- HCV ‘Miracle’ Cure’s $84,000 Price Tag Causes Significant Controversy
- 2014 Sales of the Drug Register Over $10 Billion
- Competition is Rising, but Prices aren’t Getting Lower
- Hepatitis C Vaccination Seems Elusive
Having been involved in drug discovery and development for many years, I can assure you Gilead’s new drug, Sovaldi™, is truly a drug developer’s dream come true. Solvaldi™ (sofosbuvir) is a drug used to protect against hepatitis C virus (HCV). Compared to other antiviral or anticancer agents, this nucleotide-analog prodrug, pictured below, produces an extraordinarily high cure rate of well over 90% in HCV-infected patients after only a 12-week (84-day) course of treatment that involves simply taking only one pill per day. That’s amazing!
This miracle-like drug, however, comes at a seemingly very high price: a single pill costs $1,000—adding up to a total treatment cost of $84,000 per patient. The estimated cost of manufacturing this pill is only $68-$136, so there’s been quite a bit of media coverage devoted to discussing why the cost to consumers is so high, how this effects drug payment systems, and strong concerns about the viability of treatment in underdeveloped countries where HCV infection is relatively high. This seeming price-gouging is also causing a budget dilemma for whether or not to treat U.S. prisoners who have rampant rates of HCV infection. Before getting to these prickly issues, let’s start at the beginning with the discovery of this “drug developer’s dream-come-true.”
Pharmasset’s Discovery and Gilead’s Acquisition
Pharmasset was founded in 1998 by Profs. Raymond Schinazi and Dennis Liotta at Emory University in Atlanta, Georgia, where its laboratories were set up nearby. Through the sometimes scarily “small world of biotech,” I came to know about this start-up company in the early days because a very good friend of mine (nucleic acids expert, Prof. Wojciech J. Stec) was the company’s Vice President for Chemistry from 2001-2003. In retrospect, Prof. Stec and his team obviously made some great contributions with their R&D programs focused on the development of an oral drug for the treatment of HCV, enabling Pharmasset to go public in 2007.
This viral target was technically challenging because of different HCV genotypes that each have to be combated. On the other hand, there was a compelling medical need since then available FDA approved treatments by interferons or the nucleotide analog, ribavirin, were largely palliative. These treatments fell far short of providing a cure, which is obviously the desired outcome of the ideal drug—certainly from the patient’s point of view.
Pharmasset’s molecular design strategy and synthetic chemistry for an anti-HCV drug candidate eventually led to a very impressive publication in J. Med. Chem. in 2010. The publication was entitled Discovery of a β-d-2′-Deoxy-2′-α-fluoro-2′-β-C-methyluridine Nucleotide Prodrug (PSI-7977) for the Treatment of Hepatitis C Virus, which you should peruse if interested in details. At that time, PSI-7977 was already in Phase 2 clinical trials, and was known to function as a prodrug that undergoes “unmasking” in vivo to ultimately generate the triphosphate form of the nucleotide analog. This triphosphate is the active drug moiety by virtue of its interference with HCV RNA replication required during the life cycle of this virus depicted below.
Concurrently, an R&D team in Foster City, California—about 2,100 miles from Atlanta—was also busily engaged in the pursuit of nucleotide analog prodrugs having structures and mechanism of action quite similar to PSI-7977. That team was from Gilead, a relatively new Big Pharma company that was already profiting handsomely from its very successful anti-HIV drug, Viread®. They too reported in J. Med. Chem. a seemingly equally promising report entitled Discovery of the First C-Nucleoside HCV Polymerase Inhibitor (GS-6620) with Demonstrated Antiviral Response in HCV Infected Patients.
In 2011, just one year after Pharmasset’s aforementioned publication, Gilead stunned the drug development world by announcing its intention to acquire PSI-7977 from Pharmasset for a whopping $11 billion. This was a huge bet to place on a molecule that had not yet been studied in definitive Phase 3 trials in a significant number of patients. My personal opinion is that potential risks of serious side effects that would sideline the drug were offset by the extraordinary efficacy of PSI-7977 after a very short treatment period compared to long-term drug exposure during existing chronic treatments. In any case, this huge bet evidenced to me even bigger “corporate chutzpah” by Gilead.
