Senate Probe Slams Drug Maker for Jacking Up Price of Hepatitis C Pill

Legislators focus on the pricing of sofosbuvir and Harvoni.

A US Senate investigation found that drug maker Gilead Sciences sought to maximize profits of its blockbuster hepatitis C drug, without any significant consideration of the thousands of patients who could not afford its pricey pill.

Results of a bipartisan 18-month investigation into the pricing of Gilead’s drug was released during a press conference Tuesday held by Senators Ron Wyden (D-OR), and Chuck Grassley, (R-IA), members of the Senate Finance Committee. The probe centered on the pricing of the hepatitis C drug sofosbuvir, marketed by Gilead as Sovaldi, and its successor Harvoni.

Both Sovaldi and Harvoni are among a group of new antiviral drugs that have demonstrated high cure rates for the treatment of hepatitis C, a bloodborne virus that can cause serious liver damage if left unchecked. Both drugs cost upwards of $84,000 for a full course treatment for one patient.

“Let me start with my bottom line,” Sen. Wyden said in a prepared statement. “Using Gilead’s own documents, the evidence shows the company 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 officials reportedly issued a brief statement with a message that the company disagreed with the Senate investigation findings. Senators and staff members involved in the investigation looked at 20,000 pages of Gilead documents and interviewed dozens of health care experts, according to a Senate press release summarizing the probe. They also collected data from Medicare, the Bureau of Prisons and all Medicaid programs.

The report states that Gilead set a high price for Sovaldi in order to ensure a future high price for Harvoni, another of its hepatitis C drugs. By elevating the price of a new standard of care set by Sovaldi, Gilead intended to raise the price for all future new hepatitis C drugs, the investigation found.

In a sometimes scathing account of Gilead’s marketing strategy, Sen Wyden noted that the company “didn’t budge” even when the high price of Sovaldi led to a public outcry. In prepared comments for the press conference, the senator called attention to an email from a senior Gilead official sent to company colleagues just days before the drug launch.

“Let’s not fold to advocacy pressure in 2014,” wrote the official. “Let’s hold our position whatever competitors do or whatever the headlines.”

Sovaldi received regulatory approval in 2013 but its high price tag quickly hindered patient access because public and private insurers began adopting substantial restrictions that often approved payment for treatment of only the sickest of patients with hepatitis C, states a finance committee executive summary.

In response “...Gilead offered supplemental rebates and discounts of minimal value (on the order of 10% if all access restrictions were lifted for Medicaid, for example, which would have resulted in challenging budget choices for many states). Only a handful of payers accepted these additional reductions” states the summary. “When payers sought additional discounts from the company, Gilead rejected them.”

The high cost of Sovaldi created a significant financial burden for public health systems such as Medicare, Medicaid and the Bureau of Prisons.

Medicaid, alone, spent $1.3 billion through state programs in 2014 to pay for Sovaldi, which nevertheless amounted to only 2.4 percent of the roughly 700,000 people enrolled in the program who have the hepatitis C virus, according to the report. Medicare paid out nearly $8.2 billion on Sovaldi and Harvoni before program rebates during the 18 months after Sovaldi hit the shelf.

The senators say they worry that what happened with Sovaldi could be a glimpse of where the future cost of medicine is headed. If cures for any of America’s many serious diseases “are unaffordable and out of reach to millions who need them, the Congress will not have met its responsibilities to the American people,” commented Sen. Wyden.