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.
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.
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.
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.
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.