AHF Supports AHIP’s Labeling of Sovaldi Pricing as “Unsustainable,” Reaffirms Call for Exclusion from Medicaid

  AHF Supports AHIP’s Labeling of Sovaldi Pricing as “Unsustainable,”   Reaffirms Call for Exclusion from Medicaid Formularies   AIDS Healthcare Foundation (AHF) again urges exclusion of pricey Hepatitis C  medication Sovaldi (sofosbuvir) from Medicaid formularies following a May 20   outcry from leading insurance trade group American Health Insurance Plans  which pinpointed the drug – which will cost $84,000 for a 12-week course of  treatment and was purchased by Gilead Sciences from rival company Pharmasett    for $11 billion cash in 2011 – as the primary example of pharmaceutical companies gouging drug prices to unsustainable levels that cause detriment to                    patients and pharmacy benefits managers    Priced at $1,000 per pill, which pharmacy industry sources say suggests a   retail markup of 279,000% over production costs – AHF once again calls on         Medicaid to exclude the pharmaceutical from state formularies  Business Wire  WASHINGTON -- June 12, 2014  In a series of letters to be sent to state Medicaid directors this week, AIDS Healthcare Foundation (AHF) President Michael Weinstein will ask the state directors to block Gilead Sciences’ new $1,000-per-pill Hepatitis C drug Sovaldi (sofosbuvir) from inclusion on their respective state Medicaid and other drug formularies. The drug was approved by the FDA on December 6, 2013, and Gilead immediately announced that it would price the drug at $84,000 for a twelve-week course of treatment – or $1,000 per tablet – making it one of the most expensive drugs ever marketed. Suggested treatment guidelines also require that Sovaldi be used with another drug, ribavirin (a nucleoside inhibitor), further adding to the cost of the prohibitively expensive course of treatment.  AHF first implored Medicaid to leave the costly drug off its formularies in January, after which a multitude of articles were published analyzing the questionable need – and detrimental impact on the public – of the drug’s gouged price. Most notably, leading insurance trade group American Health Insurance Plans pinpointed the pricey Sovaldi – approved for treatment of the Hepatitis C virus last December – as the primary example of pharmaceutical companies gouging drug prices to unsustainable levels that cause detriment to patients and pharmacy benefits managers. The May 20 blog post states: “Sovaldi has shown tremendous results, and it’s the kind of medical innovation we need to sustain. Unfortunately, the drug’s maker – taking advantage of a lack of competition – has priced it at an astronomical level that is not sustainable for consumers, innovation, or society.”  “When is enough, enough? At $1,000 per pill, Sovaldi is priced 1,100% more than Gilead’s most expensive AIDS drug, Stribild, its four-in-one AIDS drug combination, which was priced at $80 per pill a year ago when it came to market,” said Michael Weinstein, President of AIDS Healthcare Foundation. “At that time, Stribild’s price was 35% more than Atripla, the company’s best-selling combination HIV/AIDS treatment, and made Stribild the highest priced first-line combination AIDS therapy. Now, Gilead has set a new benchmark for unbridled greed with its outrageous price for Sovaldi – a price that some pharmacy industry sources suggest represents a retail markup of 279,000% over the cost of actually producing the drug.”  In his letter to state Medicaid directors, Weinstein wrote, “Gilead is charging a higher price for this drug even though the cost to produce it is small. According to industry reports, Gilead produces Sovaldi for approximately $1.00 per gram (with only 10 to 30 grams needed to successfully treat patients with Hepatitis C).^1 This represents a retail markup of over 279,000%. (NOTE: With only 10 to 30 grams of Sovaldi needed for successful treatment, the difference from the $30 production cost for Gilead’s full course of treatment – 30 grams x $1.00 per gram – to$84,000 for the 12-week treatment program represents a retail markup of 279,000%.)  Weinstein’s letter to state Medicaid directors also reminds them that, “Gilead did not pay to research and develop Sovaldi. In 2011, it purchased Pharmasset, the company that had already developed the drug, for $11 billion in cash. The pricing of Sovaldi is being driven by Gilead’s desire to recoup its investment in Pharmasset, and assumes it can accomplish this by charging Medicaid and other taxpayer-funded programs whatever it wants.”  “Gilead is now seeking a bonanza on a financial investment – not on its R&D costs of a drug – by gouging cash-strapped government programs, essentially treating states like its own private – rigged – stock market,” added Weinstein. “With regard to Sovaldi, it’s time we stopped thinking of Gilead as a drug company and recognize them for what they are here: a pharmaceutical hedge fund bent on exploiting government-funded drug programs like Medicaid and ADAP at the expense of the American taxpayer.”  AHF’s reaffirmation letter to State Medicaid Directors on Gilead’s Sovaldi:  Re: Formulary Status of Sovaldi and Forthcoming Hepatitis C Medications  AIDS Healthcare Foundation (AHF) previously wrote to your office (in a letter dated January 26, 2014) requesting that your Medicaid program deny Gilead Sciences’ Sovaldi from being added to your formulary until it is priced affordably. Since that time, additional information has come to light that further undermines Gilead’s pricing of this drug at $1,000 per pill.  Last month, the Center for Evidence-Based Policy released results of a study on Sovaldi, which concluded that, “there is not yet clear evidence that this drug should be used routinely to treat patients.” On May 20, in response to these findings, the National Association of State Medicaid Directors (NAMD) called for “careful consideration of how to responsibly decide how to best use this new treatment option,” and that “[h]owever exciting these new treatments are, the unprecedented nexus of cost and widespread demand threaten to disrupt the health care landscape in the near term.”  AHF strongly supports the position of NAMD. In addition, the findings of the Center for Evidenced-Based Policy is only the latest example that drastic action to obtain a better price for Sovaldi is necessary and will not be putting patient health at risk. As noted in our previous letter, Gilead is charging a higher price for Sovaldi even though the cost to produce it is small. According to industry reports, Gilead produces Sovaldi for approximately $1.00 per gram (with only 10 to 30 grams needed to successfully treat patients with Hepatitis C).^2 This represents a retail markup of over 279,000%.  In addition, Gilead did not pay to research and develop Sovaldi. In 2011, it purchased Pharmasset, the company that had already developed the drug, for $11 billion in cash. The pricing of Sovaldi is being driven by Gilead’s desire to recoup its investment in Pharmasset, and assumes it can accomplish this by charging Medicaid and other taxpayer-funded programs whatever it wants.  Once again, AHF urges you to take action on this matter by denying Sovaldi from your drug formulary until an affordable price is available.  About AIDS Healthcare Foundation  AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to more than 300,000 individuals in 32 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook: www.facebook.com/aidshealth and follow us on Twitter: @aidshealthcare.  ^1 NPR,"$1,000 Pill For Hepatitis C Spurs Debate Over Drug Prices”. December 2013. http://www.npr.org/blogs/health/2013/12/30/256885858/-1-000-pill-for-hepatitis-c-spurs-debate-over-drug-prices  ^2 NPR,"$1,000 Pill For Hepatitis C Spurs Debate Over Drug Prices”. December 2013. http://www.npr.org/blogs/health/2013/12/30/256885858/-1-000-pill-for-hepatitis-c-spurs-debate-over-drug-prices  Contact:  AIDS Healthcare Foundation, Los Angeles Ged Kenslea Communications Director +1-323-791-5526 [mobile] +1-323-308-1833 [work] gedk@aidshealth.org or AIDS Healthcare Foundation, Washington, DC Tim Boyd Director of Domestic Policy +1-213-590-7375 [mobile] timothy.boyd@aidshealth.org