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  (Source: South Park Studios/Comedy Central)
Who says money can't buy a cure? Taxpayer money will fund much of the drug's costs in the U.S.

Characterized by inflammation of the liver, Hepatitis C remains one of the most common and dangerous viral epidemics afflicting mankind.  Spread via blood-to-blood contact -- typically via unsanitary medical equipment, blood transfusions from a carrier, or sharing of needs during intravenous drug use -- the chronic variant of the disease afflicts an estimated 150-200 million people worldwide, including roughly 3.2 million individuals in the U.S.  Symptoms include fatigue, cognitive deficiency, cirrhosis of the liver, and a predisposition to liver cancer.

I. From AIDS to Hepatitis C -- Gilead Ready to Storm New Market

But now a drug cocktail devised by Gilead Sciences (GILD) is claiming a 100 percent cure rate -- if you can pay its high asking price.

Gilead's solution is called Solvadi, and in Dec. 2013 it won approval from the U.S. Food and Drug Administration (FDA) following incredible Phase III clinical trial results.

Gilead
Gilead -- a top AIDS drug company -- is sitting on another goldmine, with exclusive rights to produce the first real "cure" for Hepatitis C. [Image Source: AP]

Founded in 1987 by Dr. Michael L. Riordan, a graduate of the Johns Hopkins School of Medicine and the Harvard Business School, Gilead was a pioneer in gene therapy medications, and perhaps the first truly succesful creator of drug cocktails to block the progress of the AIDS virus.

So naturally, when Gilead turned to a new epidemic -- Hepatitis C -- it pulled out its old tricks.  Using a type of gene therapy known as nucleotide blockers, Gilead tested mixtures of drugs before finally coming to the perfect combination -- sofosbuvir, ledipasvir, and ribavirin.

Solvadi logo

The cocktail is branded under the trade name Solvadi in the U.S.  But before we get to the glaring issue of its sky-high costs, let's look at how it's made and what's in it.

II. Sofosbuvir -- the $11B USD Hired Hand

The first component in the cocktail is Sofosbuvir, a compound that interferes with the RNA polymerase that the virus uses to replicate itself.  The compound was under development by Princeton, New Jersey Pharmasset, Inc. from 1998 to 2011.

In many ways Sofosbuvir is similar to past experimental drugs that essentially mimic a ribonucleotide, selectively stalling the production of viral RNA.  The problem with past drugs was that the creation of triphosphate variants -- a necessity to make the drug usable by the viral polymerase -- was way too slow.  

Sofosbuvir solves this problem by bundling the first phosphate in.  Normally that phosphate would be too reactive, but Pharmasset protected it with an anisole (see the benzene ring) derived side chain and an alanine derive second side chain bonded to the phosphate on the amino end.  In the cell, enzyme strip away these protection molecules quicky.  The naked phosphate has skipped the slow step and transforms into a triphosphate quickly.  But when used by the viral polymerase the fluorine (in place of a hydrogen) clogs up and "breaks" the transcription process.
Sofosbuvir
Sofosbuvir -- one of three drugs that form Solvadi [Image Source: Wikimedia Commons]

By itself, Sofosbuvir has a relatively high chance of completely eliminating a Hepatitis C infection.  Gilead wisely saw the value in Sofosbuvir and in 2011 purchased Pharmasset for $11B USD.  Stifel Nicolaus analyst Maged Shenouda at the time of the purchase, commented:

It could be the dominant player in a new, non-injectable paradigm for the treatment of hepatitis C.  That's the bet, but it's a big bet at $11 billion.

University of Michigan's Ross School of Business Professor Erik Gordon complained at the time that the purchase was an "amazing risk".  He commented:

At that price, everything had better work perfectly.

But everything has worked perfectly and Gilead has proved its doubters wrong, at least on a technical basis.  Used alone the price of Sofosbusvir in the U.S. (for a 12 week course of treatment) runs from between $84,000 USD and $168,000 USD, according to media sources.

III. Ribavirin, the Tried-and-True Multipurpose Veteran

The second component of Solvadi is a guanosine analog called Ribavarin, in which the fused ring responsible for base-pair bonding is broken.  Ribvarin suffers from the problem mentioned above that Sofosbuvir aimed to solve -- it has no bonded phosphate.  While that allows for a simpler (read: cheaper) molecule, it also makes it act much slower.

Ribavirin
Ribavirin, an anti-viral gene therapy treatment [Image Source: Wikimedia Commons]

Nonetheless, Ribavarin has showed itself as a useful treatment against a wide variety of RNA and DNA viruses, plus against certain cancers.
Ribavirin
A 3D model of Ribavirin [Image Source: Wikimedia Commons]

Ribavarin is produced by a number of companies in various countries, and has been used since the 1970s.  However, by itself it's not terrible affective in combatting chronic Hepatitis C.

IV. Ledipasvir -- The New "Secret Sauce" of Solvadi

But the secret sauce of Solvadi is Ledipasvir, a massive, bizarre manmade concoction.  How exactly Gilead devised this massive molecule is anyone's guess, but a solid bet would be a lot of modeling and a lot of trial and error.

The molecule appears to mimick certain small protein factors and inhibits HCV NS5A, a crucial Heptatitis C protein.  HCV NS5A is thought to be the boss protein of sorts, controlling where Hepatitis C hides in cells, when it chooses to go active, and recruiting the NS5B protein -- Hepatitis C's RNA polymerase -- to replicate the viral genome.
 
