Gilead Announces Access Program for Hepatitis C Drug

By Rachel Sachs

For all those who are interested in issues of global health, access to medicines, and drug pricing, yesterday Gilead formally announced its access program for enabling many developing countries to purchase its new Hepatitis C drug, Sovaldi, at low prices. This announcement is particularly noteworthy because Sovaldi represents a significant improvement over the current standard of care for Hepatitis C, as it can cure a much greater percentage of sufferers than could standard therapies, and it does so with many fewer negative side effects. Gilead’s partnership-based program will permit seven Indian generic drug companies to produce and sell the drug in 91 developing countries. The discounts are significant: although Gilead formally charges $1,000 a pill (or $84,000 for a course of treatment) for Sovaldi in the United States, it will charge just 1% of that, or $10 a pill, in India (the total cost there is estimated at $1,800, given the difference in strain prevalence).

The global health community has reacted to the announcement with mixed reviews. The 91 countries in the program include more than half of the world’s Hepatitis C patients. But tens of millions of other patients in large nations like China, Brazil, Mexico, and Thailand are left out of the program. Going forward, some of the excluded nations may seek to issue compulsory licenses in an effort to expand access to Sovaldi.

Gilead has also drawn fire in the United States for Sovaldi’s $84,000 sticker price (which, for various reasons, very few if any will actually pay), to the degree that members of both houses of Congress have asked Gilead to justify the price of the drug. Those opposing Sovaldi’s price have generally not come out publicly against the high price of many orphan drugs, which can cost $250,000-$350,000 per year. But because Hepatitis C afflicts about 2.7 million people in the US, as compared to the few thousand people with one of the relevant orphan diseases, its impact on insurers (both public and private) is likely to be much larger (as this very blog has previously noted). 

Sovaldi brings into stark relief several of the most complicated issues around drug pricing and reimbursement. To name just a few, it raises concerns about innovation and access for low-income patients (Hepatitis C is more concentrated among low-income individuals), the difficulty of valuing cures (if Sovaldi can prevent a patient from needing a more expensive liver transplant or treatment for cirrhosis, it’s likely to be quite cost-effective), and the fragmentation of our health care system (incentives are misaligned if you’re asking a private insurer to pay for Sovaldi now, when it’s Medicare that will be on the hook for the liver transplant later). Stay tuned for what I’m sure will be extremely interesting public policy developments!

The Petrie-Flom Center Staff

The Petrie-Flom Center staff often posts updates, announcements, and guests posts on behalf of others.

0 thoughts to “Gilead Announces Access Program for Hepatitis C Drug”

  1. Gilead’s Hepatitis C Medicines License – Troubling Territorial Exclusions, Illusory Exceptions, and Tiered Pricing Policies Fracture Global Access
    Professor Brook Baker, Northeastern U. School of Law, Senior Policy Analyst Health GAP

    Sept. 17, 2014

    Gilead has just released the text of its hepatitis C license. Although there has been some praise for Gilead offering expanded generic access in 91 countries where over 100 million people living with hepatitis C live, there has also been mounting criticism over its exclusion of 51 middle-income countries with 49 million infected. This paper closely analyzes the license to see what its impact might be, paying close attention to its definition of covered patent rights and illusory mechanisms that might eventually allow supply in some excluded territories. Gilead’s assertion of control over country sales and collection of royalties rests on a foundation of pending patent rights, including key patent applications in India that are being challenged. The limited coverage of the license will inevitably mean that generic markets and competition will not be a robust as they might have been. At the same time, Gilead is reserving the 51 excluded countries as “commercial markets” where it intends to grant price discounts over those charged in the US and Europe but still largely unaffordable to many patients and governments. It also intends to charge more in private market sectors than in government and NGO sectors. Gilead has gone part way, but not far enough and its territorial exclusions and protections of unperfected patent rights will undermine the beneficial impact of its license even in licensed territories. Not only will there not be universal access to affordable hepatitis C medicines, but the ultimate goal of eradication will be delayed by Gilead’s fractured approach.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.