Sovaldi may be cost-effective, but the U.K. can't afford it, documents say

Gilead's Sovaldi--Courtesy of Gilead

Gilead Sciences' ($GILD) hepatitis C drug Sovaldi may be worth the sticker price. But it's too expensive for the U.K.'s health system to bear. That's the assessment in some National Health Service documents obtained by the Health Service Journal.

Last month, the notoriously nit-picky National Institute for Health and Care Excellence (NICE) backed Sovaldi for use by the NHS. Gilead had offered a price break on the drug--its cost to the service is estimated at £35,000--but it's still no penny-pincher. NICE weighed the evidence, totted up the long-term benefits of curing thousands of hep C patients outright--and determined that Sovaldi was cheap at the price.

Apparently, behind closed doors at the health service, there's some doubt about that. According to the journal, cited in Pharmafile, offering Sovaldi via the NHS would put 20,000 patients in line for treatment. That's where the problem lies. It's not a price problem, but a cost-burden problem.

The aggregate cost of treating those patients? Some £1 billion. And that's 'prohibitive,' the NHS briefing documents say (as cited by Pharmafile).

The NHS has come to the same conclusion as many payers in the U.S. The cost of treating hepatitis C patients in the States is staggering. The potential pool of patients is large--about 3 million. Multiply that by Sovaldi's higher U.S. price--$84,000--and add on the companion treatments? By some calculations, spending on Sovaldi would top the cost of treating all other patients with all other drugs, combined.

That's why insurers and pharmacy benefits managers have been trying to limit access to Sovaldi and its cocktail partners. Pharmacy benefits managers such as CVS Caremark ($CVS) and Express Scripts ($ESRX) have begged doctors to hold off on treating early-stage patients until competing drugs hit the market. State Medicaid programs are limiting Sovaldi to only the sickest patients. Some aren't paying for it at all, saying they're still "assessing" the drug.

Here's the problem: Sovaldi, and its soon-to-be-approved rivals--can save lives, prevent costly liver transplants and more. But as the NHS points out, that big-time cost savings won't be realized for years, perhaps even decades--and the bill for the drugs is due now.

- read the Pharmafile story

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