House Democrats target Gilead for high price of Sovaldi


Democrat Representative Henry Waxman, long a bete noire of the pharmaceuticals industry, has his sites trained on Gilead (GILD) for charging $84,000 for a course of the company's new Hepatitis C drug Sovaldi.

"Our concern is that a treatment will not cure patients if they cannot afford it," Waxman co-writes in a letter to Gilead CEO John Milligan. Waxman signed the letter along with fellow Democrats Frank Pallone and Diana DeGette.

The problem for Waxman et al is that other than trying to shame Gilead into lowering the price, they have no mechanism for forcing the company to do so.

The best bet for the congressmen, insurers and patients is competition, with a number of rivals also working on Hepatitis C drugs.

From other sites
Comments (27)
  • Felixofagassiz
    , contributor
    Comments (48) | Send Message
     
    Dear Henry,
    Please feel free to spend your own personal money developing as good or better a drug. But let me warn you, the adventure could get expensive and no guarantees of success. And then, I'm sure you will be happy to let me decide how much you can recoup in the market, based on measures of fairness, compassion, maybe a smidgeon of politics thrown in for good measure. Sounds like a deal to you?
    24 Mar 2014, 09:44 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    That $84,000 (US cost) regimen can be had in Egypt for $900. That's a deal for Egyptians, but not for Americans.

     

    This is one of the items true 'health care reform' should address; Americans are subsidizing costs for the rest of the planet.
    24 Mar 2014, 09:59 AM Reply Like
  • adel sakr
    , contributor
    Comments (2) | Send Message
     
    the reason for dropping the cost in Egypt by 99% is due to Egyptian army invented an equipment that treat named complete cure device (CCD) forboth HCV & HIV with 100% clinical results with no side effects so Gilead want a piece of cake from Egyptian market before sovaldi deleted from international market
    24 Mar 2014, 01:18 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    Is that CCD device made of lead?
    24 Mar 2014, 01:28 PM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (678) | Send Message
     
    Wasting taxpayer's money and upsetting stockholders is not the purpose of Congress (or at least it's not supposed to be the purpose). Isn't Waxman retiring? Good riddance to bad rubbish!

     

    I don't like the idea of Gilead selling to Egypt so cheap, but Egypt has the ability to negotiate with Gilead. If the US didn't have a law against the government negotiating prices for medicines, this would be a non-issue. Congress needs to address the negotiating problem, not the drug price problem.

     

    But as far as selling in the US, if I remember right, can't they can charge what the market will bear? Still, compared to a liver transplant this is cheap. And the success rate is much higher with a shorter treatment time. People should be rejoicing and Congress should be praising Gilead. And stockholders should be gaining instead of losing.
    24 Mar 2014, 09:57 AM Reply Like
  • Maddy1951
    , contributor
    Comments (2) | Send Message
     
    May I remind you that Gilead is hardly playing in a free market. They are taking advantage of the fact they have patent protection and are free to charge what ever they want until competition comes along. But may I also remind you that you and I as taxpayers have subsidized their success by providing significant financial support to help get their product to market. They get multiple tax breaks and are provided taxpayer supported academic researchers to study their drug. The 100s of millions of dollars that are so often reported as R & D costs to get to market are incredibly bloated and do not take into account how much of that support comes from the taxpayer.

     

    I agree that Congress should allow the Feds to negotiate drug prices and if the industry doesn't do something to control their prices they could begin to face pricing constrictions similar to those being faced in the UK and other European countries where regulators are trying to keep the high costs of drugs down.
    24 Mar 2014, 11:34 AM Reply Like
  • Maddy1951
    , contributor
    Comments (2) | Send Message
     
    Joe - having worked in the industry for over 30 years I believe I know what I'm talking about. I have witnessed cases where drug prices may be in the thousands one day and drop into the hundreds overnight while still making money for the company. Gilead is hardly playing in a free market. No, they are playing in a highly protected market. Can I remind you that you and I as taxpayers have played a significant role in their success, and as such, should be given some consideration. Taxpayers underwrite a considerable amount of their research costs through multiple tax breaks and most of their research is performed at taxpayer supported academic research institutions. Oftentimes many of the original discoveries have come from taxpayer supported academic labs, but those institutions do not reap commensurate financial rewards. Bottom line, the 100s of millions of research costs so frequently quoted by the industry to get their products to market are heavily inflated and do not take into account how much has been subsidized by you and me.

