Senator asks VA to yank patent on Gilead's Sovaldi to crush its price

Sen. Bernie Sanders (I-VT)

Gilead Sciences ($GILD) has been able to withstand scathing criticism at home over the prices of its hep C cures, negotiate with stingy price watchdogs abroad and face down criticism in developing countries by giving generics producers access to formulations and technology. But can it stand up to a possible attack by the U.S. military?

Sen. Bernie Sanders--the Independent from Vermont who recently announced his plans to seek the Democratic nomination for president--asked Veterans Affairs Secretary Robert McDonald to break the patents on Gilead's hepatitis C treatment Sovaldi using a wartime provision to fighting profiteering. His call came after learning that the VA has stopped treating new hep C patients with the hep C cures because it didn't have the money.

"Therefore, I ask you to utilize federal law … to break the patents on these drugs to authorize third parties to manufacture or import them for government use," Sanders said in a letter to McDonald.

Sanders, while chairman of the Senate Committee on Veterans' Affairs last year, held hearings on the price of the drugs. He said he has since learned that while 20,000 veterans have been treated, another 200,000 more need the drugs. He said the VA couldn't enroll them in treatment now because it had run out of funds, even though it could negotiate discounts for the drugs and had reallocated $400 million to pay for the hep C treatments. "Our nation's veterans cannot and should not be denied treatment while drug companies rake in billions of dollars in profits," Sanders said in the letter.

The company did not respond to a request for comment.

Sovaldi's $1,000 a pill list price, $84,000 for a 12-week regimen, drew a loud criticism from many sectors as soon as it was announced in 2013. Its combo treatment Harvoni, which can cure a wider spectrum of sufferers, lists for $94,500 for 12-weeks. Gilead has defended the prices by curing most patients, they will prevent health programs from having to pay for complications like liver transplants.

Express Scripts CMO Steve Miller

That argument didn't appease many payers. Express Scripts ($ESRX) CMO Steve Miller, a zealous opponent from the get-go, said the cost of the drug could bankrupt the healthcare system. He led a charge against the price by cutting an exclusive deal with AbbVie ($ABBV) for its competing treatment Viekira Pak, a soon as it was approved by the FDA last year. That resulted in a series of deals that both companies worked with payers that has led them to "deeply discount" their treatments.

Of course critics can point to the fact that in other countries, where governments have the authority to negotiate drug prices, the cost of Sovaldi is much lower. Germany and France have beat the price down to €41,000 (about $46,000).

The VA's health insurance program is part of the trinity of federal healthcare programs that also includes Medicare and Medicaid. Even with discounts some states are having trouble covering the hits their state programs are taking from the liver disease treatments. California Gov. Jerry Brown has inked in $300 million to fund hep C treatments in the next fiscal year, but the state's budget analyst questioned if that will be nearly enough. Some legislators in the state are so upset about the high costs of the hep C treatments, and other meds, that one introduced a bill that would require drugmakers to lay out how they arrived at them.

Sen. Sanders acknowledged that the drugs have already gone a long way to helping veterans with hepatitis C. He just says many more could be helped if the price of the drugs were more reasonable. He urged McDonald to act: "We must not allow corporate greed to stand in the way of this potential."

- here's the letter
- here's Sanders' announcement

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