Add a new set of pricing foes for Gilead Sciences ($GILD). A U.S. Senate committee has joined the forces arrayed against the company's breakthrough hepatitis C drug Sovaldi and its $84,000 price tag.
But this time, Gilead's adversaries are using different ammo. Rather than focusing on the sheer expense of treating millions of Americans with the pricey drug, the senators are digging into the acquisition that brought Sovaldi (sofosbuvir) to Gilead. And they're questioning treatment protocols quickly revised to include Sovaldi, approved by the FDA late last year.
As The Wall Street Journal reports, the Senate Finance Committee dispatched a letter to CEO John Martin on Friday, taking issue with Sovaldi's $1,000-per-pill price. Like other critics of the expensive drug, Sen. Charles Grassley, long a thorn in pharma's side, and panel chairman Sen. Ron Wyden demanded justification for its steep price. Treating only one-tenth of Medicare's hep C patients would add $2 billion to its immediate drug spending, the senators noted in their letter.
But the committee also asked for documents related to Gilead's $11 billion buyout of Pharmasset, Sovaldi's original developer. The smaller company had forecast a $36,000 price per treatment course, less than half of Gilead's current price. The senators asked to see Gilead's communications with its investment bankers, Barclays and Bank of America Merrill Lynch, about their valuation of Pharmasset during merger talks and the related pricing assumptions for Sovaldi. They also want to know how much Pharmasset spent on R&D while developing the treatment.
|Gilead CEO John Martin|
The senators also want Gilead to detail its Sovaldi-related research costs since the 2012 buyout. And they're demanding to know how much Gilead plans to charge for a Sovaldi combo pill expected to make its debut later this year. The two-drug combination will make hepatitis C treatment more tolerable for most patients, because they won't need to take the difficult-to-tolerate interferon, a staple of current hep C-fighting cocktails.
Meanwhile, the panel is questioning new treatment guidelines developed jointly by the American Association for the Study of Liver Disease and the Infectious Disease Society of America. Eighteen of the 27 panel members that worked on the guidelines have either been paid by Gilead or work for institutions funded by Gilead. At the time the guidelines were released, the two organizations said that the panel excluded anyone who worked for companies making hep C drugs or who gave promotional talks about the drugs.
The senators' probe adds to the pressure on Gilead and its pricey drug. U.S. insurers and Medicaid payers have been up in arms since the drug rolled out, and European countries now say they plan to demand deep discounts. In an unprecedented move, 14 EU countries will share information to help one another negotiate better prices. Lacking that sort of pricing power, U.S. payers are hoping competition will help bring prices down, and in the meantime, are trying to limit patients' access to the drug.
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