Healthcare Business News
Senator Ron Wyden

Senators want answers about Sovaldi's price tag

By Paul Demko
Posted: July 11, 2014 - 1:15 pm ET

A pair of influential senators are seeking answers about the steep cost of the hepatitis C drug Sovaldi.

Sens. Ron Wyden (D-Ore.), chairman of the Finance Committee, and Chuck Grassley (R-Iowa), the ranking minority member of the Judiciary Committee, sent a letter (PDF) Friday to the chairman and CEO of Sovaldi manufacturer Gilead Sciences with questions about how the drug's price was determined.

The senators also are seeking detailed information about the company's November, 2011 purchase of Pharmasset, the original developer of Sovaldi.

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“Given the impact Sovaldi's cost will have on Medicare, Medicaid and other federal spending, we need a better understanding of how your company arrived at the price for this drug,” Wyden and Grassley wrote. “In order for a marketplace to function properly, it must be competitive, fair and transparent. It is unclear how Gilead set the price for Sovaldi. That price appears to be higher than expected, given the costs of development and production, and the steep discounts offered in other countries.”

Sovaldi costs roughly $1,000 per pill, with a full course of treatment totaling at least $84,000. Wyden and Grassley pointed out that the drug could cost Medicare $2 billion by the end of next year if just 25,000 individuals with hepatitis C (HCV) are treated with the drug. They also highlighted the potential cost to state and federal prisons given that roughly one-third of the HCV population is thought to be incarcerated.

But Sovaldi also has been hailed as an effective means to eradicate the liver disease, with a cure rate of 90% or higher. That could drastically reduce medical costs in the long run, as it eliminates the need for costly procedures like liver transplants. The Food and Drug Administration approved the drug in December.

Last month, the CMS agreed to pay for HCV screening for Medicare beneficiaries born between 1945 and 1965. The agency also approved screening tests for individuals at high risk of contracting the disease, such as those with a history of illicit injection-drug use. That could lead to thousands of individuals learning they are infected, since the disease can be asymptomatic for years.

Wyden and Grassley are seeking copies of all communications between Gilead and Pharmasset about the valuation of the latter company during acquisition talks. They're also requesting copies of all marketing and pricing plans for Sovaldi, both in the U.S. and abroad. In addition, they want an itemized accounting of research and development costs associated with the drug. The senators requested that Gilead begin delivering the information within two weeks, and that all documentation be provided within 60 days.

Gilead indicated in a statement that the company has received the letter and intends to cooperate with the requests.

Follow Paul Demko on Twitter: @MHpdemko

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