13 ms·

A new drug costs $1,125 per pill and is about to break sales records

38 points by Libertatea 12y ago

ardit33 12y ago
Solvadi's patent is being challenged in India. I hope it is not granted, and generics come on board. A cure would cost about $120 instead of the $64-$80k will cost in the US. If India is smart, they can turn it into well organized medical tourism. Come and see India, get cured, and save $60k.
- melling 12y ago
  Don't they have a valid patent? Why don't you think it should be granted?
  - PhasmaFelis 12y ago
    Perhaps they're more concerned about human lives than maximizing corporate profits. I realize it's not a popular viewpoint.
    - melling 12y ago
      If they are concerned then they should do the research. It's pretty lame to have someone else spend billions of dollars of their money then simply take their work. Companies wouldn't stay in business with your model, and we wouldn't get new medicines. I would greatly welcome another option where governments or the public funded more medicines then licensed them cheaply.
      - junto 12y ago
        Your point is of course correct within the confines of the current market system. Is the current system moral though? I would argue it isn't. The system is designed to bolster the rich's coffers (countries) and getting rich people healthy, whilst poor countries are unable to pay. These countries can't afford to pay for such investment. The capital imbalance is just huge. Here's my take on this: any drug that is developed by country A has to sell that drug at a rate related to countries B's GDP ratio to A, or allow an open generic license to country B. Thus, should a firm decide to charge $1000 a pill in the US, they have to charge a proportionate and fairer amount to a country like Bangladesh. Whether better access to health services and drugs, many of these third world countries would start to move out of the more that they are currently in. Of course there a huge numbers of variables but I as a share holder would prefer not to see children dying of diseases that could be prevented if it wasn't expensive. Naturally firms like Gilead are going to use market economics to determine the correct price for each country anyway. Something is better than nothing right? Generics are more a solution for long running patents, which I'm personally against when it comes to drug development.
        melling 12y ago
        You aren't offering any solution to other countries contributing to the development of new medicines. India developed their Mars mission for $74 million dollars. That's a fraction of the US cost. Why can't they develop new medicines for a fraction of the cost? The idea is to increase research at a global level, and have everyone contribute.
        schiffern 12y ago
        >The idea is… Whose idea is that? Who profits from its promotion? Let's not forget that rights to ideas are inventions, not natural rights. >It has been pretended by some, (and in England especially,) that inventors have a natural and exclusive right to their inventions, and not merely for their own lives, but inheritable to their heirs. But while it is a moot question whether the origin of any kind of property is derived from nature at all, it would be singular to admit a natural and even an hereditary right to inventors. >It is agreed by those who have seriously considered the subject, that no individual has, of natural right, a separate property in an acre of land, for instance. By an universal law, indeed, whatever, whether fixed or movable, belongs to all men equally and in common, is the property for the moment of him who occupies it, but when he relinquishes the occupation, the property goes with it. Stable ownership is the gift of social law, and is given late in the progress of society. >It would be curious then, if an idea, the fugitive fermentation of an individual brain, could, of natural right, be claimed in exclusive and stable property. If nature has made any one thing less susceptible than all others of exclusive property, it is the actions of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. >Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. >Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody. Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices. >Considering the exclusive right to invention as given not of natural right, but for the benefit of society, I know well the difficulty of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not. As a member of the patent board for several years, while the law authorized a board to grant or refuse patents, I saw with what slow progress a system of general rules could be matured. -- Thomas Jefferson, 1813 http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12.html http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12....
      - belorn 12y ago
        You mean like the US$26.4 billion of tax money the US government is spending on medical research per year? Imagine a world where companies only stood for the cost of funding research. No more 26.4 billions per year. No more tax funded universities for medical research. No more donations or foundations that give grants. The result would be that no one would get any new medicines and the medical industry would loudly cry for government intervention. And that is with patents, a government granted monopoly. A way to "farm taxes", as it has been described historically.
