3 ms·

If you treat rather than cure, in the case of a transmitted disease such as Hep-C, eventually you have no remaining market share since the disease is in essence

If you treat rather than cure, in the case of a transmitted disease such as Hep-C, eventually you have no remaining market share since the disease is in essence eradicated. In this light it makes sense that Sovaldi costs so much. Gilead needs to get back their research costs and make as much profit as possible while there is a market for their product. A lot of these profits are going back into their research costs for HIV; this is the next disease they are trying to cure. Even with a genetic non transmittable disease, such as Type 1 diabetes (which I have), there is less profit to be made with a cure and so there is a need to charge more for the product. Right now I have to pay monthly for 2 forms of insulin, needles, testing supplies, hormones, pain killers. Due to the long term circulatory, liver, and kidney problems that come with this I can look forward to increased costs from additional medications and treatments over time (think blood thinners, ace inhibitors, dialysis). On top of this there is all of the cost for recurring labs and other medical testing that I have to go through on average about once every 3 months. So yeah; give me one big expensive cure and a healthier future to look forward to and I will take that any day over "managed treatment" and control programs that will still lead to poor life conditions for me in the long run.

pkulak 12y ago
Exactly. These guys have essentially cured a major _viral_ disease. If they are wallowing in cash because of it, that's fine with me. Even if my premiums go up 2%. If the public sector is not going to do the work, there needs to be incentive for private corporations to lay out the millions required to advance medicine. We can't have near-zero public funding and then get all pissy when miracle cures are expensive. And this is very close to "miracle cure". I had Hep C when I was younger (blood transfusion) and I went on interferon and ribavirin, which was 6 months of daily (maybe twice daily, can't remember) shots. And I was told that there was still a very good chance that I would never be "cleared". And sure this is $1000 a pill, but that six months of shots was not cheap either. Probably at least half.
- tim333 12y ago
  Congrats to them to for curing a major disease but some bits of the economics seem a bit odd - initial research cost about $14m paid partly by tax payers. Gilead spends "tens of millions" to put it through trials and then it gets sold, partly back to the same tax payers, for about $84k * 3 million = ~ $200bn. ( http://www.bostonglobe.com/business/2014/05/31/costly-new-hepatitis-treatments-curing-patients-but-straining-health-care-system-finances/SmBE9NoUESxjfgphfqvXKL/story.html http://www.bostonglobe.com/business/2014/05/31/costly-new-he... )
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  - bigtunacan 12y ago
    Did you read that whole article, or just skim it? The piece where I am assuming you got your numbers from... "Federal grants and Pharmasset’s research outlays on Sovaldi totaled more than $14 million, but Gilead spent tens of millions more to shepherd the drug through clinical trials." That is only a tiny fraction of the cost invested by Gilead on this drug. If you read the whole article you would see that Gilead took a big risk and paid $11B to purchase Pharmasset before this drug had been approved so they could bring it to market. Their total cost is well over that by now. Now add to this the fact that when a pharmaceutical company makes a new "wonder drug", the other big pharma companies get right to work on make workable variants so they can get a piece of that pie. Take a look at GILD on Yahoo Finance sometime and you will notice they are remarkably flat lately despite great profit margins, P/E, etc... This is because investors are worried long term. A variant product could destroy the profitability; now add to that the government wants to get involved and start regulating the prices on this thing. PFFH

pkulak 12y ago

Exactly. These guys have essentially cured a major _viral_ disease. If they are wallowing in cash because of it, that's fine with me. Even if my premiums go up 2%. If the public sector is not going to do the work, there needs to be incentive for private corporations to lay out the millions required to advance medicine. We can't have near-zero public funding and then get all pissy when miracle cures are expensive. And this is very close to "miracle cure". I had Hep C when I was younger (blood transfusion) and I went on interferon and ribavirin, which was 6 months of daily (maybe twice daily, can't remember) shots. And I was told that there was still a very good chance that I would never be "cleared". And sure this is $1000 a pill, but that six months of shots was not cheap either. Probably at least half.

tim333 12y ago
Congrats to them to for curing a major disease but some bits of the economics seem a bit odd - initial research cost about $14m paid partly by tax payers. Gilead spends "tens of millions" to put it through trials and then it gets sold, partly back to the same tax payers, for about $84k * 3 million = ~ $200bn. ( http://www.bostonglobe.com/business/2014/05/31/costly-new-hepatitis-treatments-curing-patients-but-straining-health-care-system-finances/SmBE9NoUESxjfgphfqvXKL/story.html http://www.bostonglobe.com/business/2014/05/31/costly-new-he... )
- deleted 12y ago
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- bigtunacan 12y ago
  Did you read that whole article, or just skim it? The piece where I am assuming you got your numbers from... "Federal grants and Pharmasset’s research outlays on Sovaldi totaled more than $14 million, but Gilead spent tens of millions more to shepherd the drug through clinical trials." That is only a tiny fraction of the cost invested by Gilead on this drug. If you read the whole article you would see that Gilead took a big risk and paid $11B to purchase Pharmasset before this drug had been approved so they could bring it to market. Their total cost is well over that by now. Now add to this the fact that when a pharmaceutical company makes a new "wonder drug", the other big pharma companies get right to work on make workable variants so they can get a piece of that pie. Take a look at GILD on Yahoo Finance sometime and you will notice they are remarkably flat lately despite great profit margins, P/E, etc... This is because investors are worried long term. A variant product could destroy the profitability; now add to that the government wants to get involved and start regulating the prices on this thing. PFFH