By Dr. Geoffrey Modest
This if from Ken Saffier, wanting to add it to the ever-growing Big Pharma Shenanigans blogs on drug company malfeasance and greed. Per the NY Times, at the time of the release of these extraordinarily expensive Hep C drugs, Gilead admitted that the pricing was totally divorced from their costs but that the drugs were “worth it” because the costs of Hep C care was even more. This extensive Senate Committee investigation, led by a conservative Republican, confirms this.
_________________________________________________________________________
Senator Ron Wyden
Press Release
December 1, 2015
Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis Drug
18-Month Investigation Reveals a Pricing and Marketing Strategy Designed to Maximize Revenue with Little Concern for Access or Affordability
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and senior committee member Chuck Grassley, R-Iowa, today released the results of an 18-month investigation into the pricing and marketing of Gilead Sciences’ Hepatitis C drug Sovaldi and its second-wave successor, Harvoni. Drawing from 20,000 pages of internal company documents, dozens of interviews with health care experts, and a trove of data from Medicaid programs in 50 states and the District of Columbia, the investigation found that the company pursued a marketing strategy and final wholesale price of Sovaldi – $1,000 per pill, or $84,000 for a single course of treatment – that it believed would maximize revenue. Building on that price, Harvoni was later introduced at $94,500. Fostering broad, affordable access was not a key consideration in the process of setting the wholesale prices.
“Gilead pursued a calculated scheme for pricing and marketing its Hepatitis C drug based on one primary goal, maximizing revenue, regardless of the human consequences. There was no concrete evidence in emails, meeting minutes or presentations that basic financial matters such as R&D costs or the multi-billion dollar acquisition of Pharmasset, the drug’s first developer, factored into how Gilead set the price. Gilead knew these prices would put treatment out of the reach of millions and cause extraordinary problems for Medicare and Medicaid, but still the company went ahead. If Gilead’s approach to pricing is the future of how blockbuster drugs are launched, it will cost billions and billions of dollars to treat just a fraction of patients,” Senator Wyden said.
“The Finance Committee has tremendous responsibility in overseeing the federal programs paying for prescription drug coverage,” Senator Grassley said. “With that responsibility, the committee should know how the costs to the public programs and private insurance companies of a single innovative drug entering the market without competition can have major effects on which patients get the new drug and when. This report sheds light on one example of the pricing decisions made by one company with a new prescription medicine that entered the market without competition in high demand.”
Additional major findings from the investigation include:
* Gilead justified Sovaldi’s high price point based on price-per-cure
* Gilead set a high price for Sovaldi with an eye toward ensuring a future high price for Harvoni
* Gilead underestimated the degree of access restrictions that it expected would result from its pricing decision
* Despite significant access restrictions, Gilead refused to significantly lower the net price
* The burdens on Medicare, Medicaid, and the Bureau of Prisons were significant
The press release includes links to the Executive Summary and 144 page report:
***
Kaiser Family Foundation
December 2, 2015
It Pays to Shop: Variation in Out-of-Pocket Costs for Medicare Part D Enrollees in 2016
By Jack Hoadley, Juliette Cubanski, and Tricia Neuman
Medicare Part D drug plans differ considerably in the drugs they list on their formularies, their use of formulary tiers, and the level and structure of cost sharing applied to those tiers. Plan premiums and the use of deductibles also vary widely. Plan decisions affect different beneficiaries in different ways, depending on the drugs they use. The financial consequences for Part D plan enrollees can be substantial. In this brief, we focus on out-of-pocket drug costs for Part D enrollees in 2016 for specialty, brand, and generic drugs.
Part D enrollees can expect to pay thousands of dollars out of pocket for a single specialty drug in 2016, even after their drug costs exceed the catastrophic coverage threshold
From Figure 1:
Median on-formulary out-of-pocket costs in 2016:
Sovaldi $6,608
Harvoni $7,153
Part D enrollees’ out-of-pocket costs for many specialty drugs are substantial at the start of the year, and continue even after spending exceeds the catastrophic coverage threshold
Out-of-pocket costs are substantially higher—often ten times higher or more—for specialty drugs when they are not listed on formulary by a Part D plan