    - stefantalpalaru 12y ago
      Of course it's not popular. Health is a privilege of the wealthy, not a right for lazy peasants not yet enlightened by Ayn Rand. /s
- refurb 12y ago
  The patent is not being challenged in India. The company (Gilead) already entered into an agreement with a number of India drug companies to provide Sovaldi for $900 per treatment (vs. the $84,000 in the US).
marrone12 12y ago
For a second, I was hoping this was European and it was 1 and 1/8th dollars.
- geographomics 12y ago
  Funny you should mention that, as in the United Kingdom each pill would only cost the end user ~29p (about half a dollar) thanks to our National Health Service capping the price of a prescription. Interestingly, it 'only' costs the equivalent of $650 per pill for the NHS to purchase [1], rather than the $1125 cited in the article. I expect it used its buying power to negotiate a more favourable price - yet another benefit of this nationalised, socialised health care system. [1] According to the British National Formulary.
eliben 12y ago
Is it only me that finds it depressing that modern journalism would try to stir a controversy around the drug's price instead of celebrating a new and better cure for a disease that only had much worse, and no less expensive, cures in the past?
- RodericDay 12y ago
  If the comment section is to be believed, this was in large part funded by the government and a good example of "socialized costs, privatized profits". So, no? It seems perfectly apt.
  - refurb 12y ago
    The comment section is not to be believed. The cost to develop Sovaldi was chiefly born by private investors. I don't know the details, but there may have been publicly funded research that helped discover the drug, but that is likely a fraction of the hundreds of millions of dollars it cost to develop. A good analogy would be to say that since the US gov't created the internet, Google shouldn't be charging much money at all for its services. EDIT: It appears that the discovery of sofosbuvir (Sovaldi) was done at a private company.[1] Of course it never would have been discovered without the work of NIH funded research, but it's unfair to say the cost of R&D was born by the public. [1]http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Antiviral_Drug/Sofosbuvir%20discovery%2010.pdf http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Anti...
  - nemo 12y ago
    It's a little different than that. The first drug, Solvadi, was developed by the company Pharmasset. Pharmasset did get some government grants to develop Solvadi, though the cost to develop the drug was much higher than the amount of the grants. Gilead paid a massive amount to buy out Pharmasset with the plan of recouping the elevated buyout costs by charging a huge sum for Solvadi. They could have paid much less to buy out Pharmasset and charged far less for the drug, but chose profit over any other interest. Pharmasset had been planning to sell Sovaldi (and the new drug) for a tiny fraction of what Gilead is now charging. The new drug, Harvoni, is a refinement of Sovaldi Pharmasset was working on. While Gilead is already fairly close to recouping their buyout money, they are charging even more for Harvoni. The costs are being taken from the public in that many Hep. C patients are too poor to have insurance so Medicaid is giving a huge amount of cash to Gilead, though the initial research grants were only around $1 mil.
deleted 12y ago
[deleted]
- melling 12y ago
  Well, that's what the world has come to. India, for example, can't or won't pay for new drugs so the drug companies need to adapt. Companies need to be paid for their work. What would be a better system? Why can't India develop newer drugs, for instance, then release them cheaply? It should be give and take, not just take.
  - zaroth 12y ago
    Or more likely, India develops the drug and give it away freely in India while still charging Americans the $84,000? I think it's because to sell the drug in the US costs billions of R&D even if it's done in India. There's no shortcut. I personally am happy the market supports these massive and risky R&D to occur based on windfalls for successful drugs. There's no known better model to encourage the necessary investment. Also, keep in mind, this is a treatment which is overall lowering the cost of this disease very significantly. It results in spending a fraction of the cost of chronic care for Hep C. But yes the bill hits all at once instead of over 20 painful years for the patient.
    - melling 12y ago
