Report: Gilead Prioritized Profits Over Patient Access to Hep C Drug

Gilead Sciences prioritized maximizing its revenue over ensuring patient access when pricing its breakthrough hepatitis C treatment, Sovaldi, according to a Senate Finance Committee report released Tuesday, the AP/San Francisco Chronicle reports (AP/San Francisco Chronicle, 12/1).

Background

Gilead's Sovaldi was approved by FDA in December 2013 and was praised as a breakthrough treatment for hepatitis C. However, Sovaldi has come under major scrutiny for its price: $1,000 per pill or about $84,000 for full treatment course (Gorn, California Healthline, 5/8/14).

In 2014, Gilead received FDA approval for Harvoni, a first-of-its-kind hepatitis C treatment that requires patients to take just one pill daily. The drug costs $94,500 per patient for a 12-week treatment.

Both treatments have high cure rates but have received criticism for their high costs (California Healthline, 11/16).

Report Details

For the report, the Senate Finance Committee examined about 20,000 pages of internal Gilead documents as well as data from state Medicaid programs to determine how the drugmaker priced the hepatitis C treatments. The 18-month-long investigation largely focused on Sovaldi but also scrutinized Harvoni (Loftus, Wall Street Journal, 12/1).

Report Findings

According to the report, Gilead priced Sovaldi to maximize the company's revenue rather than to recoup research and development costs.

During a press conference announcing the report's findings, Sen. Ron Wyden (D-Ore.) said, "The evidence shows that the company pursued a calculated scheme for pricing and marketing its hepatitis C drug based on one goal: maximizing revenue regardless of the human consequences" (Sullivan, The Hill, 12/1).

For example, the investigation found that Gilead was aware that the drug's price would be too high for some patients and cause "extraordinary problems" for government health programs. In an internal Gilead presentation cited in the report, the company before Sovaldi's release projected that:

47% of insurers and other payers likely would restrict access to the drug if it were priced at $90,000;
Some physicians and patient-advocacy groups would denounce the drug if it were priced at about $80,000; and
24% of insurers and other payers likely would restrict access to the drug if it were priced at $75,000.

Further, Kevin Young, executive vice president of commercial operations at Gilead, in a November 2013 email obtained by the committee said, "Let's not fold to advocacy pressure in 2014. Let's hold our position whatever competitors do or whatever the headlines."

In addition, the investigation found that Gilead priced Sovaldi to set a benchmark that would "raise the price floor" for future hepatitis C drugs, such as Harvoni (Wall Street Journal, 12/1).

The investigation also found that fewer than 3% of eligible Medicaid beneficiaries received the treatment last year because of the drug's high price. According to the report, Gilead offered state Medicaid programs small supplemental discounts for the drug, which only would have been applied if the states dropped patient access restrictions to Sovaldi. However, at least 27 state Medicaid programs have restricted access to the drug (AP/San Francisco Chronicle, 12/1).

The report noted that Sovaldi's price has since been lowered because of competition from other drugmakers. However, Sen. Chuck Grassley (R-Iowa) and Wyden said other costly drugs are still in production.

Grassley said he hopes the investigation facilitates "discussion" about costly prescription drugs (The Hill, 12/1).

Gilead's Response

Gilead said it disagreed with the report's findings, arguing that it "responsibly and thoughtfully priced Sovaldi and Harvoni" (Wall Street Journal, 12/1).

Gilead said, "We stand behind the pricing of our therapies because of the benefit they bring to patients and the significant value they represent to payers, providers, and our entire health care system by reducing the long-term costs associated with managing chronic HCV."

The company also noted that:

Discounts and rebates are available for the drugs (The Hill, 12/1);
Financial assistance is available to help uninsured individuals access the treatments (Wall Street Journal, 12/1); and
More than 600,000 patients worldwide have been treated since Sovaldi was introduced (AP/San Francisco Chronicle, 12/1).

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