Hepatitis Hostages

Stockfresh image by stokkete

Stockfresh image by stokkete

In September of 2014, Gilead Sciences announced a deal with seven Indian drug companies to produce less expensive generics for their blockbuster Hepatitis C drug, Sovaldi. Gregg Alton, an executive vice-president for Gilead said: “This announcement is a game-changer. . . . The great thing is we are making this medication available to millions of people around the world.” Alton also said: “Gilead is working to make its chronic Hepatitis C medicines accessible to as many patients, in as many places, as quickly as possible.” The medication could be on the market in India by the third quarter of 2015. The licensing deal will cover 91 countries, which have an estimated 100 million people living with Hepatitis C. But the cost to Americans and the profits to Gilead for Sovaldi are through the roof.

Through the third quarter of 2014, Gilead has made $8.6 billion in profit from Sovaldi (see info here, here, and here.)—most of it from American sources. It is on schedule to exceed $10 billion in sales for 2014. This is largely because of the extreme cost differential of Sovaldi to Americans. The charge to US patients is $1,000 per pill; $84,000 for a full 12-week course of treatment with the drug. In June of 2014, Forbes contributor Robert Glatter reported that Gilead was offering Sovaldi at a 99% discount to countries like Egypt and India. The production cost for Sovaldi is somewhere between $130 and $150 per pill. Gardiner Harris of the New York Times reported that Gilead will introduce the drug in India for around $10 per pill.

Rohit Malpani, of Doctors Without Borders, observed that: “Gilead’s licensing terms fall far short of ensuring widespread affordable access to these new drugs in middle-income countries, where over 70 percent of people with hepatitis C live today.” Gregg Alton said that Gilead would provide middle-income countries with discounted prices for Sovaldi. “Pricing for Thailand, Mexico or Brazil will be very different than the U.S. price.”

As early as the spring of 2014, concern was that the cost of Sovaldi in the U.S. would lead to a huge rise in healthcare costs. There are over 3 million potential customers with Hepatitis C in the U.S. PharmExec.com reported in April that a large insurer, United Health Group, reported a decline in its first-quarter earnings, in part because it spent more than $100 million on hepatitis C treatments. In July, the Senate Finance Committee informed Gilead it was launching an investigation into the pricing of Sovaldi.

Given the impact Sovaldi’s cost will have on Medicare, Medicaid and other federal spending, we need a better understanding of how your company arrived at the price for this drug.

Gilead defends the price, citing the eventual cost savings over time. “The value of a cure … is underestimated in terms of the overall advantage that the health care system receives from it.” Yet some organizations are suggesting that treatment be withheld until the condition is more serious. The problem with that is determining how far Hepatitis C has progressed can be difficult. And there is evidence that early treatment means there is a better chance of curing Hepatitis C. Also, early treatment can avoid damage to the liver from the virus.

Withholding treatment is already a reality in the California prison system. The chief pharmacy officer of San Francisco’s Public Health Department said that if they used their entire drug budget for the year, they could only treat 24 or 26 of the 108 inmates estimated to be infected with Hepatitis C.  “It’s crazy. It’s just insane. And that’s where this whole conversation about price becomes important, because at what cost?” Nationwide, at least 500,000 inmates have chronic Hepatitis C. The net costs of their treatment alone could exceed $30 billion.

Now Gilead Science has had a new treatment for Hepatitis C approved—Harvoni. It is a combination of Solvadi and the NS5A inhibitor ledispasvir. Harvoni is “the first once-daily single tablet regimen for the treatment of chronic hepatitis C genotype 1 infection in adults.” The FDA granted Harvoni a Priority Review and Breakthrough Therapy designation because of its potential to offer a major advance in treatment over available therapies. Nezam Afdhal, a principle investigator in the Harvoni trials said: “For the first time, the vast majority of patients can be cured with a once-daily pill in only eight or 12 weeks.”

The cost of Harvoni will be $94,500 for a full 12-week course of treatment. But that is roughly in line with the previous cost of Sovaldi and the drugs used with it. “Many patients should be able to take Harvoni for only eight weeks, at a cost of about $63,000.” The shorter time period can be considered for treatment-naïve patients without cirrhosis.

But the cost is still too high for many insurance companies and Medicaid programs, who are restricting the use of Sovaldi to the most seriously ill patients. Some are requiring patients to demonstrate they have not abused alcohol or illicit drugs for a number of months or limiting the treatment to “once-in-a lifetime.” Dr. Steven Miller, the chief medical officer of Express Scripts, which manages pharmacy benefits for employers and insurance companies, said: “Their budgets just are not going to be able to tolerate it.”

The small population argument justifying a high cost of drug treatment (to motivate the drug’s development) like that used for drugs like Acthar and Soliris doesn’t apply to Sovaldi and Harvoni. If every American with Hepatitis C was treated with Sovaldi, the cost would be $250 BILLION! Treating everyone on the planet would cost $14.28 TRILLION. “To put those numbers in perspective, the U.S. spent about $381 billion on prescribed medicine last year.” Gilead defended the cost of the medicine, saying: We believe the price of Harvoni reflects the value of the medicine.” The Motley Fool suggested that Harvoni could generate as much as $12 billion in its first full year on the market.