      You don't know that for sure. India's Mar's mission only cost a fraction of what it would cost NASA. In fact, it cost about as much as a Hollywood movie. http://money.cnn.com/2014/09/25/news/india-mars-cost/ http://money.cnn.com/2014/09/25/news/india-mars-cost/ India definitely wants to grow its economy. Selling expensive drugs to the US and Europe couldn't hurt. Look at China, for example. They built 10,000 miles of high-speed rail for about 3x what the few hundred miles of HSR will cost in California. They built a maglev train for $1.2 billion. This couldn't be done for nearly the same price as the US. http://en.wikipedia.org/wiki/Shanghai_Maglev_Train http://en.wikipedia.org/wiki/Shanghai_Maglev_Train India is where most generic drugs are made. India is the biggest supplier of generic drugs to the US. http://blogs.wsj.com/corporate-intelligence/2014/05/14/why-more-indian-generic-drugs-will-make-their-way-to-the-u-s/ http://blogs.wsj.com/corporate-intelligence/2014/05/14/why-m... Why not move into a more profitable business?
Mz 12y ago
This is getting depressingly common. I don't know the answer to this problem. There is a super expensive treatment for cystic fibrosis that only helps about 5% of the population and is something like a quarter million dollars a year and is not a cure. People with CF almost never have that kind of money. Unless they were born into a very wealthy family, having one family member with CF is such a huge financial and practical burden on the family that most folks with this in the family are not financially comfortable. Some of them are incredibly destitute. I get that these very expensive pills are sort of "miracle cures" and the price is intended to reflect that fact and cover the high costs of development and all that, but this is a fundamentally broken system. I don't know what the world needs to do here, but this is just crazy.
- maxerickson 12y ago
  Some of that cost got funneled back into CF research: http://www.cff.org/aboutCFFoundation/NewsEvents/11-19-Expansion-of-Research-and-Programs.cfm http://www.cff.org/aboutCFFoundation/NewsEvents/11-19-Expans... (I guess you mean Ivacaftor, the Cystic Fibrosis Foundation sold their royalty rights for $3.3 billion.) To a large extent, the insurance companies are setting the prices on these drugs (getting charged whatever the max they will pay). I think part of the solution might be somewhat counter intuitive, to throw even more resources at the early stage research, with the hope that there is more competition by the time things make it to patients.
  - Mz 12y ago
    According to other people more in-the-know than I am, the CF Foundation is basically in bed with big pharma. They are not really looking for better care for people with CF. They are looking specifically for better drugs. So, most likely, that money is being funneled back into more drug research -- more of this type thing. I am not so sure that's really some kind of silver lining.
    - maxerickson 12y ago
      I posted the cost part of the comment because I was pondering structural incentives and in that context, found out that particular drug had a foundation partner. I wasn't necessarily trying to weigh in on the good or the bad of it. Short of gene therapy, addressing the defective protein is pretty much going to be done with drugs, so I don't find it particularly telling that they are putting resources there. CFF does seem to be involved in clinical care (but I'm not informed enough to figure out how much of that is self promotion and how much is substantive). Anyway, the main point I had intended was that the price isn't just a function of what the company wants it to be, the buyers have to be willing to pay it (which sounds gross when talking about health care, but national health systems and insurance companies do worry some about whether treatments are worth what they cost).
pinaceae 12y ago
this is such a breakthrough in modern medicine. this is a CURE of a longstanding disease, a disease which cuts off years of life expectancy of it victims. there are more of them incoming, Hep C soon have a multitude of awesome drugs covering it. competition means drug prices will come down. the current massive price is a blip. at the very worst until the patent expires. there is even more, cooler stuff in the pipelines right now. there is a leukemia drug that goes after a rare form of it - with survival rates in its patients now at 95+%. think about what this means. after a glut, modern medicinal research has kicked into high gear. the FDA has a fast track program now. 10 years from now we'll be living in a very different world.
- zanny 12y ago
  > 10 years from now we'll be living in a very different world. Only if you are rich enough to afford it. That is where the outrage comes from - in most of the world healthcare and a right to life is considered a human right. In the US, current IP rights and drug policy will enable the exploitation of anyone who gets any major disease for all their are worth and then you can hang them out to die without treatment. It isn't the fault of the drug manufacturers though, they are profit seeking and work in their investors interests, who gave millions over years or decades and expect returns. You can and should blame the legal framework that prevents free market drug manufacturing through monopoly patents that lets people die because they cannot afford new drugs to cure their ailments.
  - adventured 12y ago
