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 Gregg Alton, Gilead's executive vice president of corporate and
medical affairs, declined to give an exact price for the new
medicine, the first all-oral treatment for the virus which is
expected to launch next month.
The total cost of the current treatment is $95,000, which includes
Sovaldi and two older medicines, ribavirin and interferon, according
to Gilead. The price of the new drug would be based on that cost,
Alton said in an interview.
"We are going to price this fixed-dose regimen based on those
costs," Alton said. "We do plan on launching a better product
without having a significant premium."
Health insurers, U.S. state authorities and congressional lawmakers
have pleaded with Gilead to offer a greater discount for Sovaldi as
the cost of treating more than 3 million U.S. patients are expected
to reach hundreds of billions of dollars.
The drugmaker is expected to rake in nearly $12 billion in hepatitis
C drug sales worldwide in 2014. Sovaldi sales have been
unprecedented for any drug in its first year on the market.
"The blank check mindset we've seen from Gilead is a threat to our
entire health care system, and we hope they will pursue more
sustainable pricing in the future," said Brendan Buck, a spokesman
for the insurance industry's largest lobbying group, America's
Health Insurance Plans.
Gilead expects savings for some patients in its pricing scheme. It
said that nearly half of hepatitis C patients - previously
untreated, healthier individuals - can be cured after eight weeks of
using the new pill, compared with 12 weeks for the current Sovaldi
regimen. That would effectively cut the treatment cost by one-third
for such patients.
U.S. health regulators are due to decide by Oct. 10 whether to
approve the new drug, a pill that combines Sovaldi with the
experimental therapy ledipasvir and eliminates the need for other
treatments. It has been shown to cure up to 99 percent of patients
versus 90 percent for Sovaldi plus ribavirin and interferon, which
also cause hard-to-tolerate side effects.
LOWER AVERAGE COST?
But the fact that a shorter treatment time for some will equate to a
lower drug price may disappoint some investors. ISI Group analyst
Mark Schoenebaum on Friday lowered his average price estimate per
patient to $85,000 from $100,000 to account for it.
RBC Capital Markets analyst Michael Yee estimates that the new
Gilead drug will be priced at $95,000 for 12 weeks, while Sanford
Bernstein's Geoff Porges anticipated a list price of $100,000.
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Alton noted that the new drug will be priced below the current cost
of Sovaldi plus Olysio, a daily protease inhibitor sold by Johnson &
Johnson. Although it is not FDA-approved, some doctors have been
prescribing Sovaldi in combination with Olysio, costing up to
$150,000.
But J. Mario Molina, chief executive officer at insurer Molina
Healthcare Inc, says the drug should cost no more than $45,000 per
patient, based on his estimate of how many patients it may save from
severe liver disease.
"Yes, it will save lives and prevent people from having a liver
transplant, but not very many," Molina said. "If I said, you give me
$9 million and I will give you $4 million or $5 million back, would
you do that? That's what Gilead is doing."
Hepatitis C kills more than 15,000 Americans each year, mostly from
illnesses such as cirrhosis and liver cancer, according to the U.S.
Centers for Disease Control and Prevention.
The often-undiagnosed virus is transmitted through contaminated
blood. While infection rates have dropped since the early 1990s -
due in part to the introduction of blood and organ screening - many
older adults remain at risk. The CDC has called for baby boomers to
be routinely tested.
Gilead estimates that around 400,000 Americans diagnosed with the
virus are currently under a doctor's care.
"We are probably looking at 150,000 being treated this year, maybe
slightly more - say 200,000 - next year," Alton said.
He estimates it will take three years to treat the diagnosed
population, including newly identified patients, and about 20 years
for hepatitis C to be eradicated.
(Reporting by Deena Beasley; Editing by Michele Gershberg and Lisa
Shumaker)
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