Sunday, October 5, 2014

The Cure for Hep C comes at a Price

Gilead, a US biotech company that discovers and commercializes therapeutics has recently developed a novel therapy, Solvaldi, curing a once incurable disease— Hepatitis C. This disease is caused by infection with the Hepatitis C virus and spread through contact with the blood of infected individuals. More than 130 million people are infected with this virus worldwide and it causes nearly half a million deaths a year.   This life-saving drug comes at a hefty price—between 84,000 and 168,000 USD—underscoring the tension between capitalism and the common good.

Remarkably, Gilead has released Solvaldi for a fraction of the cost to developing nations such as Vietnam, Honduras, and South Africa after making deals with several generic pharma companies across the US. The bottle would be priced at only $300, effectively 1% of the cost to patients in the United States. This new deal would give access to generic Solvaldi to half of the world’s population with Hep C and certainly represents an act of altruism rare among pharmaceutical companies.

However, critics argue that Gilead has not done enough. Even at $300 a bottle, it is still significantly more than the manufacturing costs of the pills alone. Furthermore, this life-saving therapy is out of reach of many impoverished people infected in the United States and middle-income countries such as Brazil and Turkey.

Gilead’s choice to offer different pricing structures depending on the market partly address the primary complaints posed against the pharma industry. The high profit margin of pharma comes from the often-overlooked price of research and development, not only of the specific drug that is successful but all the other drugs in the pipeline that fail. Still the high price is difficult to justify when dealing with health care, because of the desperate need for medical care among patients allows the price of drugs to become exorbitant, but this price simultaneously drives new innovation all the same.

-Will St. Amant

Updated Sep. 15

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