    There's no such thing as a right to own the productivity of other human beings. Even if the FDA provided a more efficient process, it would still cost hundreds of millions and take a decade to develop drugs like these. In what scenario should all of these scientists be working for free? And the equipment makers, and their employees; and on down the chain it goes. The only sane approach in the socialized medicine world, would be for the government to offer a one-time buyout for such breakthrough drugs. If your theory worked so well, socialized medicine countries would produce the most drug innovation and breakthroughs, their science and production would dwarf the US to such an immense degree it would put every pharma and biotech company in the US out of business rapidly. And yet, nothing of the sort has happened. Quite the opposite, the US has been the center of the pharma & biotech world for decades. The rich always subsidize breakthroughs, and their subsidization makes the next iterations affordable for the masses. The same pattern holds true in nearly everything.
jeffdavis 12y ago
This is a bad business plan. Sure, they make a lot of money now, but they are curing all of their customers. Soon they won't have any left. Typical shortsighted focus on profits this quarter, without a sustainable business model.
- adventured 12y ago
  I assume this is a snark comment, but it is a fascinating discussion. Typically it's claimed big pharma & co. intentionally withhold, avoid creating, or would never pursue cures because it's not good for business. Then when they finally produce a cure, people get upset about the price. Short of being a non-profit or charity, they're damned if they do / don't. I think if Gilead can input $1 billion for development, and yield $100 billion on a cure (minus some comparatively modest marketing expenses), that's an excellent business model. ($80k * 1.x million hep c patients in the US that get their cure; assuming only a portion of the 3.x million in the US end up taking Gilead's drugs)
jrapdx3 12y ago
Two thoughts about these Hep C drugs. First, I agree we should celebrate the advent of the potential cure for a devastating viral disease. Second, while the costs are considerable, expense is not out of line with many other treatments that are not making the headlines. Check into the costs of renal transplantation. And my wife recently had a cataract replaced, a commonplace procedure, the final bill was >$5000. The issue is the real total costs of treating vs. not treating the disease. It's necessary to take into account the costs of doctor visits, medications, disability, loss of productivity, increased likelihood of illness among family members due to stress, among many other factors. If a patient can be restored to adequate functionality, and after the Hep C treatment require no more than routine health care, the $84K might in fact be a bargain. Until we get it clear that we must consider the true total costs of fully treating vs. not treating an illness, we will never be able to make rational decisions about structuring a health care system. Unless proven otherwise, I'm convinced the system with the lowest total cost is providing care that patients actually need. We only make matters worse by the focus on "cutting health care costs" vs. reducing the total economic burden of illness.
- east2west 12y ago
  I appreciate what you are trying to do, but I cannot agree with determining the cost of a drug based on potential loss of income/productivity. Should the CEOs therefore get first dips on life saving treatment because they have big impact on his/her employees? Do patients in developed countries have an economic right to better treatment first than people in developing countries? Are some lives worth more than others? I don't think we are ready to go down this route. Incidentally, a very expensive drug is posing these questions, implicitly. But explicit statements like yours are not politically practical or even humane. Ten years ago it was outrageous to hear a nurse to tell a kid's parents to pay up or watch their only child die.
  - Houshalter 12y ago
    That's not what parent comment is arguing at all. But I don't see why not. Money very likely correlates with value to society and would be a better heuristic than pure randomness - which is also unfair. Although hopefully it never becomes an issue of course - these hypothetical situations where we get to actually choose who lives and dies rarely happen in reality. And obviously it violates cultural values, so would not be a good idea to actually try to implement.
rokhayakebe 12y ago
Does anyone know the cost of development?
snarfy 12y ago
My wife's current medication: http://en.wikipedia.org/wiki/Alemtuzumab http://en.wikipedia.org/wiki/Alemtuzumab When sold to treat MS it has a 10000 x markup over the same medication sold to treat cancer.
- refurb 12y ago
  The reason for this is that you can't have two different prices for two different diseases when it's the same drug. The company decided to stop selling it for cancer (they now give it away for free) to optimize for the MS market.

