Sovaldi paved the way for 2016 drug price fight

November 8, 2016

At the beginning of this year, Massachusetts Attorney General Maura Healey sent a letter to Gilead Pharmaceuticals asking the company to revisit its pricing strategies for two Hepatitis C drugs, Sovaldi and Harvoni. Healey suggested the price of the drug restricts access and places a large financial burden on the Commonwealth’s budget, especially as opioid addiction drives Hep C morbidity higher. Both drugs carry a list price of nearly $100,000 per treatment. Almost one year after the Senate investigation of Sovaldi, we are revisiting this letter to ask, Has anything changed?

 

With a communicable disease like Hepatitis C, there is a public health interest in the treatment being as widely available as possible. But that carries a long term problem for profit-driven businesses like Gilead, contradicting their goal of making money by growing utilization of their product. Whether or not the Attorney General’s office can find any evidence of wrongdoing, this is an interesting case that goes to the heart of why drug pricing can feel...icky. However, this is far from the first time it has been pointed out that drug companies have an interest in people being sick.

 

The January letter stated Gilead’s Hep C drugs are priced "in a manner that effectively allows hepatitis C to continue spreading through vulnerable populations, as opposed to eradicating the disease altogether." If Hep C is eradicated, that would be the end of the road for these two very profitable drugs. Which brings us to another “icky” thing: claiming profit-driven big pharma has “cured” various illnesses.

 

In a Reuters article about the AG’s letter, Wall Street analyst Michael Yee was quoted saying, “Since when is it a crime to have cured a global epidemic afflicting millions of patients, and the price is the same as the older drugs, which had less cure and bad side effects?” As the Senate found in 2015 and AG Healey demonstrated in her letter, the conduct of Gilead does not show a desire to “cure” global epidemics, but rather to make as much money as possible.

 

Sovaldi was the subject of a U.S. Congress investigation that concluded in December 2015. The Senate Finance Committee found that the life-saving drug was priced purely based on maximizing revenue, not taking into account affordability or access. The U.S. Senate could not find any legal problem with the pricing strategy, but based on this letter, it seems the Commonwealth of Massachusetts might. We spoke with the Massachusetts AG’s office and they suggested there might be state case law to look to, but could not comment on whether an investigation was taking place.

 

This summer’s flourish of outrage over EpiPen prices represented a breaking point for big pharma. Unlike Sovaldi, EpiPen prices captured the attention of parents, whose concerns are taken particularly seriously by Congress. Questions about the motives of big pharma became more pointed and more public -- average Americans seemed to engage in the discussion over EpiPen in a way not seen with Sovaldi. (Jimmy Kimmel’s joke at the 2016 Emmys, anyone?)

 

A year later, it looks like attitudes have changed toward drug companies and how they price their products. However, it might take until the next Congress is sworn in to see what comes of those changes. There is a harbinger to look out for: Prop 61 in California. Prop 61 ties drug prices paid by California programs like MediCal to the VA, which pays less than most purchasers. If it passes, that is indicative of big pharma’s public influence being weaker than ever. We may then see a domino effect, with momentum toward protecting consumers from high drug prices and the restricted access high prices bring.

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