Update: FDA Approves Gilead’s New Combo Hepatitis C Drug
June 28, 2016 – Gilead Sciences has been granted FDA approval for its new hepatitis C combo medication Epclusa, according to the Wall Street Journal. Epclusa combines Sovaldi with the new velpatasvir, making it the first drug approved to treat all 6 major strains of hepatitis. Gilead priced Epclusa lower than both Sovaldi and Harvoni, at $74,760 per course of treatment, according to a company spokeswoman.
What is Sovaldi?
Sovaldi (generic: sofosbuvir) is an antiviral medication that prevents Hepatitis C Virus (HCV) cells from multiplying in the human body. The drug isn’t a cure-all, but it has been found to eliminate the Hep C virus in about 90% of patients when used in conjunction with another medication. It is also better tolerated and has fewer side effects than earlier Hepatitis C treatment drugs.
Class Action Lawsuit Filed Over Cost of Sovaldi
In December 2014, a class action lawsuit (PDF) was filed against Gilead Sciences on behalf of the Southeastern Pennsylvania Transportation Authority (SEPTA). The complaint alleges that Gilead’s patent protection does not justify Sovaldi’s ‘exorbitant’ cost: $1000 per pill, or about $84,000 for a typical 12-week regimen.
Gilead’s “limited rights as a patent holder do not translate into a license to price-gouge consumers,” according to the lawsuit. SEPTA has paid out more than $2.4 million for Sovaldi for its employees since the drug was approved in December 2013. Sovaldi generated a staggering $8.5 billion in sales for Gilead during the first 3 quarters of 2014 alone, according to the complaint.
Jason N. Doctor, a health economist at the USC’s School of Pharmacy, is not sure what will come of the class action, but he says demand for Sovaldi will continue to rise. However, insurance companies have budgets, and high-priced medications are typically supported only to treat rare diseases that affect very few people.
“Sovaldi is different,” Doctor said. “A lot of people will require this drug and, if insurers cover it at that price, that will affect the other things for which insurers can pay.”
The SEPTA class action alleges:
- Unjust enrichment and breach of good faith and fair dealing in that the cost of Sovaldi is unreasonably high;
- Gilead discriminated against Hepatitis C patients on the basis of their disability, in violation of the Affordable Care Act (ACA), and
- Gilead’s pricing scheme for Sovaldi violates antitrust laws and is an abuse of its patient monopoly.
The complaint is: Southeastern Pennsylvania Transportation Authority, individually and on behalf of all others similarly situated, v. Gilead Sciences Inc, U.S. District Court, Eastern District of Pennsylvania, No. 2:14-cv-06978.
Balancing Innovation and Access to Sovaldi: A “Pressing Social Issue”
The high price of Sovaldi has prompted a heated debate between consumers, politicians and drug manufacturers. There are many sides to the story. Consumers may feel like they’re being gouged while drugmakers tend to see value in the astronomical costs of desperately needed medications like Sovaldi.
“To some degree I think people feel like we’re being tested as a society,” said Jim Ruble, a clinical associate professor of pharmacotherapy at the University of Utah College of Pharmacy.
The amount of money drug companies spend on research and development for their products should be made public, Ruble said. That could dispel some of the outrage over high drug prices, he added.
Kate Greenwood, a research fellow at Seton Hall University, believes it’s necessary to balance access to desperately needed medications like Sovaldi with the need to incentivize innovation.
“At some point, restricting the price that firms can charge for medications will reduce the number of new medications that the private sector develops,” Greenwood said.
Values Vs. Outcomes
Sovaldi isn’t the first prescription drug to come with a hefty price tag. Provenge, a prostate cancer treatment made by Dendreon Corp., costs about $93,000 for 3 cycles of therapy. For some patients, it may be well worth the cost because it can prolong their lives. For others, there may not be enough value in the therapy or its cost.
“Is it worth it? That’s where we have a lot of conflicting values,” Ruble said.
Greenwood said she thinks Sovaldi may not be overpriced because Hepatitis C treatment is expensive for patients and the healthcare system as a whole. Plus, a patient should only have to take 1 course of Sovaldi to be cured of Hep C.
“Sovaldi is not like, say, a drug that lowers cholesterol or treats high blood pressure, which a company would expect doctors to prescribe, and patients to take, for many years,” Greenwood said.
Why Americans Pay So Much for Prescription Drugs
One of the main reasons Sovaldi is so controversial is because its price is much lower overseas than it is in the U.S. However, this is a common practice, as America is seen as a wealthy country with a relatively free market.