38 points by Libertatea 12y ago

Solvadi's patent is being challenged in India. I hope it is not granted, and generics come on board. A cure would cost about $120 instead of the $64-$80k will cost in the US. If India is smart, they can turn it into well organized medical tourism. Come and see India, get cured, and save $60k.

melling 12y ago
Don't they have a valid patent? Why don't you think it should be granted?
- PhasmaFelis 12y ago
  Perhaps they're more concerned about human lives than maximizing corporate profits. I realize it's not a popular viewpoint.
  - melling 12y ago
    If they are concerned then they should do the research. It's pretty lame to have someone else spend billions of dollars of their money then simply take their work. Companies wouldn't stay in business with your model, and we wouldn't get new medicines. I would greatly welcome another option where governments or the public funded more medicines then licensed them cheaply.
    - junto 12y ago
      Your point is of course correct within the confines of the current market system. Is the current system moral though? I would argue it isn't. The system is designed to bolster the rich's coffers (countries) and getting rich people healthy, whilst poor countries are unable to pay. These countries can't afford to pay for such investment. The capital imbalance is just huge. Here's my take on this: any drug that is developed by country A has to sell that drug at a rate related to countries B's GDP ratio to A, or allow an open generic license to country B. Thus, should a firm decide to charge $1000 a pill in the US, they have to charge a proportionate and fairer amount to a country like Bangladesh. Whether better access to health services and drugs, many of these third world countries would start to move out of the more that they are currently in. Of course there a huge numbers of variables but I as a share holder would prefer not to see children dying of diseases that could be prevented if it wasn't expensive. Naturally firms like Gilead are going to use market economics to determine the correct price for each country anyway. Something is better than nothing right? Generics are more a solution for long running patents, which I'm personally against when it comes to drug development.
      - melling 12y ago
        You aren't offering any solution to other countries contributing to the development of new medicines. India developed their Mars mission for $74 million dollars. That's a fraction of the US cost. Why can't they develop new medicines for a fraction of the cost? The idea is to increase research at a global level, and have everyone contribute.
        schiffern 12y ago
        >The idea is… Whose idea is that? Who profits from its promotion? Let's not forget that rights to ideas are inventions, not natural rights. >It has been pretended by some, (and in England especially,) that inventors have a natural and exclusive right to their inventions, and not merely for their own lives, but inheritable to their heirs. But while it is a moot question whether the origin of any kind of property is derived from nature at all, it would be singular to admit a natural and even an hereditary right to inventors. >It is agreed by those who have seriously considered the subject, that no individual has, of natural right, a separate property in an acre of land, for instance. By an universal law, indeed, whatever, whether fixed or movable, belongs to all men equally and in common, is the property for the moment of him who occupies it, but when he relinquishes the occupation, the property goes with it. Stable ownership is the gift of social law, and is given late in the progress of society. >It would be curious then, if an idea, the fugitive fermentation of an individual brain, could, of natural right, be claimed in exclusive and stable property. If nature has made any one thing less susceptible than all others of exclusive property, it is the actions of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. >Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. >Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody. Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices. >Considering the exclusive right to invention as given not of natural right, but for the benefit of society, I know well the difficulty of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not. As a member of the patent board for several years, while the law authorized a board to grant or refuse patents, I saw with what slow progress a system of general rules could be matured. -- Thomas Jefferson, 1813 http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12.html http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12....
    - belorn 12y ago
      You mean like the US$26.4 billion of tax money the US government is spending on medical research per year? Imagine a world where companies only stood for the cost of funding research. No more 26.4 billions per year. No more tax funded universities for medical research. No more donations or foundations that give grants. The result would be that no one would get any new medicines and the medical industry would loudly cry for government intervention. And that is with patents, a government granted monopoly. A way to "farm taxes", as it has been described historically.
  - stefantalpalaru 12y ago
    Of course it's not popular. Health is a privilege of the wealthy, not a right for lazy peasants not yet enlightened by Ayn Rand. /s
refurb 12y ago
The patent is not being challenged in India. The company (Gilead) already entered into an agreement with a number of India drug companies to provide Sovaldi for $900 per treatment (vs. the $84,000 in the US).

