(Adds response from Gilead Sciences in paragraphs 8-9)
May 20 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
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
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
"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
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)