Gilead and Hepatitis
C Drug Pricing. Speaking about
pricing, I was infuriated to read Andy
Pollack’s report of congressional self-righteousness on the topic of
Gilead’s pricing for a new, less toxic, more effective and shorter therapy for
chronic Hepatitis C infection. Also see Josh
Bloom’s article on the same topic a few months ago. Let’s think about this
for a few minutes. Hepatitis C is the
most common infectious cause for liver transplantation in the world today.
Before Gilead’s Solvadi, the standard treatment was 24 – 52 weeks of interferon
plus ribavirin. Interferon causes fever,
chills, depression, low blood counts and a number of other problems. It has to be administered by intravenous
injection monthly. Other drugs have to be used to counteract its side effects.
Ribavirin is given as a pill (many pills) and causes anemia among other
things. Sometimes transfusions are
required to maintain blood counts throughout a course of therapy. And after you
have finished the entire course, the failure rate of this therapy can be as
high as 50%. Even though Solvadi has to be given either with interferon And
ribavirin or just combined with ribavirin (depending on your type of HCV virus
infection), the treatment course is just 12 weeks. There are fewer side effects
and the therapy works much better curing about 80% of patients. And when I say
cure – I mean cure. No more need for
therapy.
Solvadi, perhaps in the future, could be used with other new,
less toxic drugs such that ribavirin and interferon could be avoided
altogether. That is now the holy grail
of HCV therapy.
Not every patient infected with HCV has to be treated. Some will just carry the virus (and
presumably could pass it on to others) but will not suffer harm from their
infection. About 80% of patients who become infected with HCV will develop a
chronic infection. But only about 15% of
them will go on to develop complications from their infection that would
require therapy. Some of this 15% will go on to get liver cancer or will
require liver transplantation. Because there is a limited population that would
require therapy, Gilead needs to charge a high price to recoup their investment
in Solvadi (and all the other drugs that failed before Solvadi). Not only that,
but it is easy to show that even at the price Gilead is charging, $84,000 per
12 week course of therapy, the reduction in side effects and the greater
benefit of therapy is easily worth every penny.
Compared to oncology drugs (most of them), treatment with Solvadi
or antibiotics against bacterial infection result in CURE! Not ongoing therapy forever, not in a few
months of additional life in the hospital or hospice, but CURE!
Antibiotic Pricing. In the better news department, an article
in Barrons notes that the Disarm act, currently in front of congress, would
remove punitive fiscal measures from DRG reimbursements when hospitals use
expensive drugs under certain circumstances.
In this particular case, congress is targeting patients with high unmet
needs where the drug is limited to restrictive populations. In other words, the bill apparently is
specifically designed to allow the kind of pricing for highly specific antibiotics
that would be required for companies to earn a return on their investment. This means the $15-30,000 per course of
therapy that was discussed at the Pew
meeting last year would be reimbursed by Medicare, Medicaid and other payers.
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