An analysis by Express Scripts (ESRX +0.1%) shows the enormous potential costs confronting state Medicaid programs of paying for Gilead's (GILD +1.1%) HCV treatment Sovaldi. The $84,000 full regimen tab will put substantial budgetary pressure on many states like CA ($6.8B), TX ($5.4B) and FL (3.8B) if every HCV sufferer is treated.
Express Scripts estimates that more than 750K Medicaid patients have chronic HCV infections (total cost to treat with Sovaldi + ribavirin or Olysio (JNJ -0.5%) = ~$55B).
Despite Gilead's assertions that Sovaldi actually saves money by curing HCV and avoiding the costs of liver failure, Congress has launched an investigation into its pricing rationale. The company's previously announced plan to sell Sovaldi to Egypt for $900 potentially complicates its position.