Wednesday, March 18, 2015

The Hepatitis C Drug Problem

    Hepatitis C is a problem that doesn't get enough attention. Well, hepatitis in general. It isn't really the sexiest disease and there isn't that much funding into it. It's also a disease of the poor, mainly in Asia, so there's not much funding for it. To add on to this problem, there's no vaccine for Hepatitis C and the drugs that do exist are extremely expensive. Gilead just last year licensed the new drug Sovaldi (Sofosbovir) and it was blowing up in the pharmaceutical world. It's the most effective Hep C drug yet and functions as a nucleoside analogue. However, it is extremely expensive.

Right now in America, the new costs of Hepatitis C treatments are reaching an average of $27 billion a year which is equivalent to 10% of the US prescription spending. In 2014, these pills were the biggest contributor to the 13 percent increase in total US drug spending, which is the biggest jump in more than a decade.

Why are these pills so expensive? They're priced against liver transplants. I took a comparative cost effectiveness class last quarter with Doug Owens and one group did their project on Sovaldi. They developed a markov model comparing the cost-effectiveness of Sovaldi vs the liver transplant. They found Sovaldi was more cost-effective but just barely. Gilead likely did this exact same CE analysis and threw the highest price on it possible while making it still more cost-effective than a liver transplant.

Other companies need to join the market so that there is competition to drive the prices down. Hopefully Chinese and Indian companies will start making rip-offs of the drug at cheaper prices too.

- Jimmy

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