     

    I agree that the Feds should be able to negotiate drug prices. I also believe that the industry should address drug pricing on their own or they could face stiffer regulations in the US in the future as they now do in the UK and other European countries who regulate drug prices in an effort to control their health care costs. We can not complain about the rising costs of healthcare yet promote an industry's indiscriminate pricing policies.
    24 Mar 2014, 12:04 PM Reply Like
  • Wintond
    , contributor
    Comment (1) | Send Message
     
    I assume Waxman wants the fed to pay for R & D........
    24 Mar 2014, 10:07 AM Reply Like
  • sandyseeworld
    , contributor
    Comments (35) | Send Message
     
    Dear Congress People: I suggest you just shut up. You're ruining my Gilead investment. I don't care if people have to pay more to be cured from Hepatitis C. The most important fact is that they will be cured and NOT die. You are stupid.
    24 Mar 2014, 10:08 AM Reply Like
  • thepharmd
    , contributor
    Comments (12) | Send Message
     
    What about Kalydeco? It's cost is $298,000 per year for the rest of a patient's life. This is ridiculous that they are going after only one drug and one company. I'm a pharmacist and know that our healthcare system is broken, more so with the ACA, but not allowing pharma companies to recoup their R&D will only stop the advancement of medications.
    24 Mar 2014, 10:09 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    I don’t think anyone is trying to deny GILD or any other pharmaceutical company the opportunity to recoup R&D costs, but it is time to ask why Americans are being asked to pick up 100% (or close to it) of the tab.

     

    You can go anywhere on the planet and buy brand name prescription drugs for a fraction of what you pay in the US; I’ve done it. There used to be bus tours into Canada to allow Americans the opportunity to buy brand name drugs at a fraction of the cost in the US. There were so many Americans doing this that we were causing shortages in Canada and the Canadian government eventually stepped in to ensure Canadians had an adequate supply of drugs. The US Congress also stepped in, at the behest of the manufacturers, but that was done to protect profits not consumers.

     

    Americans are getting screwed.
    29 Mar 2014, 05:13 AM Reply Like
  • Rondor1
    , contributor
    Comments (36) | Send Message
     
    This politically driven witch-hunt is just pathetic. How much will it cost NOT take take Sovaldi? There are programs in place, I have read, whereby a poor, uninsured patient can get the pills for as low as $5 per pill to offset he cost for those that cannot afford it.

     

    I think the insurance companies would consider it a great deal, especially under the ACA.
    24 Mar 2014, 10:13 AM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    "Our concern is that a treatment will not cure patients if they cannot afford it,"

     

    What if someone can't afford it at $30K? $15K? Do I hear $50?
    24 Mar 2014, 10:29 AM Reply Like
  • trustcamy
    , contributor
    Comments (7) | Send Message
     
    With the US patent laws and the statutes prohibiting government price negotiations for drug prices the drug makers have the opportunity to reap high economic rents. The real market prices for these products lies outside US boarders. This may be the straw that broke the camels back. We have paid a terrible price for our outdated dis-functional health care system in the US. Perhaps this will finally lead us in a different direction. I own GILD but I do not believe the prices charged are equitable. You could never charge these prices if people had to pay for these drugs out of their own pockets.
    24 Mar 2014, 11:31 AM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    "...US boarders.." Priceless. I hope it was intentional.
    24 Mar 2014, 12:59 PM Reply Like
  • combatcorpsmanVN
    , contributor
    Comments (1313) | Send Message
     
    Ask an internist or a gastroenterologist what the cost is for the conventional treatment of HEP C currently.

