New hepatitis C drug costs nearly $100,000

A second potential blockbuster drug from Gilead Sciences to treat hepatitis C has been approved by the Food and Drug Administration. But at a cost of nearly $100,000 for a full course of treatment, the drug is certain to spark further debate over the pricing of specialty drugs.

The agency approved Harvoni following three clinical trials and an expedited review process because of the drug's potential for curing the liver disease. The trials showed that 94% of patients had no evidence of the virus in their bloodstream after 12 weeks of treatment with Harvoni and 99% of patients were cured after 24 weeks of treatment.

“Unlike other serious chronic diseases, hepatitis C can be cured and Harvoni offers patients the potential for a cure in as little as eight weeks,” John Martin, Gilead Sciences CEO, said in a news statement.

In December 2013, the FDA approved Sovaldi for treatment of hepatitis C. In the first half of this year, Gilead Sciences racked up $6 billion in sales, making it the most successful drug launch in U.S. pharmaceutical industry history.

But at a cost of $1,000 per pill, it's also sparked an outcry over out-of-control pricing on specialty drugs. Sovaldi typically is taken in combination with other drugs, which can push the cost of a full 12-week course of treatment well above $100,000.

The cost for a 12-week course of treatment with Harvoni is $94,500. Some patients will require only an eight-week course of treatment, which would cost $63,000. An analysis by Bank of America Merrill Lynch predicted there will be $1.6 billion in Harvoni sales in the fourth quarter of this year. The price of Harvoni elicited immediate blowback from consumer advocates and the insurance industry.

“By charging $94,500 for Harvoni, Gilead has made clear that it values Wall Street above the interests of patients, taxpayers, employers and working families who must shoulder the burden of high healthcare costs,” John Rother, president of the National Coalition on Health Care, a nonpartisan advocacy group, wrote in a blog post. “The company's refusal to take a more reasonable and moderate approach to pricing cements its status as the poster child for everything that is wrong with pharmaceutical industry pricing.”

America's Health Insurance Plans, which has been in a pitched battle with pharmaceutical interests over drug pricing, was similarly critical. “Gilead had an opportunity to demonstrate that it wants to be part of the affordability solution, but the company still seems to believe it has a blank check,” AHIP spokesman Brendan Buck said in a news statement. “Our healthcare system has long relied upon a careful balance between affordability and rewarding innovation, and this pricing topples it.”

But Dr. Bruce Bacon, a liver specialist at the St. Louis University School of Medicine, indicated that the drug will be an improvement over Sovaldi: The cure rate is slightly higher and patients won't have to take additional drugs.

Follow Paul Demko on Twitter: @MHPDemko