Sovaldi is a breakthrough drug that can cure 90 percent of chronic Hepatitis C infections, but industry experts and lawmakers are questioning whether it should cost $84,000 per person.

Gilead

Sovaldi, a drug to cure Hepatitis C, made headlines when it was approved in December as a breakthrough in treatment for this chronic and potentially fatal liver disease. This week it is making headlines again, as the manufacturer announced sales of $3.5 billion for the second quarter alone, and many people, including two U.S. Senators, are questioning whether even a miracle cure should have such a high price tag.

Hepatitis C is a contagious liver disease that is spread primarily through contact with another person’s infected blood. Though it can be spread sexually, the risk of this is low. Most often, people become infected with Hepatitis C by sharing needles to inject drugs. The virus can also be transmitted from an infected mother to her child during pregnancy and childbirth. Though some cases of Hepatitis C are acute, meaning they pass quickly, most people who get the virus will have a chronic or continuing infection. Chronic Hepatitis C can lead to long-term health problems, liver failure, and liver cancer. It is the leading cause of cirrhosis and liver cancer and the most common reason for liver transplants in the United States. The Centers for Disease Control and Prevention estimates that there are 3.2 million people in the United States living with Hepatitis C, and about 15,000 people die from it each year.

Sovaldi is definitely a game-changer. Before it was approved, patients relied on drugs that had numerous side effects and a cure rate of about 50 percent. In clinical trials, Sovaldi, which is taken as one pill a day for 12 weeks, had few side effects and cured nine out of ten patients. The problem, however, is that each pill costs $1,000, meaning the entire course of treatment comes at a price of $84,000.

Gilead, the manufacturer of the Sovaldi, is defending its price point by highlighting its cure rate, its research-and-development costs, and the other costly treatments—such as liver transplants—that Hepatitis C patients who take the drug will no longer need. But these arguments are not convincing to many in the health-care world, who say that with estimated 2014 sales of $10 billion, Gilead—which bought the start-up company that invented Sovaldi—will make back its investment many times over; Sovaldi is now one of the highest-selling prescription drugs of all time. Others note that costly treatments like liver transplants were not inevitable even without this new cure, as only about 1 or 2 percent of individuals with Hepatitis C ever get to that point.

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In their letter to the manufacturer, Sens. Ron Wyden (D-OR) and Chuck Grassley (R-IA) note that before Gilead acquired the drug’s developer, the projected price for a 12-week course of treatment was $36,000 ($48,000 less than the current price tag). The letter reads in part, “It is unclear how Gilead set the price for Sovaldi. That price appears to be higher than expected given the cost of development and production and the steep discounts offered in other countries.” The letter asks the company to explain the price and requests that information within the next two months. Gilead has said it will comply with the request.

In the meantime, industry analysts and insurers have weighed in, suggesting that this drug alone could cripple the system by which we pay for health care, ruin all attempts to reign in related costs, and cause insurance premiums to rise for everyone in the United States. One estimate, included in the lawmaker’s letter, suggested that the drug would cost Medicare Part D, the drug benefit program for senior citizens, $6.5 billion in the next year or so, which would lead to an 8 percent increase in premiums. Another estimate, by Express Scripts, the largest pharmacy benefit manager in the nation, set the cost to states at $55 billion to treat all Medicaid patients and prison inmates and called the drug “a tax on all Americans.” Executives at CVS Caremark, the nation’s second largest pharmacy benefit manager, wrote a commentary for the Journal of the American Medical Association, in which they argued that treating Hepatitis C patients would add $200 to $300 to every American’s premiums over the next five years.

The New York Times, however, points out that all of these estimates may be inflated because they assume that all three million individual with Hepatitis C will seek Sovaldi immediately. The Times notes that many of these people don’t know they are infected, and others have no symptoms so would likely not seek a cure right away. Moreover, it points out that the health-care system couldn’t accommodate treatment for everyone right away, so the costs would ultimately be spread out over a number of years.

Gilead also makes the HIV-prevention drug Truvada, and on Wednesday the Food and Drug Administration approved the company’s new drug, Zydelig, which is designed to treat three kinds of blood cancer.