 
Ledipasvir
Ledipasvir, is the complicated third component for Solvadi.  It interferes with a key Hepatitis C protein. [Image Source: Wikimedia Commons]

Gilead's massive compound interferes directly with the protein.  By killing the boss, it delivers a fatal blow to viruses.  It might not always work, but combined with Sofosbuvir, it's a deadly duo.  The Ribavirin just adds to the fracas, further punishing the hapless virus.

NS5A
Ledipasvir interferes with the 5A factor, a "boss protein" that tells Hepatitis C proteins how to act inside a cell. [Image Source: Virology]

Together this trio -- one modestly effective legacy drug, one moderately and highly effective modern drug purchased from a third party, and one massive in-house-created bizarre superdrug -- can kill virtually any Hepatitis C infection.  But it's going to cost you.

V. Sorry, Americans, You Have to Pay More

Controversy is growing over Solvadi's asking price.  

The trio can cure 90 percent of chronic hepatitis patients within 3 months, but its official price is $1,000 USD a day, so that treatment is roughly $90,000 USD.  For those able to afford longer treatment regimens, the cost may accumulate to a couple hundred thousand dollars, but the cure rate rises to 100 percent.

Solvadi bottle

There are other treatments to Hepatitis C, but the problem is that many of them have many bad side effects.  By contrast Solvadi has virtually no known side effects.

Doctors are under pressure to prescribe it.  Insurance companies are bracing themselves for the pressure to pay for it.  Some consumers may be forced to pay part of the massive costs out of pocket.  But Gilead has the only guaranteed cure.

Forbes estimates that Gilead could make $227B USD if it treated all the Hepatitis C infections in the U.S. alone.  And considering that as little as 1 out 100 infections worldwide occurs in the U.S., the global market could easily make Solvadi a $1T USD drug.

Until the pending insulin pill reaches the market we may not see another drug that has such a massive and disruptive impact on the insurance and medical industry.  According to The Wall Street Journal American insurance companies may see their earnings cut by 18 percent due to the incredible cost of the drug.

To Gilead, it's doing nothing wrong asking so much. It reminds its critics of the $11B USD it paid for Sofosbuvir and the literally billions spent on clinical trials to win FDA approval.  That $11B USD is certainly looking like an incredibly small price to pay for one of Solvadi's key components at this point.

Gilead protest
[IMage Source: AIDS Healthcare Foundation]

The drug's high costs -- and the similarly high costs of Gilead's AIDS treatment drug cocktails -- have provoked recent protests against Gilead in San Francisco and other major U.S. cities.

The company has tried to silence critics by offering the $1,000 USD drug at discounts based on an intriguing tiered pricing scheme that works with insurance companies to offer discounts based on the GDP in each region.

Based on Gilead's tiered pricing scheme, the U.S. patients (and their insurers) will pay the most -- roughly $84K USD.  By contrast German patients will pay $66K USD, and UK patients pay $57K USD, according to Reuters.  And the Associated Press reports that patients in Europe will receive a 99 percent discount, only paying $900 USD out of pocket.

Solvadi
Buyers in Egypt will pay only $900 for a 90-day regimen of the drug that costs $84,000 USD in the U.S. [Image Source: Getty Images]

It's unclear exactly how much the pill -- and the three drug molecules blended into it -- cost to make.  But even with the complex Ledipasvir, it likely costs under $10 USD to produce a week's dose.  In that regard the U.S.'s "discount" may be going from a hundred-fold markup to a roughly ten-fold markup -- still enough to anger many.

VI. Tax and Prescribe

The pill could lead to higher taxes for Americans.

An estimated half of the nation's Hepatitis C infections occur in people on some form of guaranteed federal medical assistance -- veterans, prisoners, uninsured, or those on Medicaid.  The government is expected to have to pay taxpayer money to buy the treatment.

tax me more
[Image Source: American Dream Report]

That could add as much as $100B USD in a temporary surge in the federal budget, plus a couple billion per year in ongoing costs.  Many would argue that's a small price to pay compared to the loss in productivity that untreated hepatitis infections causes.  Nonetheless, some dependent groups (e.g. prisoners) may stoke more controversy that others.
 
A letter [PDF] from the House Energy & Commerce Committee, signed by Rep. Henry Arnold Waxman (D-Calif.) -- the ranking member -- and other committee members, pointedly asks Gilead to explain its pricing strategy and how it make affect public health.
 
Henry Waxman
Rep. Henry Waxman (D-Calif.) isn't happy with Gilead. [Image Source: Infowars]

The letter clearly subjects Gilead to some negative publicity, and compels it to respond.  But will it force it to lower prices in the U.S. and shrink its windfall?  Probably not.

VII. Don't Even Think of Buying Solvadi in Canada, That's a Felony

As Gilead knows all too well, the federal government may whine and moan, but in the end, it typically ends up paying with taxpayer money.  The U.S. doesn't have any publicly funded guaranteed healthcare solution -- be it provided by the government itself or via private sector contractors (the model Canada and Europe adopt).  

Even under "Obamacare" -- the program that regulates the insurance and hospital marketplaces -- patients are merely guaranteed the ability to buy insurance and treatment.  Americans have no universal healthcare solution, nor do they have the ability to collectively pool to buy drugs at a lower cost from drugmakers as Canadians do.  It's actually illegal for Americans to engaged in so-called "drug reimportation" by purchasing prescription drugs at cheaper rates in Canada.

