000, according to Securities and Exchange Commission (SEC) documents. The senators are seeking information to explain the difference between that price and the drug’s current price, as well as the difference between what American consumers and overseas buyers are paying for Sovaldi; research and development costs; marketing and advertising costs; and, potential conflicts of interest with professional societies that recommended the drug.

Wyden and Grassley have asked that the information be provided within 60 days.

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