In the latest effort to quantify the burden of expensive medicines, a new study found that the cost of two widely used hepatitis C treatments remains out of reach for people in many poor countries and poses a “financial and ethical dilemma” for payers and doctors.
In general, current prices are unaffordable and, as a result, poorer countries may be paying higher prices than wealthier nations, according to the study, which appeared on Tuesday in PLOS Medicine and was conducted by World Health Organization officials. The authors examined 2015 prices for the Sovaldi and Harvoni drugs, which are sold by Gilead Sciences, in 30 countries in the Organisation for Economic Cooperation and Development.
The study found that if a patient paid for treatment out of pocket, the cost of a full course of Sovaldi alone would equal one year or more of average earnings for people in 12 countries. For instance, when adjusting for rebates, currency differences, and purchasing power, Sovaldi cost $101,000 in Poland and $70,300 in Turkey, compared with nearly $64,600 in the United States.
Moreover, the total cost of treating all hepatitis C patients would equal at least one-tenth of the current annual cost for all medicines in all 30 countries where prices were examined. In some countries where prices are high and there are many infected with the virus, the total cost of treating everyone would be more than the cost of all other medicines combined, the study authors wrote.
“It’s a global problem,” Suzanne Hill, who heads the WHO’s Department of Essential Medicines and Health Products, and is one of the coauthors, told us. “And the problem is not confined to medicines just for this one problem. The issue is that it’s an indicator of a system that is no longer functioning in a way that allows public health goals to be met.”
We asked Gilead for comment and will update you accordingly.
The study analyzed prices compared to national economic performances, the estimated market size, and the cost of the drugs in relation to each country’s annual total spending on pharmaceuticals. The researchers also calculated the amount of time an individual would need to work to pay for treatment out of pocket. And they assumed that manufacturer rebates amounted to 23 percent.
The hepatitis C drugs have been a flashpoint in the widening debate over the cost of medicines. In the US, Gilead caused outrage over pricing for Sovaldi and, later, Harvoni, which combines the older treatment with another compound. At first, Sovaldi cost $1,000 a pill, or $84,000, for a 12-week course of treatment, while Harvoni carried a $94,500 list price.
Despite the high prices, many doctors quickly began writing prescriptions because the medicines have cure rates exceeding 90 percent. And Gilead, among others, argue that the drugs represent a worthwhile value because money can be saved over the long term when considering the cost of treating liver disease, liver cancer, and transplants.
But fearing budget strains, private and public payers — such as state Medicaid programs — began restricting access to only the sickest patients. A US Senate Finance Committee report, which examined internal Gilead documents, accused the drug maker of placing profits before patients. Prices, however, have since dropped as Gilead began increasing rebates to fend off competition from Merck and AbbVie.
To blunt criticism overseas, Gilead struck a deal with several generic drug makers in India to supply Sovaldi at a reduced price to nearly 100 countries. Gilead is also selling Sovaldi at a low price elsewhere, such as in Egypt. The moves may have widened access, but the PLOS study found that affordability remains sorely lacking in many other countries, particularly when adjusted for national wealth.
Overall, the researchers found the medicines would consume large proportions of the total pharmaceutical budget set by national health systems. For instance, 15 of the 30 countries analyzed would require more than $5 billion, when adjusted for purchasing power, in order to provide treatment coverage for the entire infected patient population of their country.
“There needs to be a global conversation,” said Hill. “Do we wait 10 years for the drugs to come off patent? Do we hope newer molecules [will be approved for sale by regulators] and produce greater competition to make treatments more affordable? Unfortunately, we can’t afford to wait for prices to fall through these standard mechanisms.”
[UPDATE: We later received a note from Gregg Alton, who oversees commercial and access operations at Gilead. He maintained that the pricing data listed is “not reflective of agreements” made between countries and payors who have worked with Gilead to provide access. And he argued that “the actual number of patients who could be treated annually over a period of years should be used. The near term annual number is much lower due to factors outside of drug cost including low rates of current diagnosis, access to diagnostics and healthcare system capacity.”
