Even after 99% price reduction, Gilead Sciences to make a profit.
By The American Bazaar Staff
NEW YORK: The California-based drug manufacturer Gilead Sciences, maker of the $1,000-a-pill Solvaldi, to cure hepatitis C, has struck agreements with seven generic drug makers in India to sell it at 99% reduced cost, meaning it would cost $10.
Gilead announced that it would begin selling its own version of the drug in India and other developing countries, reported The New York Times.
Hepatitis C is a liver-destroying virus carried by an estimated 3 million to 4 million Americans. Until late last year, the standard treatments required taking up to 12 pills a day, alongside antiviral drug injections that can cause flu-like symptoms. That approach cured only about 75 percent of patients, reported the Associated Press.
HCV is spread primarily by blood-to-blood contact associated with intravenous drug use, poorly sterilized medical equipment, and transfusions
U.S. regulators approved Sovaldi last December, and it was quickly embraced by physicians based on its once-a-day pill regimen and increased effectiveness, curing between 80 percent and 90 percent of patients.
The company intends to provide greater access to the medicine, Sovaldi, for most of the nearly 180 million infected worldwide with hepatitis C who do not live in rich countries. Some 350,000 people die every year of hepatitis C infections, most of them in middle- and low-income nations.
Sovaldi, in only its initial year on the market after gaining approval in the United States in December, is on pace to exceed $10 billion in sales in 2014, becoming one of the world’s best-selling drugs. Its high price has led to intense criticism even in the United States, where officials say it could drain Medicaid budgets and insurers say it could cause increases in private insurance premiums, reported the Times.
But executives at Gilead say its price is similar to those of other hepatitis C treatments and is a bargain compared with the costs of liver failure and liver cancer, which it may prevent.
The high price of some drugs in the United States, particularly those that treat cancer, has led some of the nation’s most prestigious cancer hospitals to balk at prescribing some medicines even to insured patients. And news that Gilead, which spends 19 percent of its revenue on research, can profit from sales of Sovaldi even when it cuts the drug’s price by 99 percent may further fuel controversy over the company’s profits and increase calls for the federal government to negotiate directly with drug makers for volume discounts in the federal Medicare program — negotiations that are presently forbidden by law, said the Times.
In the United States, Sovaldi costs $1,000 a pill, or $84,000 for a typical 12-week course of treatment. It is likely to be sold for less than $1,800 for a 24-week course of treatment in India, where people are generally infected with a different form of the virus and treatment regimens can take twice as long.
Gilead plans to introduce the drug in India for about $10 a pill – 1 percent of the price in the United States, Gregg H. Alton, Gilead’s executive vice president, said at a news conference. The seven Indian generic drug makers will pay royalties to Gilead to manufacture the drug for 91 developing countries, where there are more than 100 million people infected with hepatitis C, more than half of the world’s infected population, said the Times.
For India, apart from providing treatment to poor people, who would otherwise not have been able to afford the drug, it’s also an opportunity to increase their medical tourism. Many Americans who are prescribed the drug, might find it cheaper to fly to India to get it, rather than get it in the US.