[Ip-health] Pharmalot: How Much? A Battle Over The Cost Of The New Hepatitis C Drugs

Joanna Keenan-Siciliano joanna.l.keenan at gmail.com
Tue Nov 12 03:20:45 PST 2013

How Much? A Battle Over The Cost Of The New Hepatitis C Drugs
Posted Mon, 11/11/2013 - 8:59am by Ed Silverman 4

As excitement mounts among physicians and investors over a new crop of
drugs for treating hepatitis C, there is also concern that patients in
developing countries may not have sufficient access due to high prices. But
a recent poster presentation at a medical conference suggests that
drugmakers can produce these new medicines for relatively little cost and
should be compelled to do so.

The analysis, which was displayed at the American Association for the Study
of Liver Diseases gathering last week in Washington, DC, concluded that
large-scale production of direct acting antivirals may be possible for as
little as $100 to $200 for 12 weeks of treatment. The estimate cited HIV
drugs, which initially cost tens of thousands of dollar per patient but
have since dropped in price, as a framework.

This group of drugs includes sofosbuvir, which is made by Gilead Sciences
and was unanimously endorsed by an FDA panel last month. The treatment
offers a higher cure rate with less toxicity and a shorter duration for
treatment than a pair of medicines approved two years ago, which explains
the enthusiasm on Wall Street, where pricing is expected to be $80,000 to
$90,000 per patient in the US.

The FDA panel voted in favor of approving sofosbuvir for patients with
hepatitis C genotypes 2 and 3 in combination with an older medicine called
ribavirin. If approved, the drug will be the first all-oral treatment for
these strains. The panel also endorsed the drug for combating genotypes 1
and 4 in combination with ribavirin and interferon in patients who have not
already received therapy. The vast majority of HCV cases involve genotype 1.

“Gilead does not have expect to have high gross/net discounting in this
segment, since they will not have a lot of competition initially and
because the key driver of discounts is taking price increases over time,”
wrote Citi analyst Yaron Werber in a recent investor note. The formal FDA
approval date for this drug, by the way, is December 8.

Such pricing estimates are prompting worries that such medical advances
will be out of reach for patients in poor countries – and perhaps some in
the US - unless Gilead and the other drugmakers that are developing DAAs, a
group that includes Bristol-Myers Squibb (BMY) and AbbVie (ABBV), agree to
sell their drugs for much lower prices.

“It only takes a few grams of these drugs to cure hepatitis C,” says Andrew
Hill of Liverpool University, one of the researchers. “Companies have a
choice: continue treating a very small number of people with hepatitis C at
a very high cost, or expanding access to these treatments, lowering
treatment costs significantly, and working towards eradication of this
disease” (here is the analysis).

A key issue is that there are no international agencies or groups that
purchase hepatitis C drugs for distribution to poor countries. Meanwhile,
there are anywhere from 130 million to 150 million people are infected
worldwide. In the US, there are approximately 3 million to 4 million people
infected with hepatitis C in the US, but less than 60,000 are being
treated, according to Gilead.

In other words, demand is expected to mushroom, setting up a potential
clash over availability. Even in the US, the situation is expected to
become exacerbated as physicians await FDA approval for the newest drugs
and more patients are found to be in need of treatment now that the US
Preventive Services Task Force recommended testing for hepatitis C.

“If the current high prices continue, it is likely that very few people
will be treated and the overall epidemic of hepatitis C in the USA will
continue unchecked,” Hill writes us. “It is only by lowering the prices,
and treating more people, that there could be a real change in the USA.”

In the analysis, Hill and a colleague assumed that the production cost per
gram of a hepatitis C drug was between one to 10 times higher than the
equivalent HIV antiretroviral, depending on the complexity of chemical
synthesis. The production cost of sofosbuvir, for instance, was estimated
at $68 to $136 for a 400mg dose for 12 weeks.

We asked Gilead (GILD) for comment and will update you accordingly.
[UPDATE: A Gilead spokeswoman declined to comment, but added that it is
"premature" to discuss pricing.]

In response, Doctors Without Borders, which hopes the oral DAAs can place
the ease of treating hepatitis C on a par with treating HIV, issued a
statement exhorting drugmakers to make their forthcoming medicines
affordable on a large scale. If not, the advocacy group suggested that
drugmaker may find themselves confronting countries willing to issue
compulsory licenses.

“We urge companies expected to bring these drugs to market soon to price
new hepatitis C regimens at below $500 in developing countries, and for
countries affected by the disease to consider ways to overcome patent
barriers to allow the production of more affordable generic versions,” says
Manica Balasegaram, who heads the group’s Access Campaign

Hill acknowledged some limitations to the analysis. For instance, more
precise estimates of production costs require pilot production batches and
more detailed analysis of process chemistry. And access to DAAs at minimum
prices in developing countries will depend on the level of enforcement of
patent restrictions.

Joanna Keenan
Press Officer
Médecins Sans Frontières - Access Campaign
P: +41 22 849 87 45
M: +41 79 203 13 02
E: joanna.keenan[at]geneva.msf.org
T: twitter.com/joanna_keenan


More information about the Ip-health mailing list