Are Hepatitis C Drugs Too Expensive?
    By Josh Bloom | May 8th 2014 12:07 PM | 12 comments | Print | E-mail | Track Comments
    About Josh

    Director of chemical and pharmaceutical sciences at The American Council on Science and Health in New York since 2010.

    Former research chemist


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    After 20 years of grueling research, unimaginably effective drugs to treat hepatitis C are hitting the market. They are so good that cure rates (aka sustained virological response, or SVR)—defined as the absence of detectable hepatitis C virus (HCV) RNA six months following cessation of treatment—are approaching 100 percent. Even ten years ago this would have been regarded as science fiction.

    These drugs are quite expensive. But, are they worth it? 

    The fallout from the pricing of these drugs was inevitable, and closely mirrors what happened with HIV/AIDS about 15 years ago. Following a massive ten year campaign, which included contributions from virtually every major pharmaceutical company, drugs that could stop or slow the replication of HIV (and extend the life of HIV-positive patients) became available. These drugs were also expensive, and AIDS activist group showed their displeasure by, among other things, chaining themselves to the fences surrounding the homes of the CEOs of some of the companies that were selling the drugs.

    I am not aware of any fence chaining, but criticism of the price of HCV drugs—especially Gliead's Solvaldi, which costs $1,000 per pill—is fierce. In fact, the May 7th Medscape daily email entitled "Hepatitis C: Cure, but at what cost?" featured nine articles about the high cost, including "Costs to Public of USD 84,000 Hep C Drug 'Outrageous,' and "WHO Joins Clamor to Make New Hepatitis C Pills Affordable." 

    So, are these new drugs too expensive?  I guess that depends on whether you're buying or selling them. But, in order to determine the actual value of something like Solvaldi, you have to look at what it replaced—a therapy that was very difficult to tolerate, only modestly effective, and also rather expensive.

    The standard of care for hepatitis C only two years ago was a combination of interferon and ribavirin, and it was god awful—mostly due to the interferon. In his blog, "Antibiotics-the Perfect Storm," Dr. David Shlaes, the former head of infectious disease research at Wyeth elaborates: "Before Gilead’s Solvadi, the standard treatment was 24 – 52 weeks of interferon plus ribavirin.  Interferon causes fever, chills, depression, low blood counts and a number of other problems.  It has to be administered by intravenous injection monthly. Other drugs have to be used to counteract its side effects. Ribavirin is given as a pill (many pills) and causes anemia among other things.  Sometimes transfusions are required to maintain blood counts throughout a course of therapy. And after you have finished the entire course, the failure rate of this therapy can be as high as 50%."


    And let's not forget the costs of not using Sovaldi. A course of Interferon plus ribavirin costs $30,000. A liver transplant will set you back more than $500,000. And the anti-rejection drugs needed after the transplant cost $20,000 for the first year following transplantation.

    All of a sudden the 84K doesn't seem so bad, does it? And Sovaldi is the only interferon-free therapy that is approved by the FDA for treatment of hepatitis C. The first generation HCV protease inhibitors, Incivek (Vertex) and Virtrelis (Schering/Merck) significantly improved the cure rate, but these were only approved for use in combination with interferon—not in place of it.

    Other companies, notably AbbieVie, whose ABT-450 is expected to gain FDA approval soon, are studying interferon-free HCV drug combinations. These drugs will also be expensive. 

    But as Dr. David Berstein, chief of hepatology at the Center for Liver Disease, North Shore University Hospital, Manhasset, New York, and co-author of a paper in the May 4th New England Journal of Medicine said in a recent interview, “We in this country look at cost, because it costs a lot. But you are curing 97% percent of patients in 12 weeks–so, what is the value of that?”

    This is no time to fool around. These drugs have the potential to wipe out hepatitis C, which has infected three million Americans, and 170 million people worldwide—about four times that of HIV. 

    No- new hepatitis C drugs are not too expensive. They are appropriately expensive. Advances like this come up once in a lifetime. The companies that devoted many years and spent billions of dollars to make this happen should be rewarded. And when you factor in the high cost and high failure rate of the previous treatment, this actually becomes a bargain. 

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    Yeah, I can see how this is appropriately priced. Let's see, if they only treat 12,000 people over 12 weeks, they already made over a billion dollars.

    If they were to treat 3 million people, they would make over 250 billion dollars.

    I expect if that were to occur, we'd hear all the whining about how they don't make any money after funding research, so the next "big discovery" will again have to produce hundreds of billions in profits. Yeah ... "free market" economics. They're only doing what the market, er ... insurance companies can bear.

    Josh Bloom
    You clearly know nothing about this disease. It is the most prevalent chronic viral infection in the world, and a damn dangerous one at that.
    And it looks like you didn't even bother to read what I wrote. 

    The current treatments, which are terrible cost about half as much and half the people who suffer through a year of it don't even respond. Until these drugs became available there was NOTHING that could be done for the non=responders except a liver transplant at 8-times the price.

    And, since you know nothing about this, the forecast for Solvaldi sales in its first year is $8 billion, which you will have to round up pretty creatively to get to $250 billion. And this will surely drop once competing drugs hit the market.

    So, aside from the math and the virology, you got everything right. Nice job.

    Josh Bloom
    John Hasenkam
     “We in this country look at cost, because it costs a lot. But you are curing 97% percent of patients in 12 weeks–so, what is the value of that?”

