A Senate panel on Wednesday examined exorbitant prices charged by drugmakers for new treatments for hepatitis C, a liver disease that claims about 15,000 lives a year in the United States. Gilead, the leading manufacturer of the drugs, refused to testify at the hearing about the $84,000 it charges for a 12-week regimen of Sovaldi and the $94,500 price tag for a newer drug, Harvoni. The price per pill is about $1,000 for Sovaldi $1,125 for Harvoni.
Even with bulk-purchase discounts, the Department of Veterans Affairs spent $370 million in the past year on new treatments. Outlays are projected to soar by an additional $1.3 billion for the next two years.
“What we are looking at is a very excessive profit,” said Sen. Bernie Sanders (I-Vt.), chairman of the Senate Committee on Veterans’ Affairs. He called it “deplorable” and a “moral issue” that the life-saving drug may have to be rationed because the price makes it unaffordable for all who need it.
The treatment cost is especially significant to the VA because the disease affects veterans – particularly Vietnam-era veterans – at a rate higher than the general population. Approximately 174,000 veterans currently enrolled in VA have been diagnosed with hepatitis C.
Sovaldi is on pace to become the highest grossing drug in history. Approved by the Food and Drug Administration late in 2013, sales totaled $2.27 billion in the first quarter of 2014 and $3.48 billion in the second quarter. Gilead bought the rights to market the drug from another company, which had planned to charge less than half as much for the medication. “Did Gilead purchase the company knowing it could more than double the price and pay for its investment in one year?” asked John Rother of the National Coalition on Health Care.
Robert Weissman, president of the consumer rights group Public Citizen, testified that Gilead is making $200 million a week on Sovaldi. He said treatments are useful only if they are accessible. “We’ve now reached a point where treatments will increasingly be restricted and rationed because brand-name drug companies have used monopolies to price them out of reach.”
The introduction of the costly but effective treatments “holds the promise of eradicating this disease in infected veterans,” according to Michael Valentino, a pharmacist who is the VA’s chief Pharmacy Benefits Management consultant. But he told the committee that the cost of the new therapies “remains a major challenge.”