Healey lashes out at biotech firm over ‘unfair’ drug prices
By State House News Service | January 27, 2016, 15:04 EST
BOSTON – Massachusetts Attorney General Maura Healey may go after Gilead Sciences over the price of its new hepatitis C treatment, Sovaldi, calling the $84,000 cost of a full treatment against the deadly disease potentially an illegal unfair trade practice.
Healey referred to pricing for the drug as well as another hepatitis C treatment called Harvoni in speech Wednesday to members of the state’s biotechnology industry, appealing to them for greater transparency in the way prices are set. She also called for making health care accessible to those who need it.
Speaking at the Massachusetts Biotechnology Council’s policy breakfast, Healey said that a balance needs to be set that would let risk-taking pharmaceutical companies “reap their financial rewards” while still getting medications to patients.
“Unfortunately, the costs of treatment means that patients who need the drug the most do not have a means to access the medications,” Healey said. “Now, I’ll tell you that people in this state – and I’ll venture to say across this country – are going to need access to this treatment more than ever because, unfortunately in no small part due to the heroin crisis, the opioid crisis, we have seen hep C rates rise across this state. It’s scary. It’s really scary. It’s rapidly spreading.”
Sovaldi reaches just 3 percent of patients who need it, the attorney general said. Healey sent a letter this week to Gilead, urging its leaders to reconsider their pricing structure for Sovaldi.
“As a threshold matter, my office is considering whether Gilead’s pricing strategy with respect to Sovaldi and Harvoni may constitute an unfair trade practice in violation of Massachusetts law,” Healey wrote in a Jan. 22 letter addressed to John C. Martin, the Foster City, California-based company’s chief executive.
“Because Gilead’s drugs offer a cure for a serious and life-threatening infectious disease, pricing the treatment in a manner that effectively allows HCV to continue spreading through vulnerable populations, as opposed to eradicating the disease altogether, results in massive public harm,” Healey said in the letter. “My civil enforcement attorneys will continue to examine this potential claim for unfair commercial conduct.”
About 200,000 Bay State residents are infected with the disease, and as many as 3.9 million nationwide suffer from it, Healey said in the letter. She said the number of Massachusetts residents from 15- to 29-years-old who have contracted the liver-debilitating disease rose 138 percent from 2002 to 2014. Hepatitis is a blood-borne illness often spread by sharing contaminated hypodermic needles.
While the price of Sovaldi in the U.S. is $1,000 a pill, Gilead sells it for $4 a dose in India and $10 in Egypt. She said the company’s U.S. sales of the two drugs brought in almost $21 billion in less than two years.
Healey told reporters after her speech that Gilead acknowledged receiving the letter and that representatives would be meeting with her office.
“We agree with the Attorney General about the importance of helping all HCV patients – and that the advent of safe, effective regimens means we can now consider the possibility of eradicating the disease,” Gilead spokeswoman Amy Flood said by email Wednesday. “We look forward to working with the Attorney General’s office to address questions and concerns and ensure a mutual understanding of the work we are doing to deliver a cure for HCV to as many patients as possible in Massachusetts and around the world.”
Pharmaceutical spending has been cited as one of the main drivers of health care spending growth in Massachusetts. A recent cost trends report from the Health Policy Commission noted a 13 percent spike in per capita pharmacy spending in the state from 2013 to 2014.
On its website, Gilead says it offers discounts to insurers and free treatment for hepatitis C for “qualified patients.” It also says it uses “a system of flexible, tiered pricing based on a country’s local economic conditions, as well as disease burden.” Also, the company says it has licensed generic manufacturers to supply medicines to 101 “resource-constrained” countries.
“Gilead clearly recognizes the enormous public health benefits and profit associated with making these drugs broadly accessible in other countries,” Healey said in her letter. “I urge you to be part of the solution here in the United States as well.”
Massachusetts Association of Health Plans president Lora Pellegrini said that while the price of Sovaldi has garnered attention, that one drug “really is the tip of the iceberg.” She said some new cholesterol drugs carry “a huge price tag,” and that prices for some generic medications, which have typically remained flat, are also now rising.
“Prescription drug prices are having a very negative impact on our ability to control costs and meet the state’s cost benchmark, so I think the action today by the attorney general is really important and sends a strong message to Gilead and other drug manufacturers that everyone has to participate in cost containment and no one industry gets a blank check,” Pellegrini told the News Service.
MAHP says its commercial member plans spent around $103 million on hepatitis C treatments in 2014 and the first three quarters of 2015, while Medicaid managed care organizations and senior care options spent $139 million.
Healey, in her remarks to the biotechnology council, said that public conversation focuses on “skyrocketing sticker prices” for prescription drugs and more information should be made available about the various factors that go into setting prices.
The discussions, she said, should also involve details on the actual cost of the drug, any negotiated rebates, how prices are set, the cost of bringing the medication to market and what the drug saves consumers in other health care costs, such as avoided emergency room visits.
“Without this type of information, I think it’s hard for consumers, policy makers, insurance companies and others to know whether the costs are too high, too low or just right,” Healey said.
“This is a unique situation when it comes to hepatitis C,” Healey said. “We’ve got an infectious disease, we’ve got a cure, yet rates are rising on the disease, all the while medications, treatment, is sitting on pharmacy shelves. We need to fix this.”
Written by Katie Lannan