Gilead-Democratic Leaders Request Briefing on Hepatitis C Drug Pricing

Democratic Leaders Request Briefing by Gilead on Hepatitis C Drug Pricing

Today Ranking Member Henry A. Waxman, Health Subcommittee Ranking Member Frank Pallone, Jr., and Oversight and Investigations Subcommittee Ranking Member Diana DeGette sent a letter to Gilead Sciences Inc. Chief Executive Officer John C. Martin to request a briefing on pricing of the company's recently approved Hepatitis C drug, Sovaldi.

WASHINGTON, March 20 -- The Ranking Democratic Member of the House Energy and Commerce Committee issued the following news release:

Today Ranking Member Henry A. Waxman, Health Subcommittee Ranking Member Frank Pallone, Jr., and Oversight and Investigations Subcommittee Ranking Member Diana DeGette sent a letter to Gilead Sciences Inc. Chief Executive Officer John C. Martin to request a briefing on pricing of the company's recently approved Hepatitis C drug, Sovaldi. Reports indicate that Gilead intends to sell Sovaldi at $84,000 per treatment, which will affect coverage for patients with public or private insurance.

FDA approved Sovaldi in December 2013 after the drug received an FDA Priority Review and Breakthrough Therapy designation, which is intended to expedite review of drugs for serious or life-threatening conditions.

March 20, 2014
The full text of the letter is available online here
(http://democrats.energycommerce.house.gov/sites/default/files/documents/Martin-Gilead-Sciences-Hepatitis-C-Drug-Sovaldi-Pricing-2014-3-20.pdf). 

Investment Commentary 

Elsewhere - Seeking Alpha

Gilead Is An Avoid

Mar. 21, 2014 2:04 PM ET  |  About: GILD, Includes: IBB 

By Thomas H. kee Jr. 

Summary

• Biotech was in play on Friday.
• Political Pricing Pressure in GILD was the cause.
• There are no reasons to buy GILD here.

Of course, political pressures are the heavy hand in this sector, The House sent Gilead a letter to that effect on Thursday, and when the government pays the bills the benefit of capitalism, innovation, often gets hampered, but that cannot and must not distract investors from what makes them money. As far as I am concerned, price makes us money, not news, Government decisions, or anything else. In this case, the government is making a very obvious decision.

 In summary, the letter sent to Gilead from the House of Representatives on Thursday suggests the $84,000 per treatment proposed cost of its Hepatitis C vaccine, Sovaldi, and the more probable $150,000 per treatment cost imposed by combination therapies offered by physicians, would not be affordable by most of the persons diagnosed with Hep-C because those are typically lower income demographics. In addition, and what was not as direct, the letter suggested that the Government, who would ultimately have to pay that bill, was not willing to pay what Gilead was asking. In no uncertain terms, the Government is doing everything in their power to reduce the cost per treatment, and if they are successful as they probably will be, the revenues from this seemingly successful vaccine will come down considerably from that $84,000 estimate. We do not yet know by how much.....
Continue..... 

Related: Costly New Hepatitis C Drug Raises Questions About Who Will Pay
New hepatitis C medication presents a dilemma for Medicaid and other insurers, who must balance the cost against the large numbers of people who might benefit. The $84,000 cost for the cure over 12 weeks, the most expensive medicine for the disease, has states from Pennsylvania to Colorado limiting its use to only the sickest patients, according to health officials and private insurers that manage care for Medicaid programs.