UPDATE 1-U.S. senators ask Gilead to explain cost of Sovaldi hepatitis drug

Fri Jul 11, 2014 11:15am EDT

(Adds background on Sovaldi, rival drugs)

By Ransdell Pierson

July 11 (Reuters) - Two members of the U.S. Senate Finance Committee, including Chairman Ron Wyden, on Friday asked Gilead Sciences Inc to defend the more than $80,000 cost of its breakthrough treatment for hepatitis C, citing the expense to federal healthcare programs.

"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 said in a release. "It is unclear how Gilead set the price for Sovaldi."

Sovaldi's cost can soar to $168,000 in patients that need longer treatment periods, not including the costs of other drugs used with it, the senators said.

Gilead acquired Sovaldi (sufosbuvir) in 2012 by paying more than $11 billion for Pharmasset Inc. The deal began to bear fruit after Sovaldi produced stellar results in late-stage clinical trials and was approved by U.S. regulators late last year.

The nucleotide analog inhibitor, or "nuke," blocks a protein needed by the hepatitis C virus to replicate. Other companies, including Merck & Co, are developing their own nukes and other new types of hepatitis C treatments.

The criticism from the two senators follows complaints from private healthcare insurers about the price of the most potent new treatment for the dangerous liver disease, which affects more than 3 million Americans.

Gilead's pill, which cures patients more quickly than older drugs, and with fewer side effects, captured $2.3 billion in sales during its first full quarter on the market, a record for the drug industry.

The drugmaker has defended the price, saying Sovaldi reduces overall treatment costs for hepatitis C by lowering the number of required healthcare visits and sidestepping the need for other medicines that treat side effects of older therapies.

Wyden, an Oregon Democrat, and committee member Chuck Grassley, a Republican from Iowa, said in a letter to Gilead Chief Executive Officer John Martin that Sovaldi's price could also dramatically increase the cost of caring for an estimated 1.8 million prisoners infected with the hepatitis C virus.

The senators said Pharmasset, before being acquired by Gilead, had expected to profitably sell the drug in the United States for $36,000, according to Securities and Exchange Commission documents. (Reporting by Ransdell Pierson in New York; Editing by Lisa Von Ahn)