Top payer group shoots down Gilead's hep C drug Sovaldi on price

Gilead's Sovaldi--Courtesy of Gilead

Individual payers aren't alone in balking at the $84,000 price for Gilead Sciences' new hepatitis C treatment Sovaldi. Now, the leading insurance trade group has joined the soloists, backing their complaints with its own.

America's Health Insurance Plans (AHIP) targeted Sovaldi in a blog post Tuesday, giving the Gilead ($GILD) drug kudos for effectiveness--and a big slap for cost.

"Sovaldi has shown tremendous results, and it's the kind of medical innovation we need to sustain," the AHIP blog post states. "Unfortunately, the drug's maker … has priced it at an astronomical level that is not sustainable for consumers, innovation or society."

Gilead has defended its pricing, saying that the drug might be expensive, but it cures patients and prevents costly hepatitis C complications like liver transplants. But the drug brought in more than $2 billion in first-quarter sales--after an approval in December--and could surpass $10 billion this year, some analysts say. That kind of cash flow touched off a new round of criticism.

AHIP's comments follow loud protest from some pharmacy benefits managers, which worry that an expensive drug plus millions of hep C patients will equal disaster for their businesses. A California treatment-review panel dismissed Sovaldi as a "low value" treatment, strictly because of its price tag.

Some private insurers and Medicaid programs are restricting Sovaldi to the sickest patients, at least for now; they're hoping that new competitors, set for approval later this year, will help spur some price competition. That strategy may work, but then again, other hep C drug developers have suggested that they're not interested in a pricing war. All of them, of course, want to profit off their own R&D efforts.

But some payers intend to play hardball. Top PBM Express Scripts has said that it will compare the various drugs in the new crop of hep C treatments--and will exclude products if they're not considered to be worth their prices.

- see the AHIP blog post