The new hepatitis C drug costs how much?!

NPR's Richard Knox gets its right the second time around on high pharmaceutical prices

When the Food and Drug Administration in early December approved sofosbuvir, an important new drug to treat hepatitis C, most of the media coverage was of the gee-whiz variety—trumpeting claims that the drug will cure a widespread, hard-to-treat disease while downplaying questions about conflicts, caveats, and, especially, cost. A flawed Dec. 5 piece by NPR’s Richard Knox was very much in that vein; the story touted the drug as the leading edge of a “landmark shift” in treatment of hepatitis C but gave short shrift to its startling price tag of nearly $90,000 for a 12-week treatment regimen, or $1,000 per pill.

So it was great to hear Knox’s follow-up story on Monday, which began by posing the question that was relegated to a footnote in the earlier story: “Who will get access to the new drug for hepatitis C, and when?” Who gets the drug, of course, depends in part on who will pay for it and how much it will cost. If the price is too high and payers balk, patients who might benefit may not get the drug. But as Knox’s piece dug into the debate over pharmaceutical pricing, it began to lay out for readers and listeners why drug prices, especially for very promising products, are so high and likely to remain high.

Knox interviewed Gregg Alton, vice president of the drug’s manufacturer Gilead Sciences, who offered several justifications: the drug is valuable for both patients and the healthcare system (even at $1,000 a pop, it can be cheaper than traditional treatments for advanced hepatitis C); big profits on successful drugs create incentives for risky pharmaceutical research; the company will help patients pay for sofosbuvir or find drug coverage; and the drug will cost far less in developing countries, where most people with hepatitis C live. (Update for the sake of clarity: Sofosbuvir is the generic name; the drug’s brand name is Sovaldi. Hat tip to Paul Raeburn.)

But what makes the story stand out are the interviews with a researcher at the University of Liverpool and a doctor at Boston’s Beth Israel Deaconess Medical Center, each of whom question the drug’s stratospheric cost. Their remarks provide a much-needed perspective on pharmaceutical pricing. Andrew Hill, the British researcher, has estimated that Gilead’s cost to produce “a course of these treatments would be on the order of $150 to $250 per person,” based on the cost of similar antiviral drugs used to treat HIV. That’s per person, not per pill. That estimate prompts Hill to question whether Gilead’s price represents “a fair profit.”

For her part, Dr. Camilla Graham, the hepatitis C specialist at Deaconess, thinks that the initial cost of the drug may be justified when it’s weighed against the high cost of traditional treatment for hepatitis C patients and the $11 billion Gilead paid to buy a smaller company that developed sofosbuvir.

But Graham raises another point that ought to be considered when reporting on the cost of new drugs. Sofosbuvir and other soon-to-come drugs like it may be blockbusters because of the size of the market they aim to serve—hepatitis C affects more than 3 million Americans and perhaps 170 million people across the globe. But that huge market in turn may shape our sense of a reasonable price. “You only need about 150,000 people to recover that [investment] cost,” Graham tells Knox. “And so, if you’re treating 2 million people, once you have recovered your cost, then I think it’s… I don’t want to say it’s unfair, but it does start feeling more exploitative.”

When Knox brings Graham’s suggestion to Gilead’s Alton, the drug company rep responds: “That’s very unlikely that we would do that.”

Alton was a little more forthcoming, and more flexible, on what sofosbuvir will cost in places like India, Pakistan, Egypt, and China—somewhere “from the high hundreds to low thousands,” he said.

And what about the American market? How do we get to a price that ensures widespread access to useful drugs, delivers a fair return to medical companies, and holds down overall healthcare costs? It’s a hard question, but it needs to be part of every substantial story about new treatments. We hope Knox can continue the conversation.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: ,