Hepatitis C Drug Sells at a 99% Discount in Egypt

So why don’t they sell it for that much over here?

Gilead Sciences has created a drug that can virtually eradicate hepatitis C, but it costs roughly $1000 per pill.

Hepatitis C often leads to liver failure and to the need for a liver transplant.

The name of the drug is Sovaldi, and it was federally approved in December 2013.

It has a very high success rate.   It requires just 12 weeks of treatment and has an estimated 90 percent cure rate.

Just a few years ago, success rates were 50 percent or less.  Also, the older treatments were administered intravenously, and had many more side effects. 

A problem is that Medicare and Medicaid reportedly refuse to pay for Sovaldi because it is so expensive.  These treatments and their stratospheric price tags have caused insurers to reconsider covering high-priced hepatitis.

Sovaldi costs $84,000 for a typical 12-week treatment course.

But there is another issue:  Gilead is selling the drug cheaper in other countries.  Sometimes unthinkably cheaper. 

Based on Gilead’s tiered pricing scheme, U.S. patients (and their insurers) pay the most — roughly $84,000.  By contrast, German patients will pay $66,000, and UK patients pay $57,000.

Gilead is talking to generic drug-makers in India about a licensing deal that would set the price at $2,000 per treatment course, or 2 percent of the U.S. price, for 60 low-income countries.

And Egyptian health minister Adel El-Adawi said Cairo had struck a deal with U.S.-based Gilead for their government to buy Sovaldi for $300 for a one-month box, according to a recent report on the state news agency MENA.  That would imply a cost of $900 if Sovaldi is used as part of a 12-week drug regimen.

Remember, a 12-week drug regimen in the U.S. will cost $84,000.  So, in some countries it will cost $900, but here at home it will cost $84,000.

This seems to me unthinkable.

Why don’t they sell it for $900 in the U.S.?

It’s price-gouging.

How can they do this?  The reason is patent protection.

In the U.S., if you invent a drug that doctors think is necessary, you have enormous leeway to charge whatever you want.

Insurers have to cover drugs that work well. Even big insurers have “virtually zero” ability to drive a hard bargain and drive down prices when it comes to drugs with no real equivalents.

And the biggest buyer in the drug market—the federal government—is prohibited from bargaining for lower prices for Medicare, and from refusing to pay for drugs on the basis of cost.

Of course, the company will say that the high price tag of the drug is still cheaper than the price of treatment for liver failure or cancer.  

But it isn’t by much:  in the case of liver failure or cancer, the liver-transplant treatment will cost an estimated $50,000 a year – possibly over several years.

After introducing Sovaldi, Gilead’s revenue doubled to $5 billion, beating by a wide margin the $3.98 billion Wall Street forecast.

Researchers estimate that 3 to 5 million Americans have hepatitis C, and more and more baby boomers are reaching the chronic stage.  Spending on hepatitis C drugs alone is projected to rise seven-fold from $3 billion a year in 2011 to $21 billion in 2018.

Some say the costs for Medicare or Medicaid could eventually run in the tens or hundreds of billions of dollars, though it’s not clear over what period of time.

Health-insurance premiums have jumped by 80 percent over the past decade.  How does this kind of drug pricing affect the cost of insurance?

It’s something to think about as we take our high-priced medication.

http://www.fda.gov/newsevents/newsroom/pressannouncements/ucm377888.htm

 

http://www.npr.org/blogs/health/2014/02/06/272519954/maker-of-1-000-hepatitis-c-pill-looks-to-cut-its-cost-overseas

http://www.thewire.com/national/2014/04/insurers-are-really-mad-at-sovaldi-the-1000-a-day-miracle-drug/360005/

http://www.thewire.com/politics/2014/04/gilead-made-23-billion-in-three-months-treating-1-percent-of-hepatitis-c-cases/361095/

http://www.fool.com/investing/general/2013/12/13/gilead-sciences-1000-per-day-sovaldi-pills-ready-t.aspx

http://www.reuters.com/article/2014/03/21/gilead-sovaldi-idUSL2N0MI0UP20140321

http://www.nydailynews.com/opinion/life-worth-article-1.1761457

http://finance.yahoo.com/news/gilead-offers-egypt-hepatitis-c-195626568.html – See more at:

http://www.dailytech.com/Hepatitis+C+Miracle+Drug+Will+Cost+Americans+84K+Egyptians+Only+900/article34653.htm#sthash.MmtofpPE.dpuf

http://www.npr.org/blogs/health/2014/05/12/307747798/boomers-need-pricey-hep-c-drugs-but-medicare-wont-always-pay

http://www.hepc-connection.org/

http://dailydigestnews.com/2014/05/medicare-balks-at-high-costs-for-new-hepatitis-c-drugs/

http://www.healthline.com/health-slideshow/hepatitis-c-stages-progression#1

http://www.bloomberg.com/news/2014-01-27/at-84-000-gilead-hepatitis-c-drug-sets-off-payer-revolt.html

http://www.fiercepharma.com/story/spurred-pricey-gilead-hep-c-drug-payers-cook-new-cost-control-moves/2014-01-27

http://www.newyorker.com/talk/financial/2014/04/28/140428ta_talk_surowiecki

http://www.foxbusiness.com/industries/2014/04/22/gilead-profit-triples-hepatitis-c-drug-revenue-reaches-23b/

http://www.cbsnews.com/news/with-drug-prices-doubling-are-americans-getting-bilked/