God Save America!

How can Gilead Sciences charge $84,000 for a drug that costs less than $300?

America is the land of breakthrough science -- and equally of health care scams. The two seem to go hand in hand in the case of the new hepatitis C virus (HCV) cure named sofosbuvir, sold under the brand name Sovaldi by the drug company Gilead Sciences. There is no question that Solvadi is a godsend- a lifesaver for millions of Americans, and perhaps someday for hundreds of millions of people around the world infected by Hepatitis C. Yet Sovaldi is also the poster child of a U.S. health care system that is being bankrupted by greed, lobbying and indefensible policies on drug pricing.

Here are the basic facts:
In Dec., 2013, the Food and Drug Administration approved Sovaldi, and another formulation, Harvoni, which is sofosbuvir used in combination with another drug. Gilead set the price for a course of 12-week treatment of Sovaldi at $84,000, amounting to $1,000 per pill. Again, Gilead set the price of Harvoni at $94,000.

According to researchers at Liverpool University, the actual production costs of Sovaldi for the 12-week course is in the range $68-$136. Indeed, generic sofosbuvir is currently being marketed by India at $300 per treatment course, after India refused to grant Gilead a patent for the Indian market.

How can Gilead Sciences charge $84,000 for a drug that costs less than $300 to produce? First, Gilead's patent on sofosbuvir runs until 2028, giving it a monopoly in the U.S. market. Second, a range of Federal and state government programs will cover the $84,000 for a sizeable number of patients. For those not covered by government programs, some will be covered by private insurance, a few will pay out of pocket, and still others will likely die because they lack coverage and can't afford the treatment. God Save America!