The U.S. spends about twice as much on prescription medications as Europe because European nations have tighter price controls, according to Doctor. In France, Sovaldi costs about $51,000 for a 12-week regimen after negotiations, he said.
Can Insurers use Arbitrary Guidelines to Limit Access to Hep C Treatments?
No. Laws and regulations that govern legal actions brought under the Employee Retirement Income Security Act (ERISA) do not allow insurance companies to adopt any internal clinical guidelines they choose and then rely upon them with impunity. Instead, insurers may rely only upon guidelines which reasonably interpret the insurance plan that governs a patient’s coverage.
Health Advocacy Groups Sue FDA Over Failure to Provide Hep C Drug Trial Data
The FDA is facing a lawsuit by 2 public health advocacy organizations for its failure to provide clinical trial information on Sovaldi and Harvoni, according to the Wall Street Journal. The complaint involves a Freedom of Information request and stresses that unless clinical trial data is made public, safety and cost effectiveness of the Hepatitis C drugs will remain largely unknown.
Treatment Action Group (TAG) and the Global Health Justice Partnership (GHJP) requested the data from Gilead last year. However, they were unable to obtain the information and did not get a response. The organizations sought additional assistance from the FDA, from whom approval was given for Sovaldi and Harvoni. The agency denied the request for “expedited processing.” It can take up to 2 years to look over the information.
TAG and GHJP want independent researchers to look at the results and further improve Hep C patient treatment, or even to possibly lower the cost of the drugs. Industry is resisting the disclosure, saying it could “compromise trade secrets” and patient confidentiality.
“This delay will leave doctors and patients in the dark for too long,” said Amy Kapczynski, a professor at Yale. Kapczynski also noted that since the FDA already collects the data, as long as it is promptly disclosed, treatment choices can become more informed, with “real and immediate consequences for public health and spending.”
The lawsuit is: Treatment Action Group et al v. FDA, U.S. District Court, District of Connecticut, No. 15-00976.
Gilead Reaps Huge Q2 Earnings from Hep C Drugs
Despite increasing competition from new treatments, Sovaldi and Harvoni generated a staggering $4.9 billion in sales for Gilead during the second quarter, according to the Wall Street Journal. As a result of its astronomical earnings, Gilead once again raised its guidance for net product sales, this time by $1 billion, and now expects sales to reach $29 to $30 billion by the end of fiscal year 2015. Click here to learn more.
Hep C Treatments Could Cost CA Gov’t $5 Billion: Report
Sovaldi and Harvoni could cost the California state government $512 million a year — or up to $5.1 billion in total — for patients in prison, state hospitals or on Medi-Cal, according to the California Association of Trade Plans (CATP). The expense range is so large because it’s still unknown whether there will be manufacturer discounts, or how many patients would take the drugs. It has been estimated that up to half of people with Hep C are unaware they have it. Click here to learn more.
Sovaldi out of Reach for Most Californians, Except Inmates
Over the past year, 94% of Hep C patients in California who requested Sovaldi or Harvoni through Medi-Cal were denied coverage, according to the Los Angeles Daily News. Meanwhile, the state has paid nearly $60 million over the past fiscal year to treat prisoners with advanced stages of Hepatitis C.
In July, a study released by the California Association of Health Plans (CAHP) found that treating just 5% of those with Hep C who are incarcerated or in state hospitals would cost between $512 million and $921 million. A month after the study was released, Governor Jerry Brown signed a budget that included spending nearly $61 million to treat the disease among California’s inmates.
Gilead Ordered to Pay Merck $200 Million Over Sovaldi Patent Dispute
March 28, 2016 – A California jury last week ordered Gilead to pay Merck & Co. $200 million in damages for infringing on 2 patents related to Sovaldi and Harvoni, according to Reuters. The award is significantly less than the $2 billion Merck initially demanded. The same jury upheld the validity of the patents, which lie at the heart of the dispute over Gilead’s hepatitis C treatments. Together, Sovaldi and Harvoni had over $20 billion in U.S. sales in 2014 and 2015.
Senate Report Accuses Gilead of Putting Profits Ahead of Patient Access
December 1, 2015 – A Senate Finance Committee investigation into the cost of Gilead Sciences’ Hepatitis C treatments Sovaldi and Harvoni has determined that the drugmaker put maximizing revenue ahead of patient access, according to Reuters. The report found that state Medicaid programs spent $1.3 billion before rebates in 2014 to treat less than 2.4% of enrollees with the liver disease. Click here to learn more.