Getting people the drugs they need
A proposed plan to provide universal treatment for hepatitis C, the nation's #1 killer among bloodborne pathogens, could become a model for reversing the damage done by high drug prices.
When drug prices are too high, people suffer.
Over the past decade, there has been no better example of the havoc caused by high drug prices than the nation’s failure to eradicate hepatitis C, a curable infection that takes the lives of an estimated 15,000 people a year, more than HIV/AIDS.
A government-funded scientist discovered a cure for hepatitis C well over two decades ago. Raymond Schinazi, who conducted his research at Emory University, then started a company to develop the drug. In 2011, after a decade of pre-clinical and early clinical trials that received generous government support, Gilead Sciences purchased the firm for $11 billion.
Within two years and paying for the final clinical trials, which the government also helped finance, Gilead won approval for Sovaldi from the Food and Drug Administration. The final trials showed it cleared the infection in over 95% of patients — a medical miracle.
It was also a miracle on Wall Street. Gilead priced Sovaldi at $1,000 a pill, or $84,000 for the 12-week course of treatment. Gilead recouped almost its entire investment during the drug’s first full year on the market. Over its first three years Sovaldi generated $44 billion in worldwide sales, making Gilead at the time one of the most profitable drug companies in the world.
For patients that could afford it (or, more precisely, whose insurers were willing to pay for all or most of it), it was a godsend. People with untreated hepatitis C can wind up with severe liver disease, whose debilitating symptoms (jaundice, mental disorientation, severe itching, joint pain, gastrointestinal distress) eventually lead to cirrhosis, liver cancer and, without a transplant, which is hard to come by and very expensive, death. Gilead claimed the savings to the health care system (less chronic liver disease, less cirrhosis and cancer, fewer transplants) justified the exorbitant price it demanded for Sovaldi.
Yet the savings for the health care system never materialized. After burning through the well-insured population, Gilead’s sales of hepatitis C drugs began to dwindle, falling from $9.1 billion in 2018 to $3.6 billion the following year. Last year, it fell to just $1.8 billion and fell again in the first nine months of this year. As it noted in its 2019 annual report to the Securities and Exchange Commission, falling sales were not just due to lower prices, forced by worldwide outrage over its original price and the arrival of a me-too competitor from AbbVie, but by “fewer patient starts.”
The need was there. But those who needed the drugs either couldn’t afford them or their insurers wouldn’t pay for them.
As a result, over 2.7 million Americans remain infected with hepatitis C, three-fourths of whom do not even know they carry the virus. There are 17,000 new cases reported each year. And the annual death toll — around 18,000 in 2013 — has only dropped by 16% since Sovaldi won FDA approval.
Why? Because Solvaldi’s follow-on combination pills Epclusa (sold by Gilead) and Mavyret (sold by AbbVie) are still priced at $20,000 or more for a course of treatment. They are the only pills on the market that eradicate all six variants of the hepatitis C virus (Sovaldi on its own was less effective). Millions of people can’t afford that because most people newly infected with hepatitis C (it is spread like all bloodborne pathogens through unprotected sex, unsafe drug injection and tattoo needles, tainted blood transfusions and the like) are on Medicaid, in prison, or are uninsured.
Millions of baby boomers are also at risk if they contracted the virus decades ago but avoided chronic complications by living a relatively healthy lifestyle after their youthful indiscretions. As their immune systems age, they, too, could suffer complications from an infection their bodies can no longer control.
Like people on Medicaid or in prison, they will also face financial difficulties accessing treatment. According to the website GoodRx, most Medicare drug plans do not cover hepatitis C drugs. If they do, the plans carry co-pays that range as high as $14,000 per treatment.
The Biden administration earlier this year offered a bold plan to address all these shortcomings in the budget it sent to Congress. He appointed a task force headed by former National Institutes of Health director Francis Collins to promote the plan in public and on Capitol Hill, where it is drawing some bipartisan support largely because of Sen. Bill Cassidy, a Republican from Louisiana who is also physician who specializes in liver disease.
His state pioneered the first version of the plan, which was launched in 2019 with the help of Peter Bach, a former chair of the Medicare committee that approves payment for new treatments who was then at the Memorial Sloan Kettering Cancer Center. Rejecting progressive advocates’ call for the government to seize Gilead’s patents and authorize a cheap generic, Louisiana established a subscription model, or what Bach called a “Netflix” model, for purchasing hepatitis C drugs. In exchange for a fixed annual sum, companies that sell the drugs promised to provide as many courses of treatment as necessary to treat all patients in the state’s Medicaid system, in its prisons or among the uninsured.
As journalist Jon Cohn reported in a comprehensive Huffington Post article earlier this week, the treated population jumped fivefold the first year it was in effect. But many people remained untreated, not because drugs weren’t available, but because they were unaware they were infected. Testing, explaining the test results, and prescribing drugs requires multiple physician visits, which is difficult to achieve among populations with limited access to regular health care.
The Biden plan calls for spending $1 billion a year for the next five years to overcome those hurdles and implement the subscription model nationwide. Fortunately, there is now a pinprick blood test that can show immediate results, which means people can be tested and prescribed the drugs with a single visit. The plan, which will pay for the testing and drugs, targets Medicaid patients, prison populations, the uninsured and the Indian Health Service. Federally qualified health clinics serving low-income clientele would play a major role reaching out to those who might be infected but currently suffer few if any symptoms.
Sen. Chris Van Hollen, a Democrat from Maryland, and Cassidy are working on developing legislation that could be attached to the bill that needs to pass to keep the government running. For that to happen, the Congressional Budget Office would have to agree with a study published earlier this year by the National Bureau of Economic Research that estimated a national plan similar to the one used in Louisiana would save the federal government $13 billion over ten years — well over the $5 billion required to get the plan up and running.
It would even be a boon to the drug companies selling drugs, since sales in 2022 dwindled to just $3.3 billion for Gilead and AbbVie combined. Those sales to well-insured patients would not be affected by the plan, so they could easily afford to sell the drugs to the government at generic prices, i.e., the cost of production plus a reasonable profit. “The marginal cost of making these drugs is really low ― it’s very easy to make these drugs, they’re not hard to synthesize,” Collins, the head of the president’s task force, told Cohn. “They also can see they’re not making money on the marginalized populations.”
Collins, whose brother died of liver cancer due to a long-term hepatitis C infection, has become a forceful advocate for the Biden administration’s plan. “We are squandering one of the most important medical advances of the 21st century,” the former NIH director wrote in a New York Times op-ed earlier this week. “It’s time to eliminate this threat to the health of Americans.” He’s been featured on the PBS News Hour and in numerous other media outlets since the president’s plan was announced last February.
Better late than never. During the dozen years he headed the agency — years that encompassed Sovaldi’s development, its FDA approval, and the early years when more than ten times the amount of money he’s seeking now was spent on that drug — the government took no action to counter its outrageous price.
Now that he’s sold on an alternative way of paying for drugs, perhaps he, as well as others in the administration, will see the wisdom of expanding the subscription model to other drugs and medical treatments that are priced beyond most Americans’ ability to pay. No drug can deliver on its medical value — even “one of the most important medical advances of the 21st century,” to use Collins’ words — if people and payers can’t pay for it.
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