Even when factoring in the negative impacts of competition, shortened treatment durations, and the need for additional approvals, Harvoni should still double the marijuana industry’s 2018 revenue forecast by this time next year.

Gilead Sciences announced its third quarter financial results for 2014. Gilead’s total revenues for nine months ending on September 30th was $17.25 billion. This compared to $7.76 billion for the same period in 2013. $7.33 billion of the $8.6 billion in sales of Sovaldi for 2014 was made in the U.S. market.

Plain and simply, the American health care system and Americans with Hepatitis C are being held hostage by Gilead Sciences. In their pursuit of record-breaking profits from Sovaldi and Harvoni, Gilead is creating a health care crisis by refusing to negotiate a more reasonable cost to Americans. See my previous articles, “Is There No Balm in Gilead?” and I Guess I’m a Little Bit Socialist,” for more on Gilead Sciences and Sovaldi.


I Guess I’m a Little Bit Socialist

Aaron (not his real name) walked into my office and said he needed my help. We were the two therapists scheduled to work that weekend with the inpatient adolescent unit at a drug and alcohol treatment center. He had been in an individual session with a sixteen year-old Hispanic girl who was always getting into trouble; usually from losing her temper. For weeks he’d been trying to get her to open up and talk about what was behind her anger. And she finally decided to tell him—she had witnessed the ritual killing of an infant.

We knew she had been a runaway with a guy in his forties and thought we had a pretty good guess of what her past trauma issues were. But we were way off. Aaron and I were friends and part of the same bible study. I‘d heard his testimony and knew that his commitment to Christ came after the accidental drowning of his young son. When he heard what the Hispanic girl had to say, all his past grief and loss came back to him.

He took me back to his office and he told her why I was there; he was just too close to his own loss to help her just then. We listened to her story of being forced to witness the ritual killing and I helped her as best I could with the memories and feelings she expressed. She kept crying and repeating how bad she felt for the baby; the baby. In closing the session, I told her that Aaron and I would pray for the dead infant and she could too if she wanted. We were not Roman Catholic, but knew that the girl was. So the prayer was intended to give her a time of closure with what she had just shared with us. We prayed; and she did also, asking God to protect and care for the dead baby.

The girl was placed on suicide watch; we told other staff about what she had disclosed. In a day or two there was a treatment review of the incident by the newly hired treatment director and newly appointed facility administrator. Our center had been recently bought by a much larger corporation. Aaron said later that everything went fine with the review—until he told them of the closing prayer we had done. Then our new bosses suddenly wanted to go over the whole thing again with a fine-toothed comb.

We had been therapeutically on the money. There wasn’t anything that could be said to be clinically wrong with what we did. But Aaron and I were told in no uncertain terms to never pray with anyone ever again. I distinctly thought that if they could have pointed to anything out of order, it would have been used to fire us on the spot. I’ve always thought that one of the greatest ironies of this was that the administrator was a former minister. It was after this incident that I began to think it was time for me to move on and I did. I went to seminary.

I didn’t stay in touch with Aaron over the years. But I ran into a mutual friend at a Christian counseling conference last year. The friend had taught the bible study Aaron and I were part of. He also had been the former director of treatment let go at our facility. The new corporate owners came in with their new treatment direction and he hadn’t been part of their plans. We caught up on what had been happening in each others lives and I began asking about other people from that time. My friend told me that Aaron had died a couple of years ago because of complications from hepatitis C. Even though we hadn’t been in touch, I still felt the loss.

Recently I posted two links on Facebook about an outrageously expensive treatment for hepatitis C, Sovaldi, which is listed to cost $1,000 per pill. Both times I received comments justifying the cost by pointing to the right of the drug company Gilead Science to charge what they consider a competitive market price; that the company has to recoup its research and development costs, etc. The first time I was upset enough to impulsively delete the person’s comments. That led to me being “unfriended.” The second time, I responded by posting links indicating how drug companies have been shown to carry out a misleading campaign to justify their profits to fund expensive, “risky” research and development. Here the organization, Public Citizen, was noted to be in favor of government control of the economy and therefore socialist.

A Yahoo News report indicated: “An estimated 15,000 people died from hepatitis C in the U.S. in 2007, when it surpassed AIDS as a cause of death.” Health care costs related to hepatitis C are expected to increase 1,800 percent by 2016. Additionally, more than a dozen European countries are joining forces to negotiate a lower rate for the drug treatment. And two U.S.  senators have written to the Gilead chief executive, saying: “the pricing had raised serious questions about the extent to which the market for this drug is operating efficiently and rationally.”

So I guess when it comes to Hepatitis C treatment, I’m a little bit socialist. Either that or I take profiteering by drug companies personally. Probably both. Rest in peace Aaron.

