David's New Book

Sunday, March 23, 2014

Pricing!

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.

Yet Representative Henry Waxman and other Democrats on the House Energy and Commerce Committee are demanding that Gilead justify their pricing.  While I think this will be easy for Gilead to accomplish, it is frustrating that Congressman Waxman is getting on his self-righteous high horse without adequate knowledge of the situation (I’m being charitable here since I can think of no other rational explanation for his behavior). I am getting on my own soapbox here because this could have implications for antibiotic pricing and the last thing we need is someone putting a damper on this at this critical time in the evolution of antibiotic research.  

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.