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Gilead taken to task over Sovaldi pricing

US politicians question high cost of new hepatitis C drug
Gilead Sciences

Three US lawmakers have blasted Gilead Sciences over the price of its new hepatitis C virus (HCV) treatment Sovaldi and asked for an urgent meeting with the company.

In a letter to Gilead's chief executive John Martin, Representatives Henry Waxman, Frank Pallone and Diana DeGette say the $84,000-per-course price tag for Sovaldi (sofosbuvir) is "likely to be too high for many patients, both those with public insurance and those with private insurance".

Waxman, a longstanding critic of pharma practices such as 'pay-for-delay' deals, is due to retire at the end of the current Congress but seems determined to shine a light on the industry's pricing policies before he steps down in 2016.

The letter points out that combining Sovaldi with other new drugs such as Johnson & Johnson's Olysio (simeprevir) could drive the price of a 12-week course up to $150,000-plus.

While acknowledging that Sovaldi seems to be a 'breakthrough' treatment, the representatives write that "a treatment will not cure patients if they cannot afford it", noting that some state Medicare systems are already suggesting they will restrict Sovaldi's use to only the sickest patients.

Sovaldi is on track to become the most lucrative pharmaceutical product launch in history, chalking up nearly $140m in the fourth quarter - despite only being available for a couple of weeks - and likely reaching $1.5bn in the first three months of this year.

The performance backs up analyst estimates of annual sales upwards of $6bn a year for Sovaldi, even if its early performance has been swelled by warehousing of HCV patients who opted to delay therapy until the new treatment was available.

The Representatives want to quiz Gilead on the methodology it uses to set pricing, discount programmes it plans to offer to low-income patients and - in an interesting take - whether expedited review by the FDA saved the company money that should be reflected in Sovaldi's price.

Analyst Mark Schoenebaum of ISI Group downplayed the impact of the letter in next few years, but suggested it could start mobilising "generalist sentiment" that could place pressure on pharma pricing over the longer term.

That fear caused shares in Gilead and other biopharma companies such as Biogen Idec and Amgen to come under pressure after news of the letter emerged last Friday.

Waxman, Pallone and DeGette have asked Gilead's Martin to answer the queries in a briefing "no later than April 3".

Article by
Phil Taylor

25th March 2014

From: Sales

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