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Score one for Vox.com! The website’s article earlier this week about the costly hepatitis C drug Sovaldi is one I’ve been waiting for since the drug debuted a year ago with its $84,000 price tag and boosterish press coverage. Vox health policy reporter Sarah Kliff knits together the strands of the drug’s journey from development to clinical success to shock at its high price tag and debate over its use and its impact on the healthcare system. She sums up:
Sovaldi is an instructive study in how the American healthcare system allows drugs to become expensive—an incredible, unprecedented, and $1,000-per-pill type of expensive that the country has never seen before. The story of Sovaldi shows the American healthcare system is incapable of fighting back against these prices.
Kliff does a very good job showing how Sovaldi was born, springing from one of millions of molecules floating around in a pharmaceutical company library to a fully developed drug sold by Gilead Sciences, which, with unchecked chutzpah and America’s sky-is-the-limit pricing model, marketed the drug at a price it thought it could get away with. Judging from the company’s financials, it made the right call. Gilead has joined the ranks of the top-selling drug companies and earned $3.5 billion in sales during the second quarter of this year.
When press stories about Sovaldi first showed up, I urged the media to take a look at how other countries control pharmaceutical prices, and it was good to see Kliff report on how its done in the UK, where the National Institute for Health and Care Excellence evaluates both the cost and clinical effectiveness of new drugs and medical devices. It’s good for readers to understand that other countries have mechanisms, although not perfect, for keeping drugs from busting their national healthcare budgets.
That line of reporting leads Kliff to a discussion of the continuing American debate over high drug prices with no consensus on what, if anything, to do about them. We’ve heard the arguments before. On one side, high prices are justified because they spur innovation and cures—by all accounts, Sovaldi is remarkably effective. But prices can also become so high drugs will be unaffordable. John Rother, who heads the National Coalition on Health, told Kliff, “How do we maintain insurance financing if everyone takes this approach? We end up sinking the ship.”
Kliff correctly notes that private health plans and public insurance programs “are too fragmented to demand lower prices,” reports that federal law prohibits Medicare from negotiating drug prices with pharmaceutical companies, and notes that a few state Medicaid programs have begun limiting Sovaldi to the sickest patients. Coalitions have sprung up to denounce high prices; Congress launched an investigation. “All of these actions were meant to send a signal. It didn’t work,” she reported. One thing the piece didn’t really do is closely examine role of lobbying, big money, and politics in the drug price saga. There’s an opportunity for more reporting there.
What happens if there is no check on high prices—particularly for specialty drugs now in the pipeline, like the forthcoming treatments for high cholesterol Kliff mentions? We’re already beginning to see the shape of an answer. Actuaries have said the price of Sovaldi has helped push insurance premiums higher for 2015. Patients who need some of these specialty drugs are now finding they have to pay 20, 30, 40 percent of the drug out of pocket.
Earlier this year Rother told me, “Four years after we passed what we thought was universal health coverage, you can’t get the medicines you need because of the prices. It’s tragic.” Rationing by price is still with us—yet another dot to connect.
Related content:
The $1,000 pill is popular! So, who pays?
Did the gee-whiz drug story make a comeback?
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