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Even At $900 (Vs. $84,000 In US) Hep C Cure Sovaldi's Cost Could Be Unacceptable In India

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The price of Gilead’s new hepatitis C drug, Sovaldi, has been the topic of much debate. Although Sovaldi cures hepatitis C in more than 90% of those who for whom it has been prescribed, the 12 week course of treatment in the U.S. is $84,000, which comes to $1,000 a pill. While curing hepatitis C saves lives and prevents a lot of downstream healthcare costs for patients who, without this drug, could ultimately develop liver cancer or require a liver transplant, payers and politicians are in an uproar for a variety of reasons, not the least of which is that the drug is priced much higher in the U.S. than in the rest of the world. For example, in  Europe, where the government negotiates the price,  Sovaldi’s price tag is on the order of $55,000/patient.

While Gilead’s pricing strategy in the U.S. can be challenged, it has certainly taken a responsible approach to Sovaldi pricing in poorer countries. In Egypt and most recently in India,  the cost of Sovaldi is going to be only $900/patient. Beyond pricing this drug favorably in India, once the clinical trials are concluded in India, Gilead has also agreed to work with Indian generic manufacturers to produce the drug locally and perhaps drive the cost even lower.

But that still might not be good enough for the Indian government.

Indian officials are quick to point out that 80% of their populace are without insurance and that even at $900, the price of Sovaldi is beyond the reach of many. But this won’t necessarily stop hepatitis C patients in India from getting the drug. It is not uncommon for the Indian government to take actions that impact the ability of a foreign company to sell drugs in India that are deemed too expensive. For example, Novartis was never able to get a patent for its cancer drug, Glivec,  in India, thus enabling local manufacturers to make and sell it. Even when patents are granted, the Indian Patents Act allows for compulsory licenses to be issued to local manufacturers for life-saving drugs that are deemed too costly. Even for drugs that have patent coverage and which are allowed on the market, India administers “drug caps” for the prices of hundreds of drugs including those for heart disease and diabetes, despite the fact that the prices for drugs in India are among the lowest in the world.

It’s no wonder that Gilead has tried to be very accommodating with Sovaldi in India. The question is whether the actions it is taking will be enough to prevent compulsory licensing of its hepatitis C treatment. India often boasts of its expanding economy and, in fact, has 10% of its population with wealth equivalent to the average American or European as pointed out by Pfizer CEO Ian Read. Yet, despite the fact that Gilead has been very accommodating and has provided a cost structure that will be envied by the rest of the world, I believe that eventually the price of Sovaldi in India will be far lower than $900/patient.