Senate Report Finds Hep C Drugs Priced to Maximize Profit

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December 2, 2015 — Gilead Science’s pricing strategy for the hepatitis C drug Sovaldi focused on maximizing profits with little regard for accessibility and affordability, according to a Senate Finance Committee investigation.

The 144-page report was published after an 18-month investigation. Internal company documents show that Gilead discussed prices ranging from $50,000 to $115,000, weighing the risk of public outrage and “reputational risks” against lost revenues at a lower price.

Among those documents is a slide from July 2013 predicting that nearly 50% of insurers would restrict patient access to Sovaldi if it were priced at $90,000. Even so, Gilead settled on $83,000 for a 12-week course of Sovaldi and $94,500 for Harvoni.

Sovaldi was approved in December 2013. Almost immediately, insurers restricted coverage to all but the sickest patients. Medicaid programs in 27 states also limited which patients could get Sovaldi.

Despite significant access restrictions, Gilead refused to lower the price. Thee company has raked in a total of $20.6 billion after rebates from public programs and private payers.

The high cost has fallen on taxpayers and significantly strained government programs. In 2014, Medicaid spent more than $1 billion on Sovaldi and treated less than 2.4% of enrolled patients with hepatitis C.

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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