posted by Alicia Caramenico
on September 3, 2015
We all want lower prices for hepatitis C medicines, but drugmakers, like Gilead, are gaming for much more. While the New York Times Editorial Board yesterday called for more aggressive negotiations between health plans and drugmakers to bring down the cost of the drugs, the editorial overlooks important facts about what’s happening in the market. Drugmakers continue to use their monopoly power to set ridiculously high prices for new drugs, forcing health plans and employers to start negotiations at a much higher price point than ever before.
Exhibit A — Gilead is charging $84,000 for a 12-week course of Sovaldi, much higher than Pharmasset’s projected $36,000 price. As we’ve said before, that’s quite a price hike for doing little more than buying someone else’s research.
And for its next act, Gilead restricted enrollment in its patient assistance program. By manipulating its patient-assistance program, Gilead avoids paying for its hepatitis C treatments while jeopardizing access for patients who can least afford them.
As drugmakers look for ways to keep pushing prices higher, their already exorbitant hepatitis C treatment prices are crushing state budgets. The high prices are forcing states to make painful trade-offs – cutting funds for mental health or crisis intervention in Missouri or bankrupting education systems in California – to pay for drugs like Solvadi and Harvoni.
Price isn’t the only problem here; the lack of transparency in how drug prices are set also prevents us from finding a sustainable solution that incentivizes innovation and ensures patient access to needed treatments. Until drugmakers are transparent about their actual costs, private sector stakeholders will struggle to control rising drug prices on behalf of patients.