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U.S. drug industry group defends price of Gilead hepatitis drug

By Susan Heavey

WASHINGTON (Reuters) - The leading U.S. pharmaceutical industry trade group on Thursday defended the cost of Gilead Sciences Inc's new hepatitis C drug, Sovaldi, saying such treatments offer a priceless breakthrough for patients with the liver-destroying virus.

"Their lives, in short, will be transformed," Pharmaceutical Research and Manufacturers of America (PhRMA) President John Castellani said at the group's annual meeting in Washington. "The value to these patients, and to their loved ones and society - you can't put a price tag on it."

Gilead's Sovaldi costs about $84,000 for a 12-week course of treatment, or $1,000 a day.

That has drawn fire from health insurers, including state Medicaid programs, as well as U.S. lawmakers who are investigating Sovaldi's hefty price tag. This week, the World Health Organization joined the chorus of those seeking affordability for such drugs.

While Gilead has said it is working to offer lower prices in dozens of developing countries, critics say such treatments should cost hundreds of dollars, rather than tens of thousands. Another treatment from Johnson & Johnson that some doctors have been combining with Sovaldi as other new medicines advance toward approval, costs about $66,000.

Sovaldi, which was approved by the U.S. Food and Drug Administration late last year, is well on track to post record-breaking sales in its first year on the market.

Analysts with Capital Alpha have said 2014 sales of the drug could reach up to $15 billion, a figure that would top peak sales of Pfizer Inc's cholesterol fighter Lipitor, which had been the world's top-selling medicine before its patent protection lapsed.

As many as 150 million people worldwide, including about 3.2 million in the United States, have hepatitis C, which is caused by contact with contaminated blood, often through shared needles by drug abusers or, prior to routine blood screening, from blood and organ transplants.

Many people can carry the virus for decades before symptoms appear. But if untreated, it can cause serious liver damage and lead to cirrhosis, liver cancer, the need for a liver transplant or death.

"For the first time, 150 million people who are chronically infected with hepatitis C can be treated and cured of this terrible disease," Castellani said.

He said debate over the price of new anti-viral drugs to treat the chronic condition, and the value they bring to patients, has gone "askew," and warned that researching and developing them comes at a high cost to manufacturers.

Defenders of the new medicines point out that older current multi-drug regimens cost at least as much, cure about 75 percent of patients, require 24 or 48 weeks of treatment and have miserable side effects that lead many to delay or discontinue treatment.

The newer medicines being developed by several companies have demonstrated in clinical trials cure rates well in excess of 90 percent with minimal side effects and will require 12 weeks or fewer of treatment.

Those companies, including AbbVie Inc, Merck & Co and Bristol-Myers Squibb Co, are likely to be drawn into the pricing controversy as their new medicines edge closer to approval amid fears that millions of patients will now come forward to seek treatment, causing a massive cost burden to insurers and governments.

Merck and Bristol-Myers presented new hepatitis C data on Thursday at a major liver disease meeting in London [ID:nL2N0N12E2] [ID:nL2N0N12BT]. Gilead, AbbVie and others will also present clinical trial data at the meeting.

"Policy makers ... need to value innovation and stop implying that it comes cheap," Castellani said.

Foster City, California-based Gilead, which paid $11 billion to acquire the company that had the rights to Sovaldi, has said it is working with government officials and others to help create a globally tiered pricing structure.

That plan includes licensing the drug to three or four Indian generic manufacturers to allow sale of the medicine at lower prices in some 60 developing nations.

Separately on Thursday, Indian generic drugmaker Natco Pharma Ltd called on the government to deny Sovaldi a patent in India, a source with knowledge of the matter said, potentially clearing the way to launch a much cheaper version of the drug.

(Additional reporting by Bill Berkrot in New York; editing by Matthew Lewis)

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