Consider this economic reality:
If another company than Gilead comes up with an effect cure they are just going to charge a little less than Gilead. There are books written about this facet of corporate economy. Each new competitor will charge just a little less that the going price, and this keeps the money big for everyone. The second a price battle happens everyone loses.
Examples:
How much cheaper is one cell phone plan over another? eh? Can you even figure them out?
How about Internet providers? They all seem to cost the same. Any slight reduction in fees is met by competition doing the same thing.
IMHO
UnitedHealth Group shocked by Hepatitis C drug costs
excerpts
http://www.stltoday.com/lifestyles/health-med-fit/unitedhealth-group-shocked-by-hepatitis-c-drug-costs/article_e924f2ee-f963-5c5f-a542-513e09e93e0c.htm
UnitedHealth Group spent $100 million on hepatitis C drugs in the first three months of the year, much more than expected, the company said Thursday. The news helped drive down the biggest insurance company’s stock and underscores the challenge for all health care payers in covering Sovaldi, an expensive new pill for hepatitis C.
“We’ve been surprised on the volume — the pent-up demand across all three businesses” — commercial insurance and private Medicare and Medicaid plans, said Daniel Schumacher, chief financial officer of UnitedHealth’s insurance wing. Schumacher and other executives discussed the company’s first-quarter results on a call with financial analysts
But the high cost, and what increasingly looks like high demand, is straining budgets for the government-financed Medicare and Medicaid programs as well as for private insurers that had not priced the drug into this year’s premiums.
That was so fascinating, Jimmy. One of the things that I have been thinking about a great deal is just how fortunate I have been to get sick at the right time. And about history being made here.
I can't tell you how many friends I have who ask - Have you seen Dallas Buyers Club? It sounds like what you are going through
.
Well, not really but I suppose in a way, if Gilead is Ron Woodruff and the insurance companies are the hustler drag queens.
Your take on the Gilead situation still has that poignant drama of who will get the drugs or not and why some and not others
Three of my friends died last year from Hep C. Their family and friends think - if she could have made it just one more year...
BTW Neglected to mention legal rebates to governmental programs and maybe some private insurer plans not connected to government. There are specific situations that apply.
8 % is a number mentioned in some of the fine print of regulations and disclosures that are usually not widely publicised and/or advertised.
My opinions which may or not be supported by respected sources or facts
Regarding Focus on certain GT over others.
1. It's takes three and probably more years from the time a new compound is considered, phase tested and if successful applying for FDA approval. The decisions about which new drugs recently approved or expected to win approval in the next year or two occurred years ago.
2. The prevalence of GT1a & GT1b in the most developed countries who have the deeper pockets was a factor in which GT to focus on.
3. The thought then was GT2 & GT3 were the easiest to treat and had the highest success rate with the PEG/RBV treatment. Within the past couple of years it be came more apparent that GT3 had a lower SVR rate than GT2
4. Since earlier sofosbuvir & RVB /without INF SVR results were very high for GT2 GT3 Previous PEG/RBS near 80% and maybe some disappointing results for some other new drugs. The monetary incentive to focus on GT1 , it's sub types and other kinds of gene related effects on treatment was a major factor.
5. The prevalence of GT 4 and to a less extent GT5 & GT6 in the less developed counties The political implications of ignoring these and some similarities with GT1. Were factors to put some emphasis on new drugs to treat these.
6. Since it's known that GT3 had a lower SVR rate than GT2 especially in some specific circumstances, there has been an recent increasing focus on GT3
7. Other than the few new drugs being developed for GT2 GT3 there will probably be more sometime in the future.
Reasons why Gilead set such a high price in the USA and a relatively high price in some other deep pocket developed countries.
1. We all know Gilead paid 11 Billion for primary sofosbuvir.and the stock holders will demand profitability for that purchase.
2. Gilead knows that it really can't get $84,000 in the US for a 12 week treatment and certainly not for years.. Most all US governmental programs are only paying about 65% of the cost. The co-pay coupons and those that get the drugs free. It's already had to agree to extremely lower prices for some poor countries as low as $900 for 12 weeks. Competition, political pressure and other factors will most likely bring the price down in the US and others within the next year or so if not sooner. Gilead has to cover it's cost and make some profit quickly where it can and while it can.
