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Fri Dec 4, 2015, 06:17 AM

Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis

-- Drug


Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and senior committee member Chuck Grassley, R-Iowa, today released the results of an 18-month investigation into the pricing and marketing of Gilead Sciences’ Hepatitis C drug Sovaldi and its second-wave successor, Harvoni. Drawing from 20,000 pages of internal company documents, dozens of interviews with health care experts, and a trove of data from Medicaid programs in 50 states and the District of Columbia, the investigation found that the company pursued a marketing strategy and final wholesale price of Sovaldi – $1,000 per pill, or $84,000 for a single course of treatment – that it believed would maximize revenue. Building on that price, Harvoni was later introduced at $94,500. Fostering broad, affordable access was not a key consideration in the process of setting the wholesale prices.

“Gilead pursued a calculated scheme for pricing and marketing its Hepatitis C drug based on one primary goal, maximizing revenue, regardless of the human consequences. There was no concrete evidence in emails, meeting minutes or presentations that basic financial matters such as R&D costs or the multi-billion dollar acquisition of Pharmasset, the drug’s first developer, factored into how Gilead set the price. Gilead knew these prices would put treatment out of the reach of millions and cause extraordinary problems for Medicare and Medicaid, but still the company went ahead. If Gilead’s approach to pricing is the future of how blockbuster drugs are launched, it will cost billions and billions of dollars to treat just a fraction of patients,” Senator Wyden said.


Comment by Don McCanne of PNHP
: Gilead’s heartless strategy in deciding to price their hepatitis C drugs well above what any reasonable market would tolerate demonstrates yet another detrimental consequence of our health care financing model, perpetuated and expanded by the Affordable Care Act. Gilead assumed that they could get away with it since they figured that most of the costs would be covered by the drug plans in the various public and private insurance programs. Well, they pushed too hard.

The extensive investigation by the staffs of the Senator Ron Wyden and Senator Charles Grassley confirmed that the pricing of Sovaldi and Harvoni was based on pure greed, ignoring completely the human consequences.

The other report released today by the Kaiser Family Foundation demonstrates the consequences that these egregious pricing behaviors have on Medicare beneficiaries enrolled in the Part D drug program - a program supposedly designed to improve value by leveraging market forces. Even when the preferred drug - Harvoni - is included in the Part D formulary, the median out-of-pocket cost for the Medicare beneficiary is $7,153! There goes the food and the rent and a whole lot more.

The Kaiser Foundation report is particularly helpful in demonstrating how deficient the Medicare Part D program is. They suggest shopping, but who knows what outrageously priced drugs will be prescribed next year? How can you shop drug formularies for drugs you have not yet been prescribed?

Single payer advocates understand that none of this would be tolerated in a well designed national health program. You would simply receive the drugs you need, when you needed them. Gilead would be compensated fairly for their products. It’s just too bad that their current executives will not end up in jail, where they belong.

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Reply Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis (Original post)
eridani Dec 2015 OP
pansypoo53219 Dec 2015 #1
Hoyt Dec 2015 #2

Response to eridani (Original post)

Fri Dec 4, 2015, 06:21 AM

1. i am shocked, shocked i say, greed in medical care?!?

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Response to eridani (Original post)

Fri Dec 4, 2015, 06:39 AM

2. It is time to establish some form of regulated pricing model, like a public utility or something.


It's complex because you don't want to stifle innovation, one blockbuster drug may be followed by many flopped drugs, drug companies do have programs to get the meds to some of the poor, etc. But, this is getting ridiculous.

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