Drug reimportation
In America it's illegal to buy drugs that are legal in the U.S. at a cheaper price in Canada or Mexico. [Image Source: United Republic]

Many Americans are so desparate to get treatment that they'll risk prison time to buy their needed medications in Canada, where they can afford the costs.  The broken system has also created a thriving black market of smugglers who transport large amounts of pharmaceuticals, including heart medications and AIDS medication, from Canada and Mexico.

While this "cartel" of sorts appears to be providing a service to Americans, it is also actively opposing the U.S. government's FDA which is backed by the big money pharmaceutical lobby.  And that means no matter how many Americans they're helping to treat or cure, smugglers face stiff prison fines from their government cartel rivals, if caught.

VIII. Taxpayers Pay Big to Treat America's Record-Setting Prison Population

But while the U.S. government offers no universal public healthcare, it does offer its own health insurance to select government dependents, including its prison population.  And that means the U.S. does sort of have a public healthcare system that mirrors Canada or Europe -- but only Americans behind bars get to enjoy it (at the expense of everyone else).

If the U.S. had incarceration rates like Canada or Europe, that wouldn't be as big a concern to taxpayers.  With incarceration rates quadrupling since the 1980s, the U.S. now imprisons more of its people (officially, at least) than any other nation in the world.  Currently an estimated 2.4 million Americans are "in prison" at jails, traditional prisons, and other forms of confined sentencing.  That means that 1 in 100 Americans is behind bars.

When Americans hear the phrase the 1 percent they typically think of the wealthiest 1 percent of Americans, the group whose income is riding at record highs, accounting for a fifth (20 percent) of the income earned by all Americans.  But when it comes to expensive drugs America is facing a crisis involving a different 1 percent -- the 1 percent of Americans in its record-holding prison population

Prison bars
Approximately 1 percent of Americans are behind bars; those with Hepatitis C get free treatment at the expense of taxpayers.  Law-abiding U.S. taxpayers do not receive this perk.
[Image Source: AP]

A 2001 study [PDF] estimated that of the nation's 20,000+ HIV positive prisoners, each would infect roughly 4 other people -- including fellow prisoners in incidents of rape or concensual homosexual sex.  The estimated cost of treating the prisoners and federal dependents they infect was estimated to be $125,000 USD.  And society itself is estimated to bear an addition $550,000 USD in costs (e.g. from members of the public they infect, or lost productivity).

Those numbers skirt the fact that the government avoids paying for the most expensive and potentially most potent cocktails of drugs -- something many insurance groups do as well.  Such pricey cocktails often remain the privilege of America's ultra-wealthy as parodied in the South Park episode "Tonsil Trouble".

South Park AIDS cure
Turns out money really does cure disease! [Image Source: South Park Studios/Comedy Central]

Gilead has applied for FDA permission to treat patients with a blend of just Ledipasvir and Sofosbuvir.  This could cut costs, but whether the biggest winner is Gilead or the U.S. consumers remains to be seen.

For now, when it comes to Hepatitis C the sucess rate is so high and the distinction between Solvadi and other less effective solutions is so stark that the federal government will likely be forced to pay for $84,000 pill program.

Solvadi in hand

That's bad news if you're an average payer, but music to the ears of Gilead and its investors who are salivating at their potentially trillion dollar drug.

Sources: House Energy & Commerce Committee, FDA [press release], Reuters, Gilead



Comments     Threshold


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This is why...
By KCjoker on 4/3/2014 6:18:46 PM , Rating: 2
This is what always happens. The US taxpayer funds the research for new drugs/surgery/etc...so we pay more for healthcare than other countries. That's why it's always funny to hear people from other countries bash our healthcare. Guess what the research that develops these things isn't FREE and never will be. Someone has to pay for it.




RE: This is why...
By Nutzo on 4/3/2014 6:31:04 PM , Rating: 5
The US pays more so these countries with socialized health care can pay less.

I think it would only be fair that we pass a law here in the US, that these companies cannot charge prices in the US that are more than 10% higher than the average price they charge in all other countries.

That would leave them with no choice but to have a huge cut in thier profits, or make all these freeloading countries start paying thier fair share.


RE: This is why...
By StevoLincolnite on 4/3/2014 6:47:28 PM , Rating: 5
Well. The USA does fund and research most medical advances for sure, but some smaller countries with universal health care have done the same.

However, it all comes down to capitalism.
There might only be a very tiny handful of people in Egypt that could afford 80 thousands bucks, but there is actually a large percentage of Americans that could afford it, even if they got a loan.

Thus, they charge the maximum amount the market will tolerate.

With that in mind, my own country helped make penicillin compatible for human use, even with our universal health care. :P
We also invented the pacemaker, bionic ear, ultra sounds, flu vaccine etc'.
Which ain't to bad for a nation with less than 8% of the US's population.


RE: This is why...
By ritualm on 4/3/2014 7:35:56 PM , Rating: 2
At the end of the day, the burning question to ask in regards to Solvadi: Is your healthy life worth more than $1000 per day?

Most of the world's Hep-C patients won't pass that question without a government subsidy.


RE: This is why...
By Ammohunt on 4/4/2014 12:23:45 PM , Rating: 2
And there in lies the main issue with government funding of health care. So the question becomes will the taxes collected on your earnings during the rest of your life equal or exceed the amount of spend for treatment to prolong your life? If the answer is no then your life is not a good investment and a losing bet for the Government and the Taxpayer. The many downsides of willingly being property of the state.


