India Just Did What Millions of Americans Wish the U.S. Government Would Do
India lays down the law on drugmakers
Just last week India announced in a surprise decision from the National Pharmaceutical Pricing Authority, or NPPA, that it would be capping the price of 108 different drugs ranging from diabetes treatments to HIV therapies in order to make access to these drugs more affordable for Indian citizens. This decision follows a move last year in which India initiated price controls on more than 30% of existing medicines within the country, once again in an effort to ensure that its citizens have access to these much needed drugs.
Think about what a price cap would mean in the United States. Right now there's a huge debate over the price being charged for Gilead Sciences (NASDAQ: GILD ) revolutionary oral hepatitis C treatment, Sovaldi, which runs roughly $1,000 per day. A standard 12-week treatment is therefore going to cost the patient and insurance company a whopping $84,000.
On one hand Gilead could be viewed as justified in its superior pricing given that Sovaldi can be offered to select genotypes without the need for interferon, thus dramatically reducing the side effects associated with treatment. More importantly, Sovaldi's success rate of eliminating detectable levels of the disease after 12-weeks ranged 90% and higher in its multiple clinical studies. Yet, this is a price that's far too high for most uninsured Americans to pay and is even causing insurers to grimace in pain. Gilead has also taken substantial heat from Congress over the pricing of its drug, to the point where it's even possible that insurers could begin denying coverage to members simply because of Sovaldi's high cost. If price caps were in place within the U.S. this wouldn't even be a discussion.
The French Government Must Issue a Compulsory License for Sofosbuvir & Seek the Usage of Generics to Treat Hepatitis C
[ACT-UP Basel Press Release, Link] Act Up-Basel called the French government to learn from the current situation regarding access to new direct-acting antivirals (DAAs) molecules used in the treatment of hepatitis C (HCV), to exercise Article L613 -16 of the Code of Industrial Property on the transmission and loss of patent holder rights to issue a compulsory license [i] and make available generic versions of sofosbuvir.
Since Sofosbuvir was licensed for sell on the European market, hepatitis experts and organizations working on HCV in France are quite certain : According to their computation, access to HCV new treatments in France will only be possible through an out-of-reach spending from the national health insurance. To treat 55% of people infected with chronic HCV in France (133,000 patients, with an advanced stage of infection – stage 2-4 fibrosis or “F2″ to “F4″), the national health insurance must pay the equivalent of the annual budget of all Parisian hospitals and health centres (Assistance Public – Hôpitaux de Paris – AP-HP) for the purchase of sofosbuvir (SOF) alone [ii] or € 7 billion. To cover the cost of the triple therapy with peg-interferon (PEG-IFN) and ribavirin (RBV) for genotype 1 (Western Europe’s most common genotype) and then, in the near future, another DAA, the price of a two-or triple therapy will be even higher. With a new DAA such as datasclavir (BMS-052), it would cost between €100,000 and 150,000 per person for a 12 week treatment, while the production cost of sofosbuvir and datasclavir combined is estimated between €57 and €122. The profit reached by Gilead Sciences, the pharmaceutical corporation marketing Sovaldi (followed by Bristol Myers Squibb for datasclavir very soon) is huge. It exceeds the margins of all other industries by far, including luxury industry. For example, Sovaldi currently marketed in the United States has already helped Gilead to rake approximately $2.3 billion in a quarter [iii].
A pill that costs €2.5 to produce, sold €650: the pharmaceutical industry is the most “profitable” for all industries.
Riled by $84,000 Sovaldi, Senate panel digs into Gilead's Pharmasset buy
Add a new set of pricing foes for Gilead Sciences ($GILD). A U.S. Senate committee has joined the forces arrayed against the company's breakthrough hepatitis C drug Sovaldi and its $84,000 price tag.
But this time, Gilead's adversaries are using different ammo. Rather than focusing on the sheer expense of treating millions of Americans with the pricey drug, the senators are digging into the acquisition that brought Sovaldi (sofosbuvir) to Gilead. And they're questioning treatment protocols quickly revised to include Sovaldi, approved by the FDA late last year.
As The Wall Street Journal reports, the Senate Finance Committee dispatched a letter to CEO John Martin on Friday, taking issue with Sovaldi's $1,000-per-pill price. Like other critics of the expensive drug, Sen. Charles Grassley, long a thorn in pharma's side, and panel chairman Sen. Ron Wyden demanded justification for its steep price. Treating only one-tenth of Medicare's hep C patients would add $2 billion to its immediate drug spending, the senators noted in their letter.
But the committee also asked for documents related to Gilead's $11 billion buyout of Pharmasset, Sovaldi's original developer. The smaller company had forecast a $36,000 price per treatment course, less than half of Gilead's current price. The senators asked to see Gilead's communications with its investment bankers, Barclays and Bank of America Merrill Lynch, about their valuation of Pharmasset during merger talks and the related pricing assumptions for Sovaldi. They also want to know how much Pharmasset spent on R&D while developing the treatment.
The senators also want Gilead to detail its Sovaldi-related research costs since the 2012 buyout. And they're demanding to know how much Gilead plans to charge for a Sovaldi combo pill expected to make its debut later this year. The two-drug combination will make hepatitis C treatment more tolerable for most patients, because they won't need to take the difficult-to-tolerate interferon, a staple of current hep C-fighting cocktails.
Gilead CEO John Martin
Meanwhile, the panel is questioning new treatment guidelines developed jointly by the American Association for the Study of Liver Disease and the Infectious Disease Society of America. Eighteen of the 27 panel members that worked on the guidelines have either been paid by Gilead or work for institutions funded by Gilead. At the time the guidelines were released, the two organizations said that the panel excluded anyone who worked for companies making hep C drugs or who gave promotional talks about the drugs.
The senators' probe adds to the pressure on Gilead and its pricey drug. U.S. insurers and Medicaid payers have been up in arms since the drug rolled out, and European countries now say they plan to demand deep discounts. In an unprecedented move, 14 EU countries will share information to help one another negotiate better prices. Lacking that sort of pricing power, U.S. payers are hoping competition will help bring prices down, and in the meantime, are trying to limit patients' access to the drug.
- read the WSJ piece (sub. req.)
- get the Finance Committee letter (PDF)
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