Do you think the costs of some medical treatments should be regulated?

Also read, “Is There No Balm in Gilead?”


Is There No Balm in Gilead?


balm of Gilead in an olive wood scoop. marilyna / 123RF Stock Photo

I’ve always felt there was great irony in the fact that my favorite concert memory turned out to be a way of enabling David Crosby’s drug habit. When David Crosby and Kenny Rankin came to the Syria Mosque in Pittsburgh, I made sure I had tickets. Kenny Rankin sang his cover of the Beatles song: Blackbird. David Crosby came on stage with just his acoustic guitar and went through many of his hits with CSN&Y (Crosby Stills, Nash and Young for those born after the Boomer generation). It was great. Then I read in a magazine about David Crosby’s cocaine problem. In the article, Crosby described how he arranged quick solo acoustic concert tours when he was running low on drug money.

In a Rolling Stone interview, David Crosby reflected on his unlikely survival: “‘I don’t know why I’m alive and Jimi isn’t and Janis isn’t and Mama Cass isn’t and all my other friends,’ says Crosby. ‘I have no idea why me, but I got lucky.’” Well he hasn’t been as lucky with his health. He had hepatitis C and needed a liver transplant in 1994. Phil Collins paid for his transplant.

Typical treatment for hepatitis C is 6 to 12 months of a drug cocktail consisting of interferon and ribavirin plus a protease inhibitor. Interferon treatment has both physical and psychiatric side effects. Physical side effects can include flu-like symptoms (41 to 70%), nausea (29 to 46%), anorexia (21 to 32%), and diarrhea (22%). Psychiatric side effects can include: depression (22 to 36%), irritability (24 to 35%), and insomnia 37 to 40%).  Suffice it to say that treatment is not very pleasant.

When I heard the announcement about Gilead Science’s new drug Sovaldi being approved in December of 2013, I was pleased and encouraged. Sovaldi sounded like a real medical break through. It blocks a specific protein needed by the hepatitis C virus to replicate. When Sovaldi is used in conjunction with existing hepatitis C medications such as ribavirin and peginterferon-alfa, a study showed that 12 weeks after the end of the 12 to 24 week treatment regimen, 91% of untreated hepatitis C patients tested negative for hepatitis C!

This is simply amazing. Many of the people I’ve known that began interferon treatment stopped at some point because of the side effects. They simply can’t go on with their daily lives because of the medications. If Sovaldi can cut the treatment time in half and provide a 90% “cure” rate, more people will get and complete treatment.

So it seemed Gilead Science was attempting to live up to its name. Gilead Science’s name and logo intentionally uses the Biblical reference to the balm of Gilead. Gilead was a mountainous region east of the Jordan River that was famous for it healing ointment. The chorus of a classic spiritual, “There is a Balm in Gilead,” goes:

There is a balm in Gilead,

To make the wounded whole;

There is a balm in Gilead

To heal the sin-sick soul.

The existing cost for standard hepatitis C treatment (combination interferon and ribavirin therapy) before Sovaldi was steep, between $10,000 and $12,000. Maybe Sovaldi was going to be the “Hep C balm from Gilead”—or not. I was outraged to see that Gilead was charging $1,000-a-pill for Sovaldi.   A full course of Sovaldi costs $84,000. The full treatment for Hepatitis C will cost over $90,000! And get this—Sovaldi costs about $130 to manufacture.

Other industrialized countries are paying roughly half of the $84,000 cost for Sovaldi. Third world countries like Egypt and India get a 99% discount. According to Dr. Steve Miller on Forbes.com, “Hepatitis C patients in the U.S. are mostly uninsured, underinsured and/or incarcerated. Medicaid, the VA and our prison system bear the brunt of the cost impact, and by extension so do all of us as taxpayers.” So it would seem that in the U.S. there is a balm from Gilead—but you’re going to pay through the nose for it.

Is there no balm [for hepatitis C] in Gilead?

Is there no physician there?

Why then has the health of the daughter of my people

not been restored? (Jeremiah 8:22)

Yes, there is a Hep C balm in Gilead; and yes, there are physicians there to oversee the treatment. But the health of the daughter of your people will not be restored if she doesn’t have good health insurance, or someone like Phil Collins able and willing to make up your financial shortfall.

By the way, first quarter total sales in 2014 for Gilead’s Hep C balm was $2.27 BILLION. It was the fastest drug launch on record.  The Senate Finance Committee is inquiring about the drug. They have requested information for documents related to research and development costs of Sovaldi. Karen Ignagni, chief executive of the trade group America’s Health Insurance Plans, noted that treating all hepatitis C patients would cost $268 billion, which is $5 billion more than was spent on all prescription drugs in 2012. “This pricing, which Gilead attempts to justify as the cost of medical advancement, will have a tsunami effect across or entire health-care system.”

Is it profiteering to have such a high mark up on drugs like Sovaldi? 

Also read, “I Guess I’m a Little Bit Socialist.”