Gilead Sciences' eye-popping $1,000-a-pill cost for its hepatitis C drug Sovaldi is illegal price-gouging with the potential to bankrupt parts of the healthcare industry, according to a lawsuit filed in federal court Tuesday.
The proposed class-action lawsuit, filed by the Southeastern Pennsylvania Transportation Authority in U.S. District Court in Philadelphia, accuses Gilead of antitrust violations, unjust enrichment and discrimination against those who need the drug and can't afford it, among other claims.
Gilead spokeswoman Michele Rest declined Wednesday morning to comment on the lawsuit, saying the company had just received the complaint. During a July earnings call, Gilead CEO John Martin said that as more people are cured of hepatitis C, concerns over the price will fade.
“Over time, the healthcare system will save a lot of money by these patients being healthy again,” Martin said during the earnings call.
But Ben Johns, a partner at Chimicles & Tikellis in Haverford, Pa., representing the plaintiff, said the price is a roadblock to those who need it most.
“This is an extraordinary drug, and we would like to do everything that can be done to make sure this gets out to people that need it and can benefit from it without potentially bankrupting segments of the healthcare industry,” Johns said.
The lawsuit alleges that the plaintiff, the Southeastern Pennsylvania Transportation Authority, already has paid more than $2.4 million for Sovaldi for its members.
Gilead's Sovaldi, which was approved by the Food and Drug Administration in late 2013, has a cure rate of more than 90%—significantly higher than the 40% cure rate of previous treatments for hepatitis C. But the drug costs $84,000 for a 12-week course of treatment, rattling many payers and prompting most states to implement prior authorization restrictions.
About 3 million Americans have chronic hepatitis C, a liver disease that can cause cirrhosis or liver cancer.
The complaint notes that given the large number of people suffering from hepatitis C in the U.S., Gilead doesn't need to charge so much for the drug.
“Unlike other specialty drugs that come with comparable hefty price tags—but only affect a small number of patients—there are several million Americans living with hepatitis-C that could benefit from this drug,” according to the complaint. “If Gilead's conduct is left unchecked, many of these patients will never get access to this drug and, in those cases where they do, third-party payors like plaintiff will continue to pay exorbitant prices for Sovaldi.”
Leaders of the Senate Finance Committee in July sent a letter to Gilead requesting pricing information on the drug, saying: “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.”
In a July statement, Brendan Buck, a spokesman for America's Health Insurance Plans, said Gilead should be rewarded for the “breakthrough” drug, “But the current price cannot be justified by development costs; it's purely a reflection of Gilead believing that it has a blank check.”
In the third quarter of this year, sales of Sovaldi made up about 47% of Gilead's total revenue, generating about $2.8 billion. Gilead also sells another hepatitis C drug, Harvoni, that costs $94,500 for a 12-week course of treatment.
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