     

    Then ask what the efficacy percentage of the current treatment regimen.

     

    Finally, ask how long does a HEP C patient have to be on the current treatment.

     

    And, then - when you have those answers -- draw the correct conclusion.
    28 Mar 2014, 06:04 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    That doesn’t even begin to explain why Sovaldi costs $84,000 in the US and $900 in Egypt, which is why Waxman is going after GILD in the first place.
    29 Mar 2014, 04:35 AM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    "...which is why Waxman is going after GILD in the first place." That is an incredibly naïve statement. Regardless of which side of the aisle, there's only one reason a politician publically says anything these days. This is the real issue, not the political positions themselves.
    29 Mar 2014, 11:23 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    I rarely pass on an opportunity to hammer a Democrat but I am also an American first and a Republican second and Waxman is doing the right thing here. I applaud his efforts.

     

    If anyone is naïve here, it is the people who believe it is perfectly acceptable for Americans to pay 93 times the price the Egyptians are paying for the same drug, or … those people who have made comments disparaging Congress for not protecting their investment in GILD.
    29 Mar 2014, 01:10 PM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    So being an "American first," do you want to control (nationalize) GILD pricing policy? Just appropriate their property? Make no mistake - that's all you can do, because you can't control EU or Egypt's government policies. When anyone anywhere takes that step the problem is born. What is naïve is to think that more control is a solution when that caused the problem to begin with. That biopharma companies can get the prices they do here in the U.S. is likely the only reason that innovative therapies are being developed at all. At least we agree that this is a terrible situation.

     

    The core issue is that anyone anywhere can legislate what companies charge for their products. Once that happens, companies adapt through the complex process of balancing volume and average selling price. Forget GILD. Any company selling worldwide has the same issue. INTC sells the exact same product for different prices in China, EU, U.S. etc. because of the same issue. Government policy decisions. "Fairness" is not a basic feature of the universe, and attempts to produce it via policy have never worked. I'm simply pointing out that you have not addressed the real problem. I don't have a solution either.
    29 Mar 2014, 01:49 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    Qniform, I’m not sure where you got the ideas of nationalizing industries or appropriating property; there’s nothing in my comments to suggest anything close to that.

     

    I’ve spent a good bit of my adult life outside the US and with the exception of Brazil, every country I have lived in or visited has brand name pharmaceuticals available at 10% to 15% of the cost you will find in the US. These drugs are available in the same brand name box with the same labels and description, albeit in a different language. I can assure you the pharmaceutical companies are not selling these drugs at a loss.

     

    I am well aware of the fact Big Pharma cannot research and develop new drugs without adequate profits; what I question is why Americans are expected to pay for all (or close to it) of this R&D while the rest of the world reaps the benefits of these medicines without sharing any of the burden. Many of the countries whose citizens benefit from these drugs have no problem stabbing the US in the back at any opportunity.

     

    America is well beyond bankrupt yet we’re still expected to solve all the world’s problems. This cannot and will not continue much longer.
    30 Mar 2014, 05:54 AM Reply Like
  • trustcamy
    , contributor
    Comments (7) | Send Message
     
    Quiform,

     

    Perhaps I can help you find a solution. There are two economic systems, free, self regulating markets is the first and preferred system by most economists. The drug industry does not operate in a free market by their own choice. Patents eliminate competition and guarantee single source pricing for the patent holder. In addition, big drug companies through lobbyists have secured statues in the US that prevent the federal government from negotiating prices on drugs for Medicare but not all government programs. Therefore, there is no "free market" for drugs. The government has laws preventing the importation of drugs from Canada and other countries to protect the established US prices for domestic drug companies. The only other economic system known to man is government regulation. The governments in other countries around the world can negotiate prices and they do not allow "unreasonable prices" for American drug companies. They control the pricing within their borders. Free markets are simply not allowed in most medical businesses in the US. That is why we consume about 18% of our GNP on health care and the Japanese consume a little less than 10%. People are going broke in the US trying to keep up with health care costs and the drug industry is one part of the problem.
    7 Apr 2014, 10:28 AM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    trustcamy, you have repeated my description of the situation, and I don't see a solution in what you say. BTW, there is one inaccuracy in your comment - patent protection (pretty much world wide) came along before this industry became what it is, so singling it out as receiving undue protection is unwarranted. As for the political clout you mentioned, the U.S. is the only place where freedom to influence government exists apparently. If one doesn't like the downside of that, there are places where you can give up that right and Americans also have the freedom to relocate - at least for the time being.

