U.S. health insurers say Gilead hepatitis C drug too costly

Tue May 20, 2014 7:47pm EDT

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(Reuters) - The leading U.S. health insurance trade group on Tuesday hit out at the extremely high cost of new specialty medicines, accusing drugmakers of taking advantage of the insurance system by pricing products at unsustainable levels.

The latest salvo in the war on escalating U.S. healthcare costs came from AHIP - America's Health Insurance Plans - and targeted Sovaldi, the new $84,000 hepatitis C treatment from Gilead Sciences Inc.

"Sovaldi has shown tremendous results, and it's the kind of medical innovation we need to sustain. Unfortunately, the drug's maker has priced it at an astronomical level that is not sustainable for consumers, innovation, or society," AHIP said on its Coverage blog.

Sovaldi is the first in a new wave of all-oral treatments for the liver disease that has been a tremendous advance over prior treatments. The new drug has demonstrated an ability to cure well over 90 percent of patients in just 12 weeks or less with few side effects.

Prior to the Sovaldi approval, hepatitis C treatments took 24 or 48 weeks, cured about 75 percent of patients and involved many more pills as well as injectable interferon that causes flu-like symptoms and other side effects that led many people to avoid or discontinue treatment.

But concern that hundreds of thousands of patients will seek treatment with the Gilead drug that costs roughly $1,000 per pill has provided a rallying point for insurers and others seeking to rein in the skyrocketing cost of new medicines in the United States, which has no price controls on drugs, unlike Europe and other countries.

In its first full quarter on the market, Sovaldi had more than $2 billion in sales, shattering previous pharmaceutical records.

Cara Miller, a spokeswoman for Gilead, defended the drug's pricing in an emailed statement: "While Sovaldi greatly enhances the standard of care for hepatitis C, it was priced such that the total regimen cost is equal to that of prior standard of care regimens.  

"Sovaldi reduces total treatment costs for HCV – taking into account the cost of medications (including those for side effects or complications) and healthcare visits – and it represents a finite cure, an important point to consider when comparing the price of a pill or bottle to the lifetime costs of treating a chronic disease."

The campaign against Gilead may also be an effort to pressure other drugmakers, such as Merck & Co, AbbVie and Bristol-Myers Squibb Co, before they set prices for their hepatitis C drugs that are expected to gain regulatory approval in the next year or two.

AHIP said promising new drugs are being priced in a way that threatens Americans' access to them. "We need to find a solution that ensures important drugs like Sovaldi are priced at sustainable levels so that we can foster even more life-saving innovation."

John Castellani, chief executive of PhRMA, the leading pharmaceutical industry trade group, said the problem is an insurance system that pushes too much of the cost of treatment onto the patient with high co-pays and deductibles for drugs.

"The insurance model makes medicine seem like the most expensive part of the healthcare system," Castellani said.

(Reporting by Bill Berkrot and Caroline Humor; Additional reporting by Ken Wills; Editing by Ken Wills)

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Comments (3)
BabylonSlim wrote:
A Pox upon the thieving scum! I hope all the Pharma executives get stomach cancer.
I have this virus, have tried interferon (which made me so ill the witch doctors took me off it) and even now am told I now have 4th stage Cirrhosis. I have been following the trials and research of this drug and others. I was so looking forward to a cure. I wonder if Blue Cross (who I have been paying over $500 a month for over 5 years) is going to pay for Sovaldi? I wonder if Europe is going through this? I wonder how many Right-Wing Fascists own Gilliad shares? I wonder what acts of senseless violence will be committed by people like me? Most of you think that you are safe. Ha!

– Bitter

May 22, 2014 11:32pm EDT  --  Report as abuse
HCV3FORME wrote:
Babylon Slim, Hello I got Sovaldi by contacting Gileads support path, my insurance denied it but gileads support path got it to me right away for a $5 copay. It is working at 30 days in virus almost undetectable liver function normal, Try contacting Gilead support directly get approval then insurance who will deny but you will have covered your bases, Good luck and please be smart and pursue all your options without violence HCV has made me into a negative person but now I am starting to have moments when the brain fog goes away and I feel my old personality awaken it’s startling and I don’t know or care if it’s normal, the interferon poising 10+yrs ago ruined my personality started the brain injury/fog

May 23, 2014 8:45am EDT  --  Report as abuse
HCV3FORME wrote:
This story is good the links to insurance companies market standings everything is available to tell it,Reader comments????

May 23, 2014 9:15am EDT  --  Report as abuse
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