Democrats Want to Grill Gilead in Public on Cost of $84,000 Pill

Jun 19, 2014 2:07 pm ET

June 19 (Bloomberg) -- Gilead Sciences Inc. should explain at a congressional hearing why a full course of its hepatitis C pill Sovaldi costs $84,000, two House Democrats said.

Gilead, the biggest maker of HIV drugs, hasn’t sufficiently explained its reason for Sovaldi’s price for the standard 12 weeks of treatment, U.S. Representatives Henry Waxman, a California Democrat, and Diana DeGette, a Democrat from Colorado, wrote today in a letter to House Energy and Commerce Committee Republican leaders.

The lawmakers are concerned that paying for Sovaldi will be a drain on Medicare after researchers said the drug will increase spending by as much as 8 percent, or $6.5 billion, next year in the government’s health plan for the elderly and disabled. The analysis from Georgetown University and Kaiser Family Foundation estimates 75,000 Medicare patients will get treated and notes other federal programs will get discounts. Gilead briefed Democrats in March on Sovaldi’s cost.

Sovaldi, which costs $1,000 a pill, is the first all-oral hepatitis C medicine on the market for some patients with a goal of being more convenient and effective than older treatments requiring injections. The drug cured 90 percent of patients in clinical trials with certain types of hepatitis, including the most common form. About 3.2 million Americans have chronic hepatitis C, which can cause liver cirrhosis, according to the Centers for Disease Control and Prevention.

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The company “did not provide a compelling justification for the high price they are charging for most patients,” Waxman and DeGette wrote Representatives Fred Upton, of Michigan, and Tim Murphy of Pennsylvania.

Upton is chairman of the energy and commerce committee and sets its agenda in the Republican-led House. Murphy is chairman of the committee’s oversight panel. Hearings would help them understand the implications of Sovaldi’s high cost, Waxman and DeGette wrote.

A spokeswoman for Foster City, California-based Gilead couldn’t immediately be reached for comment.

Gilead plans to discount the price in some other countries, though the U.K.’s health-cost regulator said this week it may reject the drug. The National Institute for Health and Care Excellence asked for more data on some patient groups before it decides whether to pay for the treatment. Sovaldi costs 34,983 pounds ($59,614) in the U.K., NICE said.

The drug’s cost also has attracted scrutiny from health insurers and pharmacy benefit managers. Companies including AbbVie Inc., Merck & Co. and Johnson & Johnson are competing to gain approval for hepatitis C pills in a market estimated at $20 billion.

--With assistance from Simeon Bennett in Geneva.