3. A big factor why the HIV and other drugs have been forced lower or have lower prices is The Global Fund to Fight AIDS, Tuberculosis and Malaria
http://en.wikipedia.org/wiki/The_Global_Fund_to_Fight_AIDS,_Tuberculosis_and_Malaria
GFATM represents about 20% of the the public/private contributions to HIV It's major factor in keeping prices down and least in respect to the super high prices for new HCV drugs which have little public/private contributions compared to HIV.
My predictions
1. Will Gilead make Billions? Yes. Will it cover all cost Yes. Will it make the tens of Billions in profit (more than 30B) some project over the next few years, maybe not.
2. Will the price of Sovaldi move lower in the well developed countries after a year or two. Most likely yes but by how much is still unknown.
klonny55 - That is my read as well (that all the drugs in the near-future in the pipeline are for Genotype 1). I do believe that there is at least one drug combo that is for all genotypes (albeit longer treatment - I think an Abbie drug?)
The main argument is that, because Gilead has come up with a drug that has a better success rate and side effect profile, and because so many people have hepatitis C, they will want to treat. Historically, if folks were doing okay, they opted not to treat (i..e, treatment was not attractive for them - I would have fit in this category).
Additionally, the whole coupon thing that pharmaceutical companies use to reduce coinsurance/co-pay amounts makes their use more attractive (i.e., increases the use of the drug and therefore benefits pharmaceutical companies profit margin and adds burden to insurance companies). This is why insurance companies hate these coupon programs. How many of us would hold off treatment if we had to pay 20 percent of the cost? Can you imagine the screaming?
My health care insurance uses Express Scripts and I am awaiting approval. Lets see how long it takes them. I will be using my Sovaldi coupon.
Also, I have read, the cost of Sovaldi in differing countires is based on affordability/wealth of the country which we all know is held by a small percentage of the population in the U.S. It should be based on the median or mode.
Bottom Line - We have no control.
I'm done with my rant. Have a great Friday folks. Jo
The other thing to consider is that, as far as I can tell, most if not all the other drugs in the pipeline are for genotype 1 only. Genoype 2 and 3 will still need Sovaldi/Ribavirin until Gilead's GS-5816 comes on the market. Phase 3 trials have not even started for this. And even then it will be a Sovaldi/GS-5816 combo.
Doctors welcome hepatitis C drug rivals, Gilead still leads
Friday, April 11, 2014 1:04 a.m. EDT
http://wkzo.com/news/articles/2014/apr/11/doctors-welcome-hepatitis-c-drug-rivals-gilead-still-leads/
Excerpts
Citi Research sees Gilead as the clear market leader, but in the long term expects that Merck will be the second largest player, followed by AbbVie.
"We assume Merck will use aggressive pricing to maximize market share," Citi analyst Yaron Werber said in a research note.
____
Doctors at the London meeting said the value proposition of the new direct-acting antiviral drugs should stack up for governments and insurers, given the potential huge costs down the line from the disease, which can lead to liver cirrohosis and liver transplants.
"Competition will drive the price down, but probably not far enough," said Markus Peck-Radosavljevic, professor of medicine in the Medical University of Vienna and secretary-general of EASL.
The current U.S. price for a 12-week course of treatment with Sovaldi is $84,000, and Gilead has said the price in the United Kingdom is about $57,000.
"We spend at least this sort of money for cancer drugs, which only prolong patients' lives by a few weeks, and often with much worse side effects," said Dr Mark Thurz, professor of hepatology at Imperial College, London.
I know my friend who had breast cancer, her chemo drugs alone were $100,000. It is all crazy, in that context $86,000 is a bargin.
JMHO.....Seeking Alpha writers should be taken with a grain of salt. They are one of the worst financial websites for factual information.
Also, as before with previous Hep C drugs, patients who cannot afford these medications can apply for assistance.
And I am positive that the insurance companies would rather pay $80K for Solvaldi vs $557K+ for a liver transplant.
www.transplantliving.org
www.gilead.com
Here is an interesting article that brings up some good points in the pricing battle over Sovaldi and Express Scripts' motivation to protect their own bottom line. Seems like the battle is over opposing's corporations concern's about profit and NOT patient access. While the big corps battle it out, patients are the real losers here.
http://seekingalpha.com/article/2132933-express-scripts-trying-to-shame-gilead-into-reducing-sovaldi-price-who-is-really-the-greedy-one
Yesterday I received a month supply $ 28,000
Thanks Kaiser!