RE: This is why...
By Motoman on 4/4/2014 5:30:19 PM , Rating: 2
I think the burning question to ask is why the pharma company is charging $1,000 a day for it.

This is one part of why US healthcare costs are so laughably higher than every other country in the world - everything's a scam, from the prices that pharma companies charge for meds, to the vast numbers of unnecessary diagnostic procedures done by hospitals, all of which are done to milk the health insurance industry for maniacally-massive profit margins - which then trickles down to consumers, who are the ones paying twice what anyone else does for healthcare, and winding up with poorer health.

The US healthcare system, across the board, is a predatory monster preying on US citizens. You can't pick any one cog on the wheel and point your finger at it...it's ALL f&cked up.


RE: This is why...
By sleepeeg3 on 4/3/14, Rating: -1
RE: This is why...
By Bobhacks on 4/4/2014 12:36:19 AM , Rating: 2
I completely disagree. I agree there is a lot of red tape and rules for pharmaceutical companies but it is for the safety of the people. Do not want long trials to make sure a new drug is safe or the long term side effects. It's great if a new NSAID stops pain but is it worth it if you die of heart problems in 5 years?

Major pharmaceutical companies are always just trying to make a buck and they aren't even producing new drugs, most are just "me too drugs". Example, Duexis , this drug is just pepid and advil put together. But they charge almost $900 for 90 tabs. What is the justification for the price? I can list sooo many drugs they just take existing drugs and rebrand them so they can get insurance companies and Medicare or Medicaid to pay for it.

Prices aren't cheap in Egypt because of capitalism. It is because people there could never afford what they charge Americans. So instead of not making any money in Egypt they rather charge lower prices to make some money. Why charge $100 if no one will pay it. Instead charge $10 and make something instead of nothing.

I work in the pharmaceutical field and I will take you the system in America is screwed up because of pharmaceutical lobbyist.


BLAME THE POLITICIANS BOTH DEMS AND REP


RE: This is why...
By invidious on 4/4/14, Rating: -1
RE: This is why...
By bupkus on 4/4/2014 11:21:47 AM , Rating: 3
Ha ha ha ha ha...
Do you have a license to teach "stupid".


RE: This is why...
By FaaR on 4/4/2014 1:15:33 PM , Rating: 3
quote:
Government imposing safety requirements is absolutely a form of socialism. I'm not saying it is necisarily a bad thing, but it is certainly not a capitalist thing.

Wut.

Capitalism is an economic system. It has nothing to do with imposing safety requirements on things.

Anyway, people arguing there shouldn't be safety requirements for things because that costs money are complete and utter idiots, and probably should not be allowed to hold positions of power, or possibly even breed. Such talk is incredibly dangerous to society as a whole.


RE: This is why...
By thurston2 on 4/4/2014 10:57:36 PM , Rating: 4
You Tea Baggers are even dumber than I thought. I lost a couple of IQ points reading that post.


RE: This is why...
By ianweck on 4/7/2014 12:14:21 PM , Rating: 2
quote:
With that in mind, my own country helped make penicillin compatible for human use, even with our universal health care. :P
We also invented the pacemaker, bionic ear, ultra sounds, flu vaccine etc'.
Which ain't to bad for a nation with less than 8% of the US's population.


You sure about all of that? You're in Australia right? So far I only see the bionic ear invented there, everything else was elsewhere. Not trying to flame you, I'm just curious.


RE: This is why...
By coburn_c on 4/3/14, Rating: 0
RE: This is why...
By DocScience on 4/3/14, Rating: -1
RE: This is why...
By bupkus on 4/4/2014 11:26:59 AM , Rating: 2
Gotta love this DailyTech. ;-)


RE: This is why...
By FITCamaro on 4/4/14, Rating: -1
RE: This is why...
By Flunk on 4/4/2014 4:56:03 PM , Rating: 3
That's not how it works, patents for medication last for 20 years. After that point it's open season for generic drugs.


RE: This is why...
By DocScience on 4/3/2014 8:39:41 PM , Rating: 1
Thanks to the ultra cautious US drug regulatory environment, the cost to FDA certify a new drug for sale is running between $500 million and $1 BILLION... and typically eats up 1/2 or more of the protection time of the patent, which, when expired after 20 years, allows others to make and sell the drug without royalty.

If the drug companies can not recoup this cost in the 5-10 years they have patent protection, because say, some idiot anti-business ideologues pass a law which forbids higher prices in the US from those nations which just steal the property with ZERO value add, then those drug companies will STOP creating new drugs.

Simple, right?
You SURE that's what you want comrade?


RE: This is why...
By bupkus on 4/4/2014 11:44:18 AM , Rating: 2
Your point is tangential at best. In this case I believe the profitability of Gilead's product is protected by their pricing tier...and then some.

I suspect Gilead looks at a maximum profit model and pursues a production and pricing scale to match. Locally, as in the USA, Gilead seems to be following a cost per patient both with and without the Solvadi solution to set their price.

The result would seem to argue that with Solvadi turns out to be cheaper in the long run than without.


RE: This is why...
By marvdmartian on 4/7/2014 8:43:18 AM , Rating: 2
Well, let's not forget the MILLIONS in political contributions (read: BRIBES) they make, every year, to ensure they keep this system in place. And now, thanks to the Supreme Court, they can even increase those contributions, as high as they want to go.

I'm sure they're barely scraping by, as it is though, huh?

