Federal Lawmakers Ask Gilead to Explain High Cost of Hepatitis C Drug

July 17, 2014
Catherine Kolonko

The US Senate Finance Committee recently requested detailed pricing information on Sovaldi (sofosbuvir), its breakthrough oral treatment for hepatitis C.

Federal law makers are once again asking Gilead Sciences, the drugmaker of a pricey pill called Sovaldi (sofosbuvir), to explain why its drug to cure hepatitis C costs so much.

Two members of the US Senate Finance Committee sent a letter July 11 to Gilead CEO Dr. John Martin requesting detailed pricing information on Sovaldi (sofosbuvir), a breakthrough drug approved by the FDA late last year that is reported to cost $1,000 a pill in the US for a standard 3-month treatment.

Hepatitis C is a bloodborne virus that attacks the liver and if left untreated for a long time can lead to cirrhosis, liver cancer, or the need for a liver transplant. Health officials estimate that at least 3 million people in the nation and some 15 million worldwide have the virus, but many may not know it because they are asymptomatic.

Sovaldi leads the pack of new hepatitis C drugs that have a higher cure rate with less severe side effects than older traditional treatments. The FDA has approved four new drugs to treat hepatitis C since 2011 and more are in the development pipeline or under regulatory review.

The standard 12-week course for a patient taking a daily dose of Sovaldi reportedly adds up to $84,000 in the US market and the cost could nearly double for some patients who need longer therapy to clear the virus.

“Given the impact Solvaldi’s cost will have on Medicare, Medicaid, and other federal spending, we need a better understanding of how your company arrived at the price for this drug,” states the letter from Sen. Ron Wyden, the finance committee chairman, and Sen. Charles Grassley, also on the committee.

In 2012, Gilead acquired Sovaldi with the $11.2 billion purchase of Pharmasset Inc., the original developer, which expected to profitably sell the drug at a much lower price of $36,000, states the letter citing documents from the Securities and Exchange Commission.

The letter from the committee includes a series of detailed questions and asks for documentation such as a financial analysis, prospective commercialization forecasts from Pharmasset, and a copy of the fairness opinion prepared by Morgan Stanley in conjunction with Gilead’s final offering price.

“The senators are seeking information to explain the difference between that price and the drug’s current price, as well as the difference between what American consumers and overseas buyers are paying for Sovaldi; research and development costs; marketing and advertising costs; and potential conflicts of interest with professional societies that recommended the drug,” states a release announcing the committee request.

Earlier this year, Congressman Henry Waxman of the US House of Representatives also sent a letter to Gilead executives seeking justification for what the company charges US consumers for a drug that is reportedly set to be discounted in other countries where drug prices are regulated. Around the same time, criticism surfaced from a panel of independent medical experts in California who deemed Sovaldi a “low value treatment” because of its high cost.

Efforts to reach Gilead for comment were unsuccessful, but spokesman Ken Willis of Wyden’s office said that the company is expected to comply with the Senate committee’s request for information within 60 days of the letter.