     

    I'm not surprised that any company fights to protect a source of profit. I've acknowledged the unfairness that this market supplies a disproportionate share of the profits which allow the benefits of R&D to continue, but I have seen no similar acknowledgement that the proposed "solutions" in these comments ignore the market realities which got us to this point.
    7 Apr 2014, 01:40 PM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    Brazil has nationalized health, which is (per se) a controlled price environment. Is the price paid manufacturers under the system sufficient to cover the all-in cost of R&D for specific and new replacement therapies as patent protections are lost (I agree that the costs to produce the drugs themselves are low)? Hypothetically, if the entire world charged the same as Brazil would it render biopharma companies profitless? Based upon the margins seen in the industry financials, the answer is unequivocal and affirmative. But these costs must be paid, and it isn't Brazil paying them. They have therefore appropriated property. That's just the way the world is working presently.

     

    "I can assure you the pharmaceutical companies are not selling these drugs at a loss." Unfortunately, in the above context your assurance has no demonstrated basis in fact. I have no answer for you why the U.S. should be footing the bill the way we are. While I agree it isn't fair, we can't fix this unilaterally. It's a global issue. In that way I simply point out that your "fix" is the global root of the problem if it involves legislating the price a company can charge for a product.
    30 Mar 2014, 05:39 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    Big Pharma has bought and paid for the Brazilian Congress, much like they have in the US. In many cases, you can’t even find a generic equivalent, so that eliminates the theory about controlled prices. They’ve paid off legislators to protect their products.

     

    I don’t believe these drugs are being sold in 3rd world countries at a loss, but if they are that only means Americans are not only paying for R&D, we’re subsidizing health care for foreign countries as well. That’s even worse.
    30 Mar 2014, 08:19 PM Reply Like
  • Qniform
    , contributor
    Comments (4489) | Send Message
     
    Clearly the money doesn't buy the high price you (rightly) decry in the U.S. You seem to finally get my point. Some markets subsidize others. Why do you think that is? If the subsidy which produces what profits there are were eliminated, would there be money available for R&D? In a fair world, all markets would share the cost in some rational way. But the policy decisions which have produced the present situation are not rationalized across markets. Anyway, I can be no more clear about how I see the situation, so I sincerely wish you good luck in investment (and healthcare).
    30 Mar 2014, 09:09 PM Reply Like
  • shoof@aol.com
    , contributor
    Comments (6) | Send Message
     
    What is not being mentioned is the approximate cost of existing, conventional treatment for Hep C which typically includes the administration of interferon for 46 weeks--and a 55% success rate. Today's cost for this latter use of toxic poison is $70,000. For the other half of patients who may ultimately require a liver transplant, that cost is closer to $1 million. Gilead's drug treatment is typically a 12 week deal with low incidence of side effects. Also, the idea that "most" drugs are discovered by taxpayer subsidized research shows a lack of understanding of the complexities of drug development and minimizes the risks that companies take for that often elusive reward. Let's also not forget that Gilead put the $84M cost as a list price... you may rest assured that negotiations with pharmacy benefit managers and other payors will whittle the price to some extent. Gilead shelled out $11 billion to get there hands on the drug, run more trials, and satisfy the FDA. In return, the world is getting a cure.
    1 Apr 2014, 03:04 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs