Sovaldi, a highly effective Hepatitis C treatment drug made by Gilead Sciences Inc., costs $1,000 per pill in the U.S., or about $84,000 for a 12 week regimen. This is much higher than in other countries, and lawsuits allege that Gilead’s pricing scheme for Sovaldi violates antitrust laws and is an abuse of its patent monopoly.
Update: Second Patent Infringement Lawsuit Filed Over Hep C Treatments
September 12, 2016 – The University of Minnesota is suing Gilead for allegedly infringing on a patent when it marketed 3 Hepatitis C drugs that contained sofosbuvir, including Sovaldi, Harvoni and Epclusa. According to the lawsuit, all 3 Hep C drugs are covered by patent rights assigned to the university by Carston R. Wagner, PhD, Professor and Endowed Chair, Department of Medicinal Chemistry. The complaint alleges that Wagner received the patent in August 2014, and that the structural formula of sofosbuvir is covered by the patent.
What is Sovaldi?
Sovaldi (generic: sofosbuvir) is the first non-injectable drug approved by the FDA to treat Hepatitis C. The mediation can reportedly cure about 90% of patients with the most common form of Hep C in 3 to 6 months, and can do so with fewer side effects than other treatments. Sovaldi was approved by the FDA in December 2013.
What’s the Problem?
Sovaldi is currently selling in the U.S. for approximately $1,000 per pill, or $84,000 for a typical 12-week course. The sudden increase in spending on the drug has strained health plan budgets, state Medicaid programs and prison systems, and prevented Hep C patients from obtaining a desperately needed drug.
To help control costs, many health plans are pitting Gilead against AbbVie Inc., which introduced a Hepatitis C treatment called Viekira Pak in December 2014. Some plans are offering to pay for only one company’s drugs as a way to get them to offer deeper discounts.
Will Discounts Reduce Cost of Hepatitis C Treatment?
Forthcoming discounts and rebates may reduce costs per patient paid by insurers. However, it is unclear whether they will reduce the overall costs of hepatitis C treatment on a large scale. This is because in some cases, in exchange for discounts, payers are agreeing to treat more patients, including those with minor liver damage. So far, many plans have been restricting treatment to patients with more severe liver disease.
“We’ve negotiated with the aim of increasing access,” said Paul Carter, executive vice president for commercial operations at Gilead.
Class Action Lawsuit Filed Over Sovaldi Cost
In December 2009, a class action lawsuit (PDF) was filed against Gilead Sciences on behalf of the Southeastern Pennsylvania Transportation Authority (SEPTA) in Philadelphia federal court. The complaint was related to the sale and pricing of Sovaldi, which is significantly more than the original price projection for the drug, and in sharp contrast to prices paid in other countries. Gilead recently announced its intention to make Sovaldi available in 91 developing countries at deeply discounted prices, and it is reportedly available in Egypt for 99% below what it costs in the U.S.
This obvious price discrepancy is being investigated by the Senate Committee on Finance, which has questioned whether the market for Sovaldi “is working efficiently and rationally,” and whether “payors of health care….can carry such a load.”
The class action alleges that the high cost of Sovaldi has prevented Hepatitis C patients from obtaining the drug, pricing consumers and government programs out of the market. Gilead’s pricing scheme has had a disproportionate impact on minorities and those in lower income brackets, and has the potential to bankrupt segments of the U.S. healthcare system, according to the complaint. Meanwhile, the New York Times reports that Gilead generated over $10 billion in sales for Sovaldi in 2014 alone, a figure that brought it close to being the best-selling drug in the world in only its first year on the market.
The lawsuit contends that, under these circumstances, Gilead’s pricing for Sovaldi cannot be justified by any patent rights it claims to have on the drug. The complaint seeks class action status on behalf of all persons and entities that have paid some or all of the price of Sovaldi, as well as for those who have been prevented from obtaining the medication due to its price. The complaint asserts causes of action for:
- Unjust enrichment;
- Violations of provisions in the Sherman Antitrust Act and Affordable Care Act, and
- Breach of contract theory.
The class action 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.
Sovaldi and Harvoni
Despite the astronomical sales Sovaldi has generated to date, the figures were lower than they might have been because of Gilead’s introduction of an even newer Hep C drug, Harvoni (generic: ledipasvir and sofosbuvir). Since its October 2014 approval, Harvoni recorded $2.1 billion in sales in the U.S. alone. Together, Sovaldi and Harvoni achieved $12.4 billion in sales, just short of the $12.5 billion in sales recorded in 2014 by AbbVie’s autoimmune disease drug Humira, which is believed to be the world’s top-selling pharmaceutical.
Study Shows Sovaldi Medicaid Restrictions Create Hep C Treatment Barrier
A June 2015 study published in the Annals of Internal Medicine found that Medicaid coverage restrictions for Sovaldi may not be allowing some Hepatitis C patients to receive adequate treatment.
