Wednesday, April 30, 2014

Gilead says its drug gives hepatitis C patients more cost-effective cure

Gilead says its drug gives hepatitis C patients more cost-effective cure
By Russ Britt

Patients who weren’t getting proper treatment for hepatitis C now are getting it thanks to Sovaldi, the controversial new hit drug from Gilead Sciences Inc., an official from the company said Wednesday.

Gregg Alton, executive vice president for Gilead’s  /quotes/zigman/72849/delayed /quotes/nls/gild GILD +0.24% corporate and medical affairs, told an audience at the Milken Institute’s Global Conference in Beverly Hills, Calif., that the $84,000 price tag for Sovaldi is proving to be cheaper and more effective than past treatments for hepatitis C.

“We’re actually reducing the cost of therapy,” Alton said. He says that patients using older therapies would end up spending up to $150,000 or $200,000 for getting treatment over a longer period of time, when costs for drugs to treat the frequent side effects are put into the mix. Sovaldi treatment lasts three months, prompting shock from some in the medical community over its $1,000-a-day price tag.

While many insurers have yet to complain about the price tag, the nation’s biggest carrier UnitedHealth Group Inc.  /quotes/zigman/258846/delayed /quotes/nls/unh UNH said the drug cut into its first-quarter earnings. Alton points out that pharmacy benefit manager Express Scripts /quotes/zigman/9438326/delayed /quotes/nls/esrx ESRX -0.02% has voiced concerns about the drug’s cost.

“The payers are saying, ‘I didn’t plan for this,’ ” he said. “The fact is, patients are getting the drug.”
Alton later added the price on the drug was right, considering how much it used to cost to treat the ailment, but acknowledged that at some point rival drugs that are being developed will hit the market, which may affect pricing. As well, the healthy margins for Gilead and other biotechnology companies — 20% to 30% in some cases — will become the subject for debate.

“I’m sure that’s going to be a conversation,” Alton said. “How much is enough?”

Follow Russ Britt @russbrittmktw.
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