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Gilead Hep C Drug Pricing Put Profits Over Access

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December 2, 2015 — The Senate Finance Committee has released a report concluding that Gilead Sciences priced its hepatitis C drugs to maximize profit knowing that patient access and affordability would be compromised.

Documents indicate that Gilead considered prices ranging from $50,000 to $115,000, ultimately settling on $83,000 for Sovaldi.

This appeared to strike a balance between lost revenues and “reputational risks” at higher prices, while also setting a price floor for even more expensive drugs. Soon after Sovaldi was approved in November 2013, the price of Harvoni was set at $94,500.

The strategy appears to be working. Gilead has raked in $20.6 billion from private payers and public programs after rebates.

Unfortunately, the cost has significantly burdened government programs while curing only a tiny percentage of enrollees with hepatitis C. Last year, Medicaid spent over $1 billion on Sovaldi, but fewer than 2.4% of patients were treated.

Most people cannot afford treatment out-of-pocket, forcing them to rely on health insurance or Medicaid. However, many insurers and Medicaid programs in 27 states have restricted coverage to all but the sickest patients.

According to Senate Finance Committee Member Ron Wyden:

“Gilead pursued a calculated scheme for pricing and marketing its Hepatitis C drug based on one primary goal, maximizing revenue, regardless of the human consequences. … Gilead knew these prices would put treatment out of the reach of millions and cause extraordinary problems for Medicare and Medicaid, but still the company went ahead.”

 

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