“Federal Medicaid law requires coverage, yet reimbursement criteria for Medicaid programs effectively deny access,” said Dr. Lynn E. Taylor, director of the HIV/Viral Coinfection program at The Miriam Hospital in Providence, RI. “The denial of treatment by most states violates the spirit of the law. In our analysis, we found that most states with known sofosbuvir Medicaid reimbursement requirements impose undue restrictions on eligible recipients.”
A research team led by Taylor looked at information from state Medicaid websites from June to December 2014. The data, which included reimbursement criteria for Sovaldi for 42 states and the District of Columbia, revealed whether the drug was covered and coverage criteria based on liver disease stage, HIV co-infection, prescriber type and presence of drug and alcohol use.
“Nevada is the only state that does not require prior authorization for sofosbuvir,” the researchers said. “Nine states have unknown criteria, with neither the prior authorization nor eligibility information publicly available.”
The most common restrictions for Sovaldi reimbursement included the stage of fibrosis, substance use and abstinence from alcohol or drugs combined with toxicology screening and insurer limitations.
Of the 42 states for which information was available:
- 27 restrict reimbursement to patients with advanced fibrosis or cirrhosis;
- 34 restrict reimbursement based on liver disease stage;
- 4 states restrict reimbursement only to patients with cirrhosis;
- 2 states provided reimbursement for patients with moderate fibrosis;
- 1 state reimbursed patients with mild fibrosis;
- 8 states had no reimbursement criteria based on disease stage;
- One-quarter of the states require HIV/HCV co-infected patients to be receiving antiretroviral therapy or have no evidence of HIV to be reimbursed, and
- Two-thirds have restrictions based on prescriber type.
“The Medicaid restrictions generally apply to the poorest and most underserved patients with hepatitis C infection, are highly stigmatizing, and not based on evidence,” said Dr. Jason Grebely, associate professor of the Kirby Institute at UNSW Australia, and co-author of the study. “The data suggests that state Medicaid policies for access to new hepatitis C therapies should be reviewed and revised in line with national and international clinical recommendations.”
FDA Approves 1st Combo Drug to Treat Hep C
June 28, 2016 – Federal health officials have approved the first pill to treat all major forms of hepatitis C, according to the LA Times. The drug, Epclusa, combines Sovaldi with a new medication that attacks the virus using a different mechanism. Gilead’s Hep C drugs have generated billions in profits by replacing an older approach that involved a grueling pill-and-injection cocktail.
Gilead to Pay Merck $200M Over Sovaldi Patent Infringement
March 28, 2016 – A federal jury has ordered Gilead to pay Merck & Co. $200 million for infringing on patents for Sovaldi and Harvoni, according to Bloomberg Business. Merck claims 2 patents that it and partner Ionis Pharmaceuticals filed in 2002 were the basis for Gilead’s sofosbuvir, the active ingredient in Sovaldi and part of combination drug Harvoni, which are currently among the world’s most profitable prescription drug franchises. Sovaldi and Harvoni combined for worldwide sales of over $19 billion in 2015, nearly two-thirds of Gilead’s revenue for the year. Merck initially sought damages including 10% of U.S. sales of Harvoni and Sovaldi through the end of 2015, which totaled $23.1 billion.
Priority Review for New Gilead HCV Combination Treatment
January 6, 2016 – A new combination therapy for hepatitis C virus (HCV) from Gilead Sciences could be approved in the U.S. by this summer after being awarded priority review by the U.S. Food & Drug Administration (FDA), according to PMLiVE. The fixed-dose drug that combines Sovaldi with velpatasvir – a new NS5A inhibitor – has been filed as a treatment for HCV genotypes 1-6 on the strength of 4 phase III trials. FDA is expected to deliver a verdict on the application by June 28.
New Yorkers to Spend $1B on Hep C Drugs
Residents of New York are on pace to spend over $1 billion in state and federal money on Hepatitis C cures this year, according to Politico. The massive spending comes amid a heated debate over the cost of prescription medications, the value they provide and whether their manufacturers require stricter regulation.
According to federal data, New York seniors spent $415 million through the first half of this year on Hep C drugs, almost as much as was spent in all of 2014. This figure accounts for about 9% of the $4.6 billion Medicare Part D drug program, which is spent nationwide on breakthrough drugs like Sovaldi and Harvoni.
Sovaldi Linked to Slow Heartbeat in Hepatitis C Patients: NEJM Report
Sovaldi may trigger an abnormally slow heartbeat (bradyarrhythmia) and put patients at risk of passing out, according to a report published November 5 in the New England Journal of Medicine (NEJM). The report detailed episodes of bradyarrhythmia that occurred in the first 10 days of Sovaldi therapy in 3 of 415 patients treated at the Hopital Cochin’s hepatology and cardiology group in Paris, France in 2014. Click here to learn more.
Drugmaker Put Profits Over Patients in Pricing $1,000 Hepatitis Pills, Report Finds
Gilead, which makes 2 of the most expensive prescription medications on the market, was looking to maximize profits and didn’t care if patients could afford them, a bipartisan senate committee announced today. According to the report, Sovaldi has cost the federal government billions and is far too expensive for many patients to afford.