He also complained about comparing the impact of a lifetime cure to an annual income. “We do not think such a comparison is fair. This is a financing challenge, not a cost challenge, inherent in our healthcare systems. We believe that health systems should be financed and incentivized to make upfront investments in long-term benefits. If this is done, the one-time cost incurred in providing Sovaldi and Harvoni will produce significantly larger lifetime costs savings associated with preventing the consequences of untreated chronic hepatitis C infection.” ]
I was looking for some “Hepatitis Medicine Price” articles to read over lunch today (yes, I’m a nerd like that) when I found your excellent article:
I actually publish a guide to Harvoni cost research last week
It might make a nice addition to your article
Either way, keep up the awesome work!
Thanks for sharing your article Keep it up
The accompanying “perspective” in PLoS Medicine adds a useful commentary and, well, perspective, in comparing pricing of HCV and HIV drugs. http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1002031
Importantly it notes: “For these reasons, the fiscal burden expressed as a percent of TPE or as a portion of the average annual wage would be much less than the maximum burden as presented in Hill and colleagues’ article.”
• 15–45 percent of people infected with HCV get better within six months without ever receiving treatment.
• Many people are unaware they’re infected.
• 55–85 percent will develop chronic HCV infection.
• For people with chronic HCV infection, the chance of developing cirrhosis of the liver is 15–30 percent within 20 years.
• 130–150 million people around the world are living with chronic HCV.
• Treatment with antiviral medications can cure HCV in many cases, but in some parts of the world, access to the necessary medical care is lacking.
• Antiviral treatment can reduce risk of cirrhosis of the liver and liver cancer.
It raises the question of “number needed to treat.” How many of the 130-150 million people living with chronic Hep C need to be treated to stop one case of cirrhosis? How much does Gilead make treating millions of people who never needed their drug in the first place? Should we really be screening everybody for Hep C and automatically treating all of them?
I do believe the Gilead drugs are cost effective for those who would otherwise require a liver transplant, but I do not think they are cost effective for treating everyone who is infected with Hep C. The cost (and the company’s rationale) should take into account all the people who will be treated and for whom the treatment will NOT be a cost savings over time because those people would never go on to develop liver complications. Thus, the cost should not be $1000 a day, but more like $100/day.
Brian P. O’Sullivan, MD
Professor of Pediatrics
Geisel School of Medicine at Dartmouth
I will have to see if the study includes the United States since it seems, quite frankly, that our domestic market cannot afford it either.
Hi Ed: What is amazing is that USTR is bullying countries through their own lack of foresight. It happened in two industries. Pharma and Airline. In both cases USTR got caught with their pants down. Middle eastern airline were given carte blanche landing rights as they were considered airlines from backward countries. When they started landing in select cities in US with better service and amenities, US airline industry cried foul saying they are subsidized.
CL was part of the WTO provision and the developed countries took the developing and others for a ride in many clauses. No one looked at what impact CL will have. Now they are crying foul. Gilead patent grant in India is shrouded with doubts. Many believe that political pressure was mutually exchanged at the highest levels.
Many times smarty pants get caught and then they use what ever it takes to get their way. Isn’t that called survival of the fittest or the block bully?
I have not read details of WTO agreement but many of the countries where the prices are high participated in the Doha Agreement. Shouldn’t they use “compulsory licensing” provisions to lower the HCV drug costs? Unless they take a stand against such high prices are going to the norm. It is well known that Gilead has barred experts from India to many of these listed wish countries.
Yes, a compulsory license may be an option, but that, of course, would depend on patents in each country and the challenges involved. Witness the tussle between Colombia and Novartis.
So this tactic may be viable, but not necessarily a substitute for a more comprehensive approach. The conundrum remains, in other words.
Thanks for stopping by,
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