marrone12 12y ago

For a second, I was hoping this was European and it was 1 and 1/8th dollars.

geographomics 12y ago
Funny you should mention that, as in the United Kingdom each pill would only cost the end user ~29p (about half a dollar) thanks to our National Health Service capping the price of a prescription. Interestingly, it 'only' costs the equivalent of $650 per pill for the NHS to purchase [1], rather than the $1125 cited in the article. I expect it used its buying power to negotiate a more favourable price - yet another benefit of this nationalised, socialised health care system. [1] According to the British National Formulary.

eliben 12y ago

Is it only me that finds it depressing that modern journalism would try to stir a controversy around the drug's price instead of celebrating a new and better cure for a disease that only had much worse, and no less expensive, cures in the past?

RodericDay 12y ago
If the comment section is to be believed, this was in large part funded by the government and a good example of "socialized costs, privatized profits". So, no? It seems perfectly apt.
- refurb 12y ago
  The comment section is not to be believed. The cost to develop Sovaldi was chiefly born by private investors. I don't know the details, but there may have been publicly funded research that helped discover the drug, but that is likely a fraction of the hundreds of millions of dollars it cost to develop. A good analogy would be to say that since the US gov't created the internet, Google shouldn't be charging much money at all for its services. EDIT: It appears that the discovery of sofosbuvir (Sovaldi) was done at a private company.[1] Of course it never would have been discovered without the work of NIH funded research, but it's unfair to say the cost of R&D was born by the public. [1]http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Antiviral_Drug/Sofosbuvir%20discovery%2010.pdf http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Anti...
- nemo 12y ago
  It's a little different than that. The first drug, Solvadi, was developed by the company Pharmasset. Pharmasset did get some government grants to develop Solvadi, though the cost to develop the drug was much higher than the amount of the grants. Gilead paid a massive amount to buy out Pharmasset with the plan of recouping the elevated buyout costs by charging a huge sum for Solvadi. They could have paid much less to buy out Pharmasset and charged far less for the drug, but chose profit over any other interest. Pharmasset had been planning to sell Sovaldi (and the new drug) for a tiny fraction of what Gilead is now charging. The new drug, Harvoni, is a refinement of Sovaldi Pharmasset was working on. While Gilead is already fairly close to recouping their buyout money, they are charging even more for Harvoni. The costs are being taken from the public in that many Hep. C patients are too poor to have insurance so Medicaid is giving a huge amount of cash to Gilead, though the initial research grants were only around $1 mil.

deleted 12y ago

[deleted]

melling 12y ago
Well, that's what the world has come to. India, for example, can't or won't pay for new drugs so the drug companies need to adapt. Companies need to be paid for their work. What would be a better system? Why can't India develop newer drugs, for instance, then release them cheaply? It should be give and take, not just take.
- zaroth 12y ago
  Or more likely, India develops the drug and give it away freely in India while still charging Americans the $84,000? I think it's because to sell the drug in the US costs billions of R&D even if it's done in India. There's no shortcut. I personally am happy the market supports these massive and risky R&D to occur based on windfalls for successful drugs. There's no known better model to encourage the necessary investment. Also, keep in mind, this is a treatment which is overall lowering the cost of this disease very significantly. It results in spending a fraction of the cost of chronic care for Hep C. But yes the bill hits all at once instead of over 20 painful years for the patient.
  - melling 12y ago
    You don't know that for sure. India's Mar's mission only cost a fraction of what it would cost NASA. In fact, it cost about as much as a Hollywood movie. http://money.cnn.com/2014/09/25/news/india-mars-cost/ http://money.cnn.com/2014/09/25/news/india-mars-cost/ India definitely wants to grow its economy. Selling expensive drugs to the US and Europe couldn't hurt. Look at China, for example. They built 10,000 miles of high-speed rail for about 3x what the few hundred miles of HSR will cost in California. They built a maglev train for $1.2 billion. This couldn't be done for nearly the same price as the US. http://en.wikipedia.org/wiki/Shanghai_Maglev_Train http://en.wikipedia.org/wiki/Shanghai_Maglev_Train India is where most generic drugs are made. India is the biggest supplier of generic drugs to the US. http://blogs.wsj.com/corporate-intelligence/2014/05/14/why-more-indian-generic-drugs-will-make-their-way-to-the-u-s/ http://blogs.wsj.com/corporate-intelligence/2014/05/14/why-m... Why not move into a more profitable business?

