Gilead, the dealer behind the $1,000-a-pill hepatitis C drug Sovaldi, made $2.3 billion this first quarter solely off sales of the drug to 1 percent of the 3 million Americans who have the disease. That is really bad news for insurers, prisons and government insurance programs.
That $2.3 billion is massive. As The New York Times reports, Sovaldi has shattered the record for a drug's sales during its first quarter on the market, and probably even its first year. Incivek, another hepatitis C drug, made $1.56 billion during its first full four quarters on the market. Nationally, about 3 million to 4 million Americans, mostly Baby Boomers, have the disease, but the first-quarter sales of Sovaldi were to 30,000 patients. Many people don't know they have hepatitis C, but insurers are also limiting who is eligible for the treatment. “We are telling folks to wait for a while on less urgent cases,” William E. Golden, the director of Arkansas's Medicaid Program, told the Times.
As we've explained before, Sovaldi is a "breakthrough therapy" in the hepatitis C world. It works faster and better than anything else on the marker, but it also costs at least $84,000 a person. The previous treatment cost $6,600. Lawmakers and insurers have come out against the insane price of the drug, arguing that the high concentration of hepatitis C in low-income communities means the drug will put a lot of pressure on Medicaid and, on the insurer side, it will eat in to profits. That's already happening — UnitedHealth Group said last week that the drug was one reason for its declining profits. Prisons, which have much higher concentrations of hepatitis C (12 to 35 percent, as opposed to 1 to 1.5 percent of the general population) have informed Congress that this will raise costs.
The bright side to all of this is that there are new hepatitis C drugs being developed, which may force Gilead to price Sovaldi more competitively. In the mean time, America's sky high payments on the drug are subsidizing costs in developing countries. A full Sovaldi treatment costs just under $840 in India, Egypt, and Brazil.