After an 18-month investigation into the pricing of Harvoni, members of the U.S. Senate Committee on Finance found that Gilead Sciences chose its price with a goal of maximizing revenue as opposed to treating as many patients with hepatitis C virus infection as possible.
“Using [Gilead Sciences’] own documents, 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,” U.S. Sen. and finance committee member Ron Wyden, D-Ore., said at a press conference in December. “If Gilead’s approach is the future of how blockbuster drugs are launched in America, it is going to cost billions and billions of dollars just to treat just a fraction of the health care patients in America.”
Spearheaded by Wyden and U.S. Sen. Chuck Grassley, R-Iowa, the finance committee reviewed 20,000 pages of Gilead’s documents, collected data from Medicaid programs and bureau of prisons among all 50 states and conducted a plethora of interviews with health care experts to determine how the company came to a price for the course of treatment and how it is affecting the health care industry.
“Our investigation focused on one drug, a specialty drug. We thought it was particularly important because if America is to cure Alzheimer’s, cancer, diabetes and HIV in the days ahead, these cures must not be unaffordable and beyond the reach of millions of Americans,” Wyden said at the conference. “Cures in America must not just be for the lucky few.”
Based on its investigation, Wyden said the committee found that Gilead’s own analyses show it was fully aware that as prices increased, the number of Americans treated and cured would go down.
“The company chose to put revenue ahead of affordability, of accessibility for millions of patients,” Wyden said. “The company knew that the prices would put treatment out of reach for millions of Americans and cause extraordinary problems for Medicare and Medicaid, yet the company went ahead and charged $1,000 a pill for Sovaldi, equal to $84,000 for a standard course of treatment.”
In addition, Wyden stated that the investigation showed that Gilead used the pricing of Sovaldi (sofosbuvir) to its advantage to serve as a platform to set an even higher price for Harvoni (ledipasvir/sofosbuvir) priced at more than $94,000 for one course of treatment. “They planned it from the beginning,” Wyden said at the press conference.
In a statement given to Healio.com/Hepatology from Gilead Sciences, the company maintains it was cooperative in the investigation and disagrees with the findings.
“We believe we were cooperative and transparent in our response to U.S. Sens. Wyden’s and Grassley’s inquiry, and we provided the senators with key internal documents and information so that they could understand all relevant details related to our pricing decisions,” the statement said. “While we appreciate the Senate Finance Committee’s attention to this issue, we respectfully disagree with the conclusions of their report.”
According to Gilead, the company sought to find a price that would be accepted with as little patient restriction as possible, a fact that is shown in the findings released by the Senate. The company also stated the price it chose for Sovaldi is under the price of the existing standard of care.
“In the U.S., the products were initially priced in line with the previous standards of care,” Gilead said in the statement. “With rebates and discounts now in place, the prices today are less than the cost of prior regimens, even though our therapies have significantly higher cure rates and very few side effects.”
The company added that shorter durations of therapy have also led to reduced pricing by one-third for many patients.
Wyden stated that Gilead is merely painting an “optimistic picture” about cost, when in fact Medicare has spent more on these drugs in the beginning of 2015 than it did for all of 2014.
“Since it was approved 18 months ago, Medicare has spent nearly $8.2 billion before rebates on Sovaldi and Harvoni and (that) total continues to grow. … Medicare spent more on these drugs in the first 6 months of 2015 than they did in all of 2014. Our report shows that Medicare now spends more on hepatitis C drugs in about 3 weeks than it did in all of 2013.”
Medicare is not the only program affected by the high costs, according to Wyden. Private insurers and state Medicaid programs have been forced to restrict patient access to control such high costs.
“Despite spending more than $1 billion on hepatitis C drugs last year, state Medicaid programs nationwide treated less than 2.4% of the patients who are known to have the disease,” Wyden said.
For example, state programs in Oklahoma spent approximately $18 million in 2014 to treat 220 people with HCV and Indiana spent more than $40 million to treat 462 people, according to Wyden.
In a press release, Grassley stated that the committee has a responsibility to properly oversee programs for prescription drug coverage.
“With that responsibility, the committee should know how the costs to the public programs and private insurance companies of a single innovative drug entering the market without competition can have major effects on which patients get the new drug and when,” Grassley said in the release. “This report sheds light on one example of the pricing decisions made by one company with a new prescription medicine that entered the market without competition in high demand. … I encourage everyone to read the report for the level of detail into pricing strategy that we don’t see often.”
Additional findings from the investigation mentioned in the release include: Gilead justifying sofosbuvir’s high price point based on price-per-cure; Gilead underestimated the degree of access restrictions that it expected would result from its pricing decision; and Gilead refusing to significantly lower the net price regardless of the access restrictions.
Wyden said Gilead agreed to some discounts. However, when the Medicaid programs asked for discounts to let them cure more patients, Gilead set a pre-condition that it would only agree to give a discount of a minimal 10% if the state dropped all access restrictions and states took on back-breaking costs.
“That’s not much of a choice at all. The Medicaid programs do not have unlimited resources to pour into Gilead’s bottom line,” Wyden said.
In addition, a number of Medicaid programs informed the committee in weeks leading up to the conference that the price remains a problem when factoring in the number of people who need treatment.
“Our report estimates that at the end of 2014, more than 97% of Medicaid patients diagnosed with hepatitis C remain untreated. More than 700,000 Medicaid enrollees are waiting in line,” Wyden said. “With Medicaid and private insurers struggling to offer access, Medicare could become the backstop that absorbs huge costs of Gilead’s drugs. People with hepatitis C might go without treatment until they quality for Medicare,” which may create problems for the Medicare D program.
According to Gilead, more than 600,000 people around the world have been treated with its HCV medications since they were approved in 2013 and 2014.
“Gilead appreciates the importance of making health care accessible for all,” the statement said. “Gilead responsibly and thoughtfully priced Sovaldi and Harvoni. 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,” adding that there are multiple programs in the United States that can provide financial assistance for the therapies to uninsured people.
The press conference can be viewed here. – by Melinda Stevens