March 21 (Bloomberg) -- Gilead Sciences Inc. is being asked by U.S. House Democrats to explain how the company set its $84,000 price for hepatitis C treatment Sovaldi.
The lawmakers also asked Gilead Chief Executive Officer John Martin to explain what is being done to make sure the medicine gets into the hands of low-income patients, especially in government-run health programs.
“Our concern is that a treatment will not cure patients if they cannot afford it,” Democratic representatives Henry Waxman of California, Frank Pallone Jr. of New Jersey, and Diana DeGette of Colorado, wrote in a letter sent yesterday. The lawmakers asked Gilead to brief Congress by April 3.
Gilead’s drug was approved last year as a breakthrough treatment for viral liver infection. The medicine offers higher cure rates and fewer side effects than older treatments, and its high cost has attracted scrutiny and resistance from insurers and public health advocates.
“This letter is a ‘bank shot’ that gets things going, with the goal of getting Gilead to significantly lower the price of Sovaldi,” Terry Haines, a senior political strategist with ISI Group LLC, said in a note to clients. The letter may be a starting point in a campaign to pressure Foster City, California-based Gilead and encourage Republicans and senators of both parties to join the effort, he said.
Gilead declined 4.6 percent to $72.07 at 4 p.m. New York time as the Nasdaq Biotechnology Index of 121 companies fell 4.4 percent.
In the letter, the Democrats asked Gilead to explain how the drug was priced, what discounts are being made available to low-income patients and government health programs, and the potential impact to public health by insurers blocking or delaying access to the medicine because of its cost.
The drugmaker said it will meet with Waxman and the other members of Congress.
“We had heard the concerns raised in the letter and had reached out to a number of members of Congress prior to this letter to address those concerns,” Gilead said in a statement. “We have been working with a number of stakeholders, including federal and state officials, to share the scientific and medical evidence.”
Because the Democrats are in the minority in the House of Representatives, the impact of their effort may be minimal, said Justin Simon, an analyst with Height Securities LLC in Washington. “This is unlikely to affect the price of any currently marketed and priced products,” he said.
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