Australia bets $1B on pricey hep C drugs in broad effort to eradicate the disease

Gilead's Sovaldi

Good news for Gilead Sciences ($GILD) and Bristol-Myers Squibb ($BMY): Australia's federal government wants to eliminate hepatitis C in the country. And it plans to shell out $1 billion on the drugmakers' meds to do that.

Australia is earmarking $1 billion to subsidize Gilead's Sovaldi and Harvoni, along with Bristol's Daklinza--as well as Pendopharm's ribavirin tablets, Ibavyr--for all hep C patients, regardless of their age or how they acquired the disease, Sky News reports. Authorities are hoping the investment can wipe the malady off the continental map within 20 years.

The move, which Health Minister Sussan Ley called a "game changer," will take the price for the expensive treatments down from near AUD 100,000 to just AUD 37.70 for beneficiaries of the country's Pharmaceutical Benefits Scheme who hold a Medicare card. For others, the price could go as low as AUD 6.10.

The broad access contrasts starkly with that in the U.S., where many patients--particularly those on Medicaid--are still denied coverage.

Still, the sales boost Gilead and Bristol will see from Australia pales in comparison with what they rake in in their home country. In 2014, Medicare shelled out close to $700 million on combo treatment Harvoni--and the med didn't even win approval until October of that year. Sovaldi, which got the regulatory green light the year prior, cost Medicare $3.11 billion.

Other countries--whose governments boast the ability to negotiate with drugmakers on price, which the Centers for Medicare & Medicaid Services (CMS) so far can't--haven't had to empty their pockets in quite the same way.

France, for one, snagged the lowest price in Europe for Sovaldi last November, cutting a deal to provide the med free to all patients while paying a quoted per-box price of €13,667. That's €5,000 less than its original price in the country, and it put a 12-week course of treatment--which runs with a list price of $84,000 in the U.S.--at €41,000, or about $51,000.

- get more from Sky News
- see the Medicare spending report (PDF)

Special Reports: The top 10 most expensive drugs of 2013 | The top 15 pharma companies by 2014 revenue - Gilead Sciences - Bristol-Myers Squibb | New drug approvals of 2014 - Harvoni

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