Mz 12y ago

This is getting depressingly common. I don't know the answer to this problem. There is a super expensive treatment for cystic fibrosis that only helps about 5% of the population and is something like a quarter million dollars a year and is not a cure. People with CF almost never have that kind of money. Unless they were born into a very wealthy family, having one family member with CF is such a huge financial and practical burden on the family that most folks with this in the family are not financially comfortable. Some of them are incredibly destitute. I get that these very expensive pills are sort of "miracle cures" and the price is intended to reflect that fact and cover the high costs of development and all that, but this is a fundamentally broken system. I don't know what the world needs to do here, but this is just crazy.

maxerickson 12y ago
Some of that cost got funneled back into CF research: http://www.cff.org/aboutCFFoundation/NewsEvents/11-19-Expansion-of-Research-and-Programs.cfm http://www.cff.org/aboutCFFoundation/NewsEvents/11-19-Expans... (I guess you mean Ivacaftor, the Cystic Fibrosis Foundation sold their royalty rights for $3.3 billion.) To a large extent, the insurance companies are setting the prices on these drugs (getting charged whatever the max they will pay). I think part of the solution might be somewhat counter intuitive, to throw even more resources at the early stage research, with the hope that there is more competition by the time things make it to patients.
- Mz 12y ago
  According to other people more in-the-know than I am, the CF Foundation is basically in bed with big pharma. They are not really looking for better care for people with CF. They are looking specifically for better drugs. So, most likely, that money is being funneled back into more drug research -- more of this type thing. I am not so sure that's really some kind of silver lining.
  - maxerickson 12y ago
    I posted the cost part of the comment because I was pondering structural incentives and in that context, found out that particular drug had a foundation partner. I wasn't necessarily trying to weigh in on the good or the bad of it. Short of gene therapy, addressing the defective protein is pretty much going to be done with drugs, so I don't find it particularly telling that they are putting resources there. CFF does seem to be involved in clinical care (but I'm not informed enough to figure out how much of that is self promotion and how much is substantive). Anyway, the main point I had intended was that the price isn't just a function of what the company wants it to be, the buyers have to be willing to pay it (which sounds gross when talking about health care, but national health systems and insurance companies do worry some about whether treatments are worth what they cost).

pinaceae 12y ago

this is such a breakthrough in modern medicine. this is a CURE of a longstanding disease, a disease which cuts off years of life expectancy of it victims. there are more of them incoming, Hep C soon have a multitude of awesome drugs covering it. competition means drug prices will come down. the current massive price is a blip. at the very worst until the patent expires. there is even more, cooler stuff in the pipelines right now. there is a leukemia drug that goes after a rare form of it - with survival rates in its patients now at 95+%. think about what this means. after a glut, modern medicinal research has kicked into high gear. the FDA has a fast track program now. 10 years from now we'll be living in a very different world.

