Gilead Sciences (NASDAQ: [[ticker:GILD]]) is deep into a campaign to defend its hepatitis C drug franchise from price attacks, and its executives are fighting back with tough questions.
Take this one, for example, that Gilead president and COO John Milligan asked today on stage at the BIO CEO & Investor Conference in New York: Is it more valuable to extend a cancer patient’s life by a few months or years, or to cure someone of hepatitis C and allow him or her to return as a productive member of society?
“We don’t have conversations like that in oncology,” Milligan said. “Keeping somebody who is 75 years old alive for 5 more years, we understand that’s valuable to that person and that person’s family. It’s not necessarily valuable to society the way getting a person back to work would be.”
By openly questioning why the high prices of cancer drugs aren’t also under siege—at least as of yet—he was treading sensitive ground, and not only because Gilead also has aspirations in cancer.
The American Society of Clinical Oncology has also raised concerns. Its website notes that patients and oncologists are often in a tough spot having to pay exorbitant price tags for treatments with “measurable but sometimes modest health benefits.”
But extending the lives of cancer patients is sanctified, regardless of the price they cost. And some of those prices have soared beyond Gilead’s price tag for its hepatitis C regimens. Three recently approved cancer drugs—nivolumab (Opdivo), pembrolizumab (Keytruda), and palbociclib (Ibrance)—all cost close to $120,000 per year or more.
The United Kingdom’s National Institute for Health and Care Excellence tried to push back a few years ago when it rejected, due to high price, sunitinib (Sutent) and three other drugs, despite data showing they would help people with metastatic kidney cancer live longer.
The institute changed its stance on sunitinib after a public uproar.
Milligan argued today that Gilead’s two new hepatitis C drugs, sofosbuvir and sofosbuvir-ledipasvir—sold as Sovaldi and Harvoni and approved by regulators in the past year or so—provide significantly more value. Rather than adding time on to the end of someone’s life, Milligan noted that Gilead’s hep C drugs are curing relatively young people and letting them become productive members of society again, which creates broader societal and economic value.
“That isn’t valued by the payers in any great way, which is surprising to me,” he said.
It’s unclear if Gilead has ever done an economic impact study of hepatitis C; company representatives did not return calls by press time. Other diseases, however, have been the subject of such studies. For example, the Alzheimer’s Association estimated that the economic burden of Alzheimer’s on society would rise to $1.2 trillion in 2050 from roughly $200 billion today.
Milligan’s comments were the latest salvo in the ongoing pricing war over Sovaldi and Harvoni. Those drugs have been in the crosshairs of pharmacy benefit managers like Express Scripts (NYSE: [[ticker:ESRX]]) and politicians in Washington. Gilead listed their prices at $84,000 (for Sovaldi) and $94,500 (Harvoni) for a normal 12-week course of treatment, but Express Scripts and others have negotiated discounts by pitting those drugs against new competitors.
They are able to do so because Sovaldi, Harvoni, and AbbVie’s Viekira Pak are all significant medical advances, oral therapies that cured as much as 99 percent of people who took them in clinical trials.
Sovaldi was the first, and it completely changed how hepatitis C is treated. But there are millions of people infected with the virus, which can often lead to cirrhosis or liver cancer. With prices in the range of what are known as ‘orphan’ drugs—therapies for small groups of people with a rare disease—Sovaldi has put drug pricing in the limelight.
Gilead paid an astounding $11 billion for Pharmasset in 2011 to get ahold of Sovaldi. Gilead had to make sure to justify that high price tag.
The FDA approved Sovaldi in December 2013. When the pricing details came out, protests erupted outside the