The real truth is that the pharmaceutical companies, who convinced the politicians that drugs sold outside the USA are dangerously unsafe (remember when they shut down Canadian and Mexican pharmacy purchases??), the fact is that the drugs sold in Canada, Mexico and the USA are all produced in INDIA, for pennies per dose.

It's only when they reach the shores of the good ol' USA, that the value magically goes up to stratospheric heights (much like Apple products, eh?).

So PLEASE, don't preach about how hard these companies have it. Not when we see drugs costing $25/dose dropping to $0.25/dose when they go generic, like what happened with Prozac. The ONLY reason we pay more, is because we have insurance to cover the majority of the cost. And now, thanks to Obamacare (and all the politicians getting their bribes), we now have MORE people with insurance.


RE: This is why...
By FITCamaro on 4/4/2014 9:13:12 AM , Rating: 2
No it would mean these companies stop developing these drugs as other nations have price fixing in place and the US can't make them change their prices.

Just all part of the plan though to push the private sector out of health care and make everything dependent on the government.


RE: This is why...
By DrApop on 4/4/2014 11:21:27 AM , Rating: 2
Medicare/medicaid have "price fixing" too.

And we could reduce the price of this drug too if the insurance industry just said..."We are only going to pay $5,000 max for the drug". You better believe the company would reduce their price real darn quick here in the US otherwise there would be no market for the drug.

Regardless, because the way our healthcare system and insurance industry works, we end up subsidizing drug for most of the countries around the world.


RE: This is why...
By FITCamaro on 4/4/2014 11:45:33 AM , Rating: 2
Again, then the companies who develop it will stop developing them.

Another person said the real problem. Companies spend billions of dollars developing drugs. For every one that makes it plenty of others don't. And then once they spend all that money to develop the drug. They can only really make anything on it in the US. And they only have a limited amount of time to do it. So they have to charge extremely high prices in order to do that.


RE: This is why...
By Jeffk464 on 4/8/2014 4:55:07 PM , Rating: 2
Remember Bush passed a bill that prevents the government from negotiating the price of drugs.


RE: This is why...
By bupkus on 4/4/2014 11:47:13 AM , Rating: 2
quote:
No it would mean these companies stop developing these drugs
And I suppose Atlas would just shrug...right?


RE: This is why...
By chripuck on 4/4/2014 12:40:29 PM , Rating: 1
No, it's simple really, without implementing any sort of socialistic price control policy. Allow for re-importation of medicine.

If they sell it in Europe for 1/100th the cost, then allow third parties to bring it from Europe back to the US to be resold. Gillead would change their tune REALLY fast.

But that's not what Obamacare was really about. It was purely about setting up another dependent voting block.


RE: This is why...
By FaaR on 4/4/2014 1:11:00 PM , Rating: 5
You pay more for health care mostly because of your insurance-based payment system, NOT because you alledgedly fund drug research. Please inform yourself as to proper cause and effect relationship in this matter.

Insurance companies' profit margins are what's causing your costs to stampede into the stratosphere. Cut out your middle-men and you'll all benefit. Then you could enact socialized medical care like in europe and see a further drop in costs and taxes as overall productivity in society rises when everyone can get treatment for their medical problems, instead of not being able to work, and/or going bankrupt due to massive medical bills.


RE: This is why...
By Hammer1024 on 4/4/2014 1:42:59 PM , Rating: 5
Please direct me to the information that US taxpayers funded this research?

WE are funding purchasing the cure rock head.

And no I don't like that, but I like disinformation and misinformation even more!

Back into your cave Troll.


RE: This is why...
By inperfectdarkness on 4/4/14, Rating: 0
RE: This is why...
By BZDTemp on 4/4/2014 3:22:06 PM , Rating: 3
No this is not what always happens. In fact you're very far from the truth. What happens is that as with everything else the market forces control what happens, this means companies will charge what they can for their products be it petrol, beer, drugs, toys...

For health products that means the rich countries pay so this of course means the US pays, but so does every other rich country ins this world. Stop whining about it and be glad you live in a place where there is money for medicine, there are lots of places where even the most basic medicine isn't available.


RE: This is why...
By Jeffk464 on 4/8/2014 4:46:59 PM , Rating: 2
I might not be no genius but it seems to me a plane ticket to Egypt is significantly cheaper than $84,000.


RE: This is why...
By senecarr on 4/9/2014 1:49:47 PM , Rating: 2
Let's just look at some numbers from the article. Gilead could make $227B USD for treatments of everyone in the US, and potentially $1T world wide. It bought the rights to one drug for $11 Billion, and let's be generous and say their super drug treatment, the other big part of the cocktail, took twice as much cost in research. So say there was roughly $33 billion of research, and let's through in $1 billion extra in manufacturing / distribution etc costs.
Are you saying the extra $193 (227-34) Billion is really explainable as financing the rest of the world's research? We're paying more for the drug because we're horrible at negotiating if we're willing to pay that kind of markup, not because the research itself is expensive.


Airplane Ticket
By Mitch101 on 4/3/2014 6:05:01 PM , Rating: 2
Whats to prevent someone from flying to Egypt and throwing down a G note?




RE: Airplane Ticket
By chµck on 4/3/2014 6:11:48 PM , Rating: 2
israel


RE: Airplane Ticket
By superPC on 4/3/2014 6:26:19 PM , Rating: 2
From the article:
quote:
It's actually illegal for Americans to engaged in so-called "drug reimportation" by purchasing prescription drugs at cheaper rates in Canada.


