8 ms·

>In a letter to the Foster City, Calif., company Thursday, Rep. Henry A. Waxman (D-Beverly Hills) and two other Democratic lawmakers asked Gilead Chief Executiv

>In a letter to the Foster City, Calif., company Thursday, Rep. Henry A. Waxman (D-Beverly Hills) and two other Democratic lawmakers asked Gilead Chief Executive John C. Martin to explain the rationale for selling Sovaldi for $1,000 per pill. >Previous therapies for hepatitis C helped only about half of patients and had numerous side effects. In comparison, clinical trials of Sovaldi have shown cure rates approaching 90% with far fewer complications. I think that answers the question

harshreality 13y ago
No, it really doesn't. This is yet another magical medical care "retail price" that has little connection to reality. First, you can be sure that medicare, medicaid and private insurers have negotiated that price down. Second, Gilead itself offers a coupon to reduce co-pays to $5 per refill for health insurance plans that don't cover the entire cost of the prescription[1], up to 20% of the total cost (so it appears if you have a 20% out of pocket copay for prescription drugs, you pay $30 total instead of $16800). So, who is paying $84k? If it's like most other medical costs, the answer is only people who don't negotiate the price down first. The important aspect is that by charging $1000/pill retail, they probably get tax benefits from offering it for less, and anyone on a healthcare plan (if such plans still exist post-Obamacare) which caps lifetime expenditures who get the prescription get a good chunk ($84k) taken out of their lifetime healthcare coverage, which the insurer would love. To get to the bottom of it, it would be good to know: What are the typical prices (definitely average, median, and perhaps various other percentiles) that Giliad gets from these prescriptions? What does Gilead's internal accounting for the drug (separating R&D, advertising, and marginal costs) look like, and what are the tax consequences of inflating the sticker price? [1] https://www.sovaldi.com/copay-register.aspx https://www.sovaldi.com/copay-register.aspx
Xenmen 13y ago
I suspect there was research conducted by public universities to create this pill, IE that it was publically funded. The ethics of "I researched this I made this it's mine so you pay what I demand" is one thing. The ethics of collective research, where part or all of the actual labour is conducted by individuals who are working on the public dollar, or while studying (grad students are infamously used for most of the labour in university research), or have no residual income from the results of the research, or a mixture of the above. If university students did most of the work, is this company then justified for asking this price? We don't know whether any of this is the case. In our discussion, without additional research, our only metric should be "what are the manufacturing and distribution costs". The public health is the concern, first and foremost. If, for example, an illness reaches epidemic proportions, it's entirely reasonable for a government to step in and say "it is more important that citizens NOT DIE than that your company makes a profit". Hepatitis C is not at that stage anywhere in the US to my knowledge. I suspect that this drug just happens to be the straw that broke the lawmakers' back; they're arbitrarily choosing to make this particular drug the battleground for stopping a negative larger.
- alexeisadeski3 13y ago
  Ex post facto.

harshreality 13y ago

No, it really doesn't. This is yet another magical medical care "retail price" that has little connection to reality. First, you can be sure that medicare, medicaid and private insurers have negotiated that price down. Second, Gilead itself offers a coupon to reduce co-pays to $5 per refill for health insurance plans that don't cover the entire cost of the prescription[1], up to 20% of the total cost (so it appears if you have a 20% out of pocket copay for prescription drugs, you pay $30 total instead of $16800). So, who is paying $84k? If it's like most other medical costs, the answer is only people who don't negotiate the price down first. The important aspect is that by charging $1000/pill retail, they probably get tax benefits from offering it for less, and anyone on a healthcare plan (if such plans still exist post-Obamacare) which caps lifetime expenditures who get the prescription get a good chunk ($84k) taken out of their lifetime healthcare coverage, which the insurer would love. To get to the bottom of it, it would be good to know: What are the typical prices (definitely average, median, and perhaps various other percentiles) that Giliad gets from these prescriptions? What does Gilead's internal accounting for the drug (separating R&D, advertising, and marginal costs) look like, and what are the tax consequences of inflating the sticker price? [1] https://www.sovaldi.com/copay-register.aspx https://www.sovaldi.com/copay-register.aspx

Xenmen 13y ago

I suspect there was research conducted by public universities to create this pill, IE that it was publically funded. The ethics of "I researched this I made this it's mine so you pay what I demand" is one thing. The ethics of collective research, where part or all of the actual labour is conducted by individuals who are working on the public dollar, or while studying (grad students are infamously used for most of the labour in university research), or have no residual income from the results of the research, or a mixture of the above. If university students did most of the work, is this company then justified for asking this price? We don't know whether any of this is the case. In our discussion, without additional research, our only metric should be "what are the manufacturing and distribution costs". The public health is the concern, first and foremost. If, for example, an illness reaches epidemic proportions, it's entirely reasonable for a government to step in and say "it is more important that citizens NOT DIE than that your company makes a profit". Hepatitis C is not at that stage anywhere in the US to my knowledge. I suspect that this drug just happens to be the straw that broke the lawmakers' back; they're arbitrarily choosing to make this particular drug the battleground for stopping a negative larger.

alexeisadeski3 13y ago
Ex post facto.