Covering the $1,000 pill

Five questions reporters still need to ask about very expensive new drugs like sofosbuvir---and the cost of healthcare overall

Are the costs of super expensive drugs—to cure whatever ails Americans—justifiable? The drug sofosbuvir, used to treat hepatitis C, has emerged as the poster child for this nagging question. Slowly, the press—which has often acted as a cheerleader for new drugs—is taking a more skeptical look at sofosbuvir, and exploring whether the drug justifies the outlay from the public purse, or from the wallets of insurance companies for that matter. The drug costs $1,000 a pill or around $84,000 for a 12-week course of treatment. When it first debuted in late November—under the brand name Sovaldi, sold by Gilead Sciences—early press coverage was typical of announcements for new drugs; that is, it was laudatory, gave short shrift to the evidence for the drug’s efficacy, lots of ink to the potential for profitability and market share as well as the drug maker’s rationale for its high price. As I noted then, “The story of the new hepatitis C drug opens the door for a renewed examination of the high cost of medicines and their contributions to the high cost of medical care in the US.”

In early January, NPR’s Richard Knox reported on Sovalidi’s pricing by going beyond the drug makers’ standard spiel and interviewing outside experts. One researcher at the University of Liverpool estimated that the 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 antivirals to treat patients with HIV. A doctor at Beth Israel Deaconess Medical Center in Boston questioned whether the price was justified once the company recovered its initial investment—after which, she told Knox, “I don’t want to say [the price is] unfair, but it does start feeling more exploitative.”

Saturday, The Washington Post’s Sandhya Somashekhar advanced the story by interviewing those who pay for the drug and, what do you know, she discovered some pushback. (Kaiser Health News had a similar report on Monday). Somashekhar reported Molina Healthcare, a company that operates Medicaid managed-care plans in 11 states, has told state officials it cannot bear the cost of covering the drug, and is asking states to pay separately for the drug instead of bundling it into a flat fee. It also is deciding whether to cover it at all. Express Scripts, the country’s largest pharmacy benefit manager, is asking doctors in its networks to delay prescribing the drug if patients can safely wait. This is the first time Express Scripts—whose job is to contain the costs of prescription drugs for employers—has asked doctors to avoid a drug because of its costs. State Medicaid directors say taxpayers will have to pick up most of the cost of the drug because many people who have hepatitis C get their healthcare through Medicare, Medicaid, or the prison system—and Medicaid officials aren’t happy about it .

“Advocates say Gilead has taken corporate greed to new levels,” Somashekhar wrote. (While Gilead touted to the Post its “generous assistance program to help low-income people get the drug at a low cost,” giving some people with low incomes help with the bill doesn’t make the bill lower for the rest of the population, and that bill still gets figured into the insurance premiums everyone pays.) Dr. Arthur Kellermann, dean of the US Medical School, reinforced that point in a tweet on Sunday: “If you have a great new drug, and no sense of shame, this is what you can do. Can our nation afford it?”

That’s a question the press needs to continue asking. A week ago, New York Times reporter Elisabeth Rosenthal told us she hopes her series on the high price of American healthcare will spark a very loud conversation that politicians can’t ignore. How can reporters advance this story and contribute to that conversation? When it comes to reporting fully and carefully on sofosbuvir, here are some questions journalists should be asking:

Where does this drug live on the cost (and efficacy) spectrum compared to other drugs that can fight hep C? In other words, put Solvaldi’s $84,000 price tag in context for readers. The Post describes Sovaldi as costing “more than what many cancer treatments cost in a year,” for example, but the only mention of how it compares to the price of existing hep C treatments is from Gilead itself, which told the Post “the price is fair because it is a signifcant improvement from previous treatments and it is not more expensive than the old treatment.” Kaiser reports that “older drugs cost about $25,000 per treatment, while some newer products approved in 2011 have prices closer to Sovaldi, but have more side effects or are more complex to administer.” Clearly, further reporting is needed here.

How much does the drug cost in other countries? When the drug first appeared, Gilead hinted it might be cheaper in places like India, China, and Egypt. What about other countries that contain costs better than we do—like Canada, Germany, or the UK? And speaking of the UK, has NICE, the National Institute for Health and Clinical Excellence, passed judgment on the drug and how it should be used? Is there enough clinical evidence for its use?

Will the price of sofosbuvir drop when competitors show up? This is one to watch. As Stephen Hall reported in his New York magazine piece last fall, “what predicts the price of the next cancer drug is the price of the last cancer drug.” Will the same be true of Sovaldi and its competitors?

Are Medicaid directors in the 25 states that have so far not expanded their Medicaid programs rushing to pay for the new drug? Those states say they aren’t expanding because of the cost of insuring more people. If they are paying for the drug, what figures into the decisions to pay for an expensive drug to help a few while leaving thousands of low income residents without access to health insurance?

What’s the cost benefit analysis? NPR’s first story in early December reported health officials were recommending that some 79 million baby boomers born between 1945 and 1965 should get tested for hepatitis C. Did that mean even the millions who are at zero risk for the disease—those who had no blood transfusions or exchanged needles? In his November piece about the drug, New York Times reporter Andrew Pollock wrote, “For patients who can afford them, the temptation to take the new drugs before trouble arises will be powerful.” Reportters need to ask some questions of the CDC and other experts about the costs and benefits of such measures.

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The new hepatitis C drug costs how much?!

America’s healthcare prices are absurd…so now what?

Oregon doctors say no to drug companies

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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.