That's what preventing it. If that someone manages to avoid getting caught than good for him/her.

I'm not defending the drug company here, but in a few years, there's going to be a generic drug for this treatment (http://en.wikipedia.org/wiki/Generic_drug ). In the US, other drug company can made a generic product after 12 years of drug introduction to market. This give small window of opportunity to get major profit from this discovery. It seems bad now, but in 12 years, this hepatitis C treatment will be affordable with generic.


RE: Airplane Ticket
By ritualm on 4/3/2014 7:05:23 PM , Rating: 2
12 years is unlikely, especially when you consider the miserable state of affairs that is the USPTO.


RE: Airplane Ticket
By drevas2528 on 4/7/2014 12:01:49 PM , Rating: 2
No, it's not likely at all. My wife was on a Drug that for us had a co-pay of $30, now the Generic version we get is less then $8. A BP Med I take went from a copay of $22 to less then $5.

The regs. are already on the books, no intervention by the Patent office is necessary.


RE: Airplane Ticket
By corduroygt on 4/4/2014 12:00:30 AM , Rating: 2
Importing 90 days supply of prescription drugs for personal use is legal.


RE: Airplane Ticket
By laviathan05 on 4/4/2014 9:15:26 AM , Rating: 3
But a 3-month vacation in Canada to take the drug without bringing it back to America could still be cheaper than buying the drug here.


RE: Airplane Ticket
By Flunk on 4/4/2014 12:35:24 PM , Rating: 2
Much


RE: Airplane Ticket
By Jeffk464 on 4/8/2014 4:49:57 PM , Rating: 2
It's actually illegal for Americans to engaged in so-called "drug reimportation" by purchasing prescription drugs at cheaper rates in Canada.

Its the obligation of citizens to circumvent laws brought about by corruption. So fly to Egypt and stay for how long it takes to go through the full round of the medication.


Points to a bigger problem with IP law I think
By Solandri on 4/3/2014 6:22:25 PM , Rating: 2
quote:
To Gilead, it's doing nothing wrong asking so much. It reminds its critics of the $11B USD it paid for Sofosbuvir and the literally billions spent on clinical trials to win FDA approval.

It's not just money they spent making this drug combo work, you also have to factor in money they (and others) spent developing drugs which didn't work.

Still, I think this points to a glaring flaw in current IP laws. Putting aside for now the argument about whether IP should even exist and how long it should protect for, another problem is that the charged price does not scale with number of units sold.

With a regular product, if you have a popular product which sells more, you can reduce its manufacturing costs via economies of scale, as well as amortize its development costs over more units. Competitors will come up with similar products, and you're forced to cut your product's price to remain competitive. As a result, a VCR cost $1000 when they were first introduced. Around the time they became popular their price had dropped to about $100-$200. And by the time they were replaced by DVD players their price was $20.

You don't see this in industries with IP protection. A CD costs $20, has always cost $20, and always will cost $20 (adjusted for inflation). The IP-holder effectively has a monopoly on his particular product, so there is no competitive pressure to reduce prices even as sales increase.

I'm not sure how to fix this. Maybe some stipulation which goes along with copyrights and patents saying that your price per unit must be reduced based on the number of units sold. So for example if a band initially sells a CD for $20, when it hits 100,000 sales they must cut its price in half to $10. When it hits 1 million sales, they must cut it in half again to $5. $2.50 at 10 million, and $1.25 at 100 million. If the band originally tries to charge $100 for the CD to counteract the reduction in price that comes from success, then they risk the CD never becoming popular because nobody will buy it. Maybe smooth it out some more so you don't get the public holding off their purchase until it hits 1 million so they can save $5.




By esteinbr on 4/3/2014 6:44:50 PM , Rating: 2
I'm really not sure how to handle situations like this where the development costs are so out of line with the production costs.

I understand that developing a new drug like this cost billions. Not just the 11B it spend buying one of the three components but the money spend developing the other two, identifying the right combination and then going through all the phases of testing to ensure that it works and is safe. Even then it's not just this one drug because they have dozens or hundreds of failures for each one drug that ends up being profitable. A company can not do this type of investment with out some sort of protection for the result. Otherwise some company would copy their drug and make a generic and for much lower development cost and drive pricing down to the level where the original company could never turn a profit on any of their drugs.

That still doesn't prevent me from cringing when they talk about ~100k for 3 months of pills to cure this chronic disease.


By FishTankX on 4/4/2014 10:25:01 AM , Rating: 2
windows development costs are high and production costs are pretty much nothing. we pay it because we have to. same for almost all software. it's just harder to pirate drugs.


By artemicion on 4/3/2014 6:47:01 PM , Rating: 2
Um, no, all of the "regular products" you've described have IP protection, or components that have IP protection. While IP in the US may have flaws, you have not described one of them.


These guys are awesome and deserve to be rewarded
By hubb1e on 4/3/2014 7:30:11 PM , Rating: 1
These guys have developed one of most innovative and effective drugs on the market. It is CURE for the disease rather than a treatment for symptoms. The same idiots who complain that drug companies are distinctiveness to develop cures because you lose your customers, are now protesting this drug. The lack of common sense of the average person is just as astonishing as the effectiveness of this drug.

It was hugely expensive to develop and was an immense risk because there was a large chance that it could never pay off. Without the intellectual property laws in this country and in other developed countries, there is absolutely no chance that this drug would have ever been developed because the would be no reward for sinking Billions of investor dollars into development.