zanny 12y ago
> 10 years from now we'll be living in a very different world. Only if you are rich enough to afford it. That is where the outrage comes from - in most of the world healthcare and a right to life is considered a human right. In the US, current IP rights and drug policy will enable the exploitation of anyone who gets any major disease for all their are worth and then you can hang them out to die without treatment. It isn't the fault of the drug manufacturers though, they are profit seeking and work in their investors interests, who gave millions over years or decades and expect returns. You can and should blame the legal framework that prevents free market drug manufacturing through monopoly patents that lets people die because they cannot afford new drugs to cure their ailments.
- adventured 12y ago
  There's no such thing as a right to own the productivity of other human beings. Even if the FDA provided a more efficient process, it would still cost hundreds of millions and take a decade to develop drugs like these. In what scenario should all of these scientists be working for free? And the equipment makers, and their employees; and on down the chain it goes. The only sane approach in the socialized medicine world, would be for the government to offer a one-time buyout for such breakthrough drugs. If your theory worked so well, socialized medicine countries would produce the most drug innovation and breakthroughs, their science and production would dwarf the US to such an immense degree it would put every pharma and biotech company in the US out of business rapidly. And yet, nothing of the sort has happened. Quite the opposite, the US has been the center of the pharma & biotech world for decades. The rich always subsidize breakthroughs, and their subsidization makes the next iterations affordable for the masses. The same pattern holds true in nearly everything.

jeffdavis 12y ago

This is a bad business plan. Sure, they make a lot of money now, but they are curing all of their customers. Soon they won't have any left. Typical shortsighted focus on profits this quarter, without a sustainable business model.

adventured 12y ago
I assume this is a snark comment, but it is a fascinating discussion. Typically it's claimed big pharma & co. intentionally withhold, avoid creating, or would never pursue cures because it's not good for business. Then when they finally produce a cure, people get upset about the price. Short of being a non-profit or charity, they're damned if they do / don't. I think if Gilead can input $1 billion for development, and yield $100 billion on a cure (minus some comparatively modest marketing expenses), that's an excellent business model. ($80k * 1.x million hep c patients in the US that get their cure; assuming only a portion of the 3.x million in the US end up taking Gilead's drugs)

jrapdx3 12y ago

Two thoughts about these Hep C drugs. First, I agree we should celebrate the advent of the potential cure for a devastating viral disease. Second, while the costs are considerable, expense is not out of line with many other treatments that are not making the headlines. Check into the costs of renal transplantation. And my wife recently had a cataract replaced, a commonplace procedure, the final bill was >$5000. The issue is the real total costs of treating vs. not treating the disease. It's necessary to take into account the costs of doctor visits, medications, disability, loss of productivity, increased likelihood of illness among family members due to stress, among many other factors. If a patient can be restored to adequate functionality, and after the Hep C treatment require no more than routine health care, the $84K might in fact be a bargain. Until we get it clear that we must consider the true total costs of fully treating vs. not treating an illness, we will never be able to make rational decisions about structuring a health care system. Unless proven otherwise, I'm convinced the system with the lowest total cost is providing care that patients actually need. We only make matters worse by the focus on "cutting health care costs" vs. reducing the total economic burden of illness.

east2west 12y ago
I appreciate what you are trying to do, but I cannot agree with determining the cost of a drug based on potential loss of income/productivity. Should the CEOs therefore get first dips on life saving treatment because they have big impact on his/her employees? Do patients in developed countries have an economic right to better treatment first than people in developing countries? Are some lives worth more than others? I don't think we are ready to go down this route. Incidentally, a very expensive drug is posing these questions, implicitly. But explicit statements like yours are not politically practical or even humane. Ten years ago it was outrageous to hear a nurse to tell a kid's parents to pay up or watch their only child die.
- Houshalter 12y ago
  That's not what parent comment is arguing at all. But I don't see why not. Money very likely correlates with value to society and would be a better heuristic than pure randomness - which is also unfair. Although hopefully it never becomes an issue of course - these hypothetical situations where we get to actually choose who lives and dies rarely happen in reality. And obviously it violates cultural values, so would not be a good idea to actually try to implement.

rokhayakebe 12y ago

Does anyone know the cost of development?

snarfy 12y ago

My wife's current medication: http://en.wikipedia.org/wiki/Alemtuzumab http://en.wikipedia.org/wiki/Alemtuzumab When sold to treat MS it has a 10000 x markup over the same medication sold to treat cancer.

refurb 12y ago
The reason for this is that you can't have two different prices for two different diseases when it's the same drug. The company decided to stop selling it for cancer (they now give it away for free) to optimize for the MS market.