    That is an stunning improvement of existing treatments. At present 12 months of IFN creates huge problems: severe depression, hair loss, fatigue, and a very long recovery period post therapy. 

    Josh, I thought the IFN+ ribavirin(? not sure of name, antiviral), had reached 80% success rate over 12 months. 

    This new treatment finally offers the potential to save gazillions because Hep C is the leading cause of liver transplants and liver cancer.  
    Josh Bloom
    John,  yes, Vertex's Incevek plus the other stuff has about an 80% SVR. But why use it? Last I looked it was about 40-50k, so an inferior therapy would cost more than a better one once you add the IFN/rbv
    Vertex did much of the heavy lifting in hep C and sales of Incev were about 500 million it it's first quarter. Then doctors started hearing about much better drugs right around the corner and advised their patients to wait
    Sales dropped by 90% and Vertex laid off 15 % of its work force. They will never even get back what they spent on the drug
    Josh Bloom
    What if you went to the ER for chest pain the doctor examined your total financial worth before deciding how much to charge for saving your life, taking everything? Hey, better than a heart transplant, no? Folks would be rightly outraged that their doctor behaved like a psychopath, yet we have come to expect no better from corporate "persons". This story is about the new corporate psychopath, with the corporations saying in effect: So, you want to live, so what is it worth to you? How much do you have, punk?" But drug pricing was not always this way. When penicillin was introduced, it was also a life saving miracle drug that was so precious the drug was purified from the urine of patients to recycle it for reuse. When introduced to the public, this life saving miracle drug was priced at $35, or about $2000 today for a course of treatment similar in length to Solvadi. And, pennicillin was a LOT more expensive and difficult to produce. Ditto the pricing of tetracyclines, erythromycin, methicillin, etc. Given the prevalence of HepC, this corporation is attempting to extract about $500 billion dollars from our economy, with the lives of infected persons held hostage. Adding to the outrage, Solvadi is the result of decades of public research investment in the basic molecular biology of viruses, an investment without which Solvaldi could not possibly exist.

    The answer is eminent domain, with the government seizing private property (the patent) for public use, with a jury deciding just compensation as required by law. If my government can take my home for a public purpose like a road, why not Solvadi? Nobody dies if a road is not built. A few eminent domain takings would have the beneficial result of bringing the concept of morality and the consequences of immorality to the discussions of modern pharmaceutical psychopaths that are setting the price of their latest products. "What the market will bear" is not an appropriate pricing mechanism for saving a life. If gutting a few patents is what it takes to make corporations responsible, I say bring it on yesterday.

    Josh Bloom
    Well, there's a swell way to completely eliminate (what's left of) new drug research. How many drugs came from the Soviet Union?
    Josh Bloom
    John Hasenkam
    Yes Josh, Sovereign Risk is often fatal to investment. Furthermore once the State gains ownership ongoing development of that product comes to a standstill. In medicine particularly this is disastrous because even after many years of testing wide scale clinical application leads to numerous therapeutic insights which then require more research and trials.
    "How many drugs came from the Soviet Union?"

    That is a straw man argument. Neither do infinite incentives give rise to infinite innovation. Neither does a lack of incentives give rise to a complete absence of innovation. Its really all about the thresholds for incentives, as scored by the public good. The very purpose of patents is to promote the public good, and if that sounds commie to you try reading the constitution. RIght now, the incentives do not give rise to optimal outcomes, they are primarily giving rise to exploding costs, not exploding outcomes.

    Josh Bloom
    You might want to bone up on your constitutional law. The purpose of patents is to protect intellectual property of individual inventors, and has nothing to do with the public good. And if you don't think this is an exploding outcome, you must have very high standards. Ask any gastroenterologist or liver specialist about this outcome. Or maybe ask the patients who will now live instead of dying from cirrhosis. 
    Josh Bloom
    "The purpose of patents is to protect intellectual property of individual inventors, and has nothing to do with the public good."

    Actually, the constitution as written: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The constitution gives congress the power to confer (or not) copyrights and patents

    Notice, that the purpose is "to promote the progress of science and useful arts". Obviously, the overreaching purpose is a public purpose, which is to promote progress by conferring state-protection. The purpose is not "to enrich without limit the personal fortunes of inventors by extortion of the sick to penury or death". If you look more closely, the founding fathers were divided on this issue with Jefferson often against and Madison saying: "But grants of this sort can be justified in very peculiar cases only, if at all; the danger being very great that the good resulting from the operation of the monopoly, will be overbalanced by the evil effect of the precedent; and it being not impossible that the monopoly itself, in its original operation, may produce more evil than good". If you had thought about my post, you would see clearly that I am not against patents, nor am I against wealth or incentives. I am against sociopaths, be they private or corporate, who use the fear of death and illness to extort as in this case. I am for persons, personal or corporate, who have a corporate purpose that is not maximal extraction, who improve the world, and do well by doing good, as in Eli Lilly and pennicillin.

    As for exploding outcomes, in this particular case, the outcomes are very good indeed. However, in many cases of egregious pricing (especially cancer drugs), the benefits conferred are modest (example: avastin, which increases survival 3-4 months at a cost of $100,000 per year).

    So, how about we just legislate all pills can cost no more than $1.00 US?

    But I'm going to guess that you missed how well that worked when Pres Carter did the same to the Price of Gasoline.
    Never is a long time.
    Josh Bloom
    I have written about expensive cancer drugs that do little or nothing. Those are NOT a bargain. This is. All drugs are not created equal 
    Josh Bloom