When I saw those numbers, I immediately thought of the airline industry. It costs $10 Billion dollars to develop a new passenger airplane. The potential market for the plane is in the hundreds of billions. And yet when you develop a plane you can at least rest assured that it will fly when done. This drug could not have passed approval and all that money could have been wasted. Think about that and then think about how awesome it is that they are basically giving it away to third world countries to eradicate the disease.

People are thinking about this completely wrong. They just developed an amazing drug, improving society in a way that can never truly be measured. More drugs for different diseases will likely come from this particular method. And yet you're freaking out about the cost of CURING a disease? I am ashamed but not surprised that people are this short sighted.

Those guys are awesome and deserve the reward. I hope they enjoy their campaign on their private jet to their private island because they earned it. And the price will come down as they recoup the development costs for the drug and copycats develop similar drugs from their technique.




By 91TTZ on 4/3/2014 8:08:35 PM , Rating: 3
No.

This is a scam and the American taxpayer is getting ripped off. Not the taxpayer with Hep C, but the taxpayer without Hep C.

Here's the scam: charge a rate that no person can afford. That cost gets paid by health insurance, which in the US is mandatory now. That cost gets passed onto other taxpayers who don't even have Hep C.

So the only way they're making this profit is because they're scamming the US health system and that cost is being passed onto taxpayers. I say make the drug optional- if you get Hep C it's your problem. You come up with the $80k. I don't want my health insurance costs to skyrocket just because someone who lived a risky lifestyle is passing their exorbitant medical bills onto me.


By M'n'M on 4/3/2014 9:17:50 PM , Rating: 2
quote:
I don't want my health insurance costs to skyrocket just because someone who lived a risky lifestyle is passing their exorbitant medical bills onto me.

Alas this is what happens when medicine (or anything else) is declared a right and is "socialized". Poor people in Egypt (and prison) can't pay for their cure. People w/huge $$s can. All I ever hear is how the rich don't pay their fair share. Well here it is, time to be "fair" ... pay up !

ps - what's the scam ? Unless you think the overall profits to be made are some outrageous amount more than the costs (given the risk factor), I don't see a scam. I see "socialism" doing what it does ... passing costs onto those who can pay regardless of the morality of doing so.


By FITCamaro on 4/4/2014 12:06:13 PM , Rating: 2
quote:
if you get Hep C it's your problem. You come up with the $80k. I don't want my health insurance costs to skyrocket just because someone who lived a risky lifestyle is passing their exorbitant medical bills onto me.


This is how it should be for any disease you contract as a result of your own poor decisions. Yes there are cases where people get Hep C through no fault of their own. But those are vast minority of cases.

The rest of us shouldn't have our rates go up because you decided to shoot up or sleep around, and now want everyone else to pay for it.


Foster City gougers
By CalaverasGrande on 4/3/2014 7:15:48 PM , Rating: 4
I've worked at Gilead as a contractor several times. This type of gouging is no surprise. The company occupies an entire section of the Foster City office park.(quite pricey digs, like a corporate Venice with water canals everywhere) The employees are VERY well paid. And the perks and bonuses are off the charts.
It has been said that bioscience is the next 'dotcom'. Having worked in both types of businesses I can see that is true.
Entitled employees and corporate officers that overvalue their own and their company's worth.
Sadly in this case we are not talking about vanity products or social media platforms, but life saving drugs.




RE: Foster City gougers
By Dorkyman on 4/3/14, Rating: 0
RE: Foster City gougers
By bupkus on 4/4/2014 11:55:29 AM , Rating: 2
May I suggest they set their price at $1,000,000 for a 90 day course for American patients?


By AOM on 4/3/2014 9:03:36 PM , Rating: 2
The costs of medicine are rising, and this affects us all. Most people don’t think about medicine until they are sick. Not enough people are talking about this problem. They can’t imagine an alternative to the current system or how they might support change. And this is not helped by the scant coverage of this issue in mainstream media. It doesn’t have to be this way. There are individuals and organizations working on ways to make medicines more affordable including patent pools, biobanks, open labs, nonprofit pharma companies, R&D prize funds, and global treaties.

We need you to add your voice by signing the declaration at www.accessourmedicine.com (http://bit.ly/1dI2Zln)




By M'n'M on 4/3/2014 9:42:57 PM , Rating: 2
Tell me how your petition aims to reduce the 11+B$ spent to bring this drug to market. Otherwise it sounds like more of the problem ... except in this case you don't like paying your $$s so that less fortunate people (than the typical American) can afford the cure.


By Noonecares on 4/4/2014 12:15:41 AM , Rating: 2
I would like to introduce you to prevention and education. But then again that would be the smart choice. Considering its cheaper to buy junk food than fresh fruits and vegetables. But its all about keeping the cycle going. Those that can't afford the better food choices will get sick more often and most likely be overweight. Remember that McDonald's is healthy because athletes say so.


Impressive
By JebSpringfield on 4/4/2014 9:53:15 AM , Rating: 2
How fd up is a world where you go to prison if caught buying medication to save your life just because it comes from another country? Money comes above everything. Dammnnnn.




RE: Impressive
By Piiman on 4/5/2014 1:40:17 PM , Rating: 3
How fd up is a world where you go to prison if caught buying medication to save your life just because it comes from another country? - See more at: http://www.dailytech.com/article.aspx?newsid=34653...

And then you get the drug for free because you're in prison!
Yep somethings wrong here.


Sensationalism
By ammaross on 4/4/2014 3:26:19 PM , Rating: 3
quote:
But even with the complex Ledipasvir, it likely costs under $10 USD to produce a week's dose. In that regard the U.S.'s "discount" may be going from a hundred-fold markup to a roughly ten-fold markup -- still enough to anger many.

Actually, at $1000 for a >>>DAILY<<< pill, a week's dose is $8000, not the "hundred fold" and "ten-fold" poor math the author is doing for his $8000 -> $10 guess. You're talking 800-fold and 80-fold not 100 and 10. You missed a great opportunity to round up and say ONE THOUSAND FOLD and ONE HUNDRED FOLD markups. :P




RE: Sensationalism
By TemjinGold on 4/4/2014 6:14:16 PM , Rating: 2
So there's 8 days in a week then? Please, do enlighten us more on this math...


That's why you don't profit off people's health
By DukeN on 4/4/2014 10:43:38 AM , Rating: 2
Because you will create scenarios where people have to directly choose between money/freedom and health.

Fuck all of you that opposed a single payer system/public option.




By nshoe on 4/4/2014 3:59:26 PM , Rating: 2
Because it is so much better when it is the government deciding between paying for your treatment and your death.

That is the only change you would have in a "single payer" system.


By HammerStrike on 4/5/2014 11:22:37 AM , Rating: 4
One of the big items in pricing this was alternative treatments that currently exist. For Hep C, that is usually a liver transplant, which can cost $250K+, and is funded by the tax payer already. Say what you want, but one way of looking at this is a new therapy that costs 1/4 of the previous option, vs just the list price alone. Not to mention livers are in short supply, while enough meds can be made to treat everyone.

Also, they will only have 20-25 years of total patent protection, after which this will go generic, and that includes what time has already expired while in clinical trials. The system may not be perfect, but, if the drug is as effective as claimed, in the not to distant future we will have basically provided an option for the majority of the human population to self fund a 100% effective cure for Hep C. That's pretty impressive.




"Miracle Drug"
By 2bdetermine on 4/3/2014 10:35:55 PM , Rating: 1
How can it be a miracle drug when few can't afford it and end up dying.




RE: "Miracle Drug"
By Noonecares on 4/4/2014 12:29:29 AM , Rating: 2
I now point you towards Magic Johnson. I rest my case.


By 195 on 4/4/2014 11:55:16 AM , Rating: 3
My buddy has had Hep C for 25 years (got it from drug use in his teens). They selected him for the trial and the side effects were horrible (he spent many hours in the fetal position near the toilet, mild seizures, significant weight loss, occasional oxygen sessions, etc). But after the final round of treatment, the virus was no longer detected in his body. He's been in for multiple checkups for over a year now with no trace of the virus. He's fully recovered from the side effects (about a 6 month recovery) and he's physically looking better than I've seen him in years.

The fact that people have the ability to pay $80k+ in the country for the cure is why it costs that much. As much as I hate the politics, if I had Hep C, I'd be at the bank right now taking out the loan.




voluntary
By purerice on 4/4/2014 9:38:16 PM , Rating: 2
If I understand this correctly, Gilead has volunteered to pay billions of its own dollars to research and test this drug according to the letter of the law.

Is it not Gilead's choice then to charge what they want to charge?

I have friends working at a competing company pulling in 11 hour days 6-7 days/week, completely sacrificing their personal lives in order to create medicine to safely cure people of diseases. When people insult their sacrifice with snide political remarks about pharmaceutical companies and greed, such as the demonstrators pictured above, it really gets under my skin. If Gilead were to make a profit (stay in business) selling $900 cures, they would have to cure millions more cases of Hep-C than exist in the world. Maybe a fair price would be $5000 for everybody but that wouldn't work, so customers in the US subsidize customers in places such as Egypt.

Again, this medicine was Gilead's voluntary endeavor. If people complain about the pricing, and if they believe that pricing could so easily be so much cheaper, then they should develop their own medicine and sell it for less.

If only it were so easy.




Solution
By cditty on 4/5/2014 4:08:40 PM , Rating: 2
Go to Egypt, purchase supply, come home. It's cheaper.




Price is all relative...
By xfortis on 4/5/2014 5:26:19 PM , Rating: 2

But actually this may be a bargain. Because: It cures the disease. Like it goes away forever. $90k is a lot of money, but that's also not many trips to the hospital. How much does ongoing care cost for Hep-C patients? I have no idea, but I bet it's a lot of money (much more than $90k) over the course of a patient's life. Remember, THAT'S MONEY WE'RE ALREADY PAYING AS TAXPAYERS. This isn't "new" cost, it's a replacement of tremendous ongoing-care costs of Hep-C patients.

Really what they should do is dilute the pill so that it's a 10-year treatment program rather than 90 days. That's just $25 a day folks! Step right up!

The lobbyists are a problem, but so is everyone not comparing the alternatives. These guys in big pharma aren't dummies - I bet they have it priced to be a no-brainer compared to ongoing care, and they win because now insurance companies can't discriminate against people with pre-existing conditions so they have to provide said care. Brilliant business model.




is this for real???
By poohbear on 4/11/2014 1:58:46 AM , Rating: 2
I thought Elysium was just a movie?????




And they said
By Fidget on 4/4/2014 8:40:55 AM , Rating: 1
There's no money in curing diseases!




RE: And they said
By MaulBall789 on 4/4/14, Rating: 0
"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson














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