More specifically, a Bloomberg Business story referred to Pharmasset’s data on PSI-7977 showing that 40 patients who received the therapy were responsive after only 12 weeks. There were no significant adverse events, and most importantly about half the patients had been followed up to 24 weeks, and they were all cured. Although there were no significant adverse events, the drug was said to be tested in combination with ribavirin in patients with HCV genotypes 2 and 3, while genotype 1 is most common and hardest to treat.
Concerns about higher cure rate and genotype-related efficacy have been subsequently swept away by a continuous string of impressive FDA approvals, and the narrative has quickly switched to cost of treatment.
Hepatitis C can be cured globally, but at what cost?
This is the rhetorical and quite knotty question raised by Hill & Cooke in a July 2014 article with the same title published in venerable Science magazine. It has been followed by many other articles expressing collective concern about how the world—literally—deals with the cost of Sovaldi™ for the globally staggering number of patients infected with HCV.
These authors state that worldwide, an estimated 185 million people have been infected with HCV, and that untreated, this can lead to cirrhosis, liver failure, and liver cancer. HCV-related fatalities were said to be as high as 500,000 deaths per year, which represents more deaths than tuberculosis or malaria. Clearly, there is an urgent need to treat this mass of humanity with Sovaldi™, which is now known to cure well over 90% of people with HCV in only 12 weeks. But with the $84,000 cost of treatment, which has raised serious issues in developed (aka “rich”) countries such the U.S., it is impossible to afford in undeveloped (aka “poor”) countries. This “who-can-pay-that-much” dilemma also involves the “why-pay-so-much” question given that Sovaldi™’s estimated manufacturing cost is said by Hill & Cooke to be in the range of only $68-136!
In it’s first full year of sales, Sovaldi™ rocketed to the second highest selling drug of 2014, according to a recent report in GEN. Questions about this high price tag, wider access to this miraculous—in my opinion—drug, and cheaper alternatives continue to swirl around. Gilead argues their drug is not just a treatment for hepatitis C but an actual cure, and the high price tag is worth it, especially when compared to the potential costs of treating liver failure. These cost accounting calculations and comparisons of treatments are far too complex for dredging through here, but I do appreciate the point being made by Gilead, as well as the fact that it’s a for-profit company that has to factor in all of its expenses in bringing Sovaldi™ to market, including the acquisition of Pharmasset, and Gilead’s expenses for failed in-house anti-HCV R&D.
Gilead’s Approach to Treatment Access in Developing Countries
Regarding access by relatively “poor” countries, following is Gilead’s stated position, and then my synopsis of what the company has done in the case of India, by way of example.
“Gilead makes it a priority to increase access to its medicines for people who can benefit from them, regardless of where they live or their economic means. In developing countries, Gilead’s treatment access strategies include tiered pricing, voluntary generic licensing (often in advance of U.S./EU regulatory approval), negotiation with national governments, regional business partnerships, product registration, medical education and partnerships with non-profit organizations. This approach has been successfully applied to Gilead’s humanitarian program in HIV over the past ten years, with six million patients now receiving Gilead-based HIV medicines in developing countries.”
In Sept 2014, Gilead demonstrated its corporate largess by executing non-exclusive licensing agreements with seven generic drug manufacturers located in India to produce sofosbuvir for distribution in 91 developing countries. Importantly, these countries reportedly account for more than 100 million persons infected with HCV, or 54% of all such persons worldwide.
To me, there are three genuinely laudable features of these licensing agreements: (1.) Gilead will provide complete documentation for manufacturing to enable the Indian companies to produce sofosbuvir at-scale as soon as possible; (2.) licensees set their own prices for the drug and pay Gilead only a royalty on sales to cover ongoing sofosbuvir-related expenses; and (3.) there are no restrictions on use of sofosbuvir in various combination therapies.
Competition and Discounting by Abbvie
Not surprisingly, many other companies have new HCV treatments in clinical development, among which Abbvie—spun-out of Abbott Laboratories in 2011—has won recent FDA approval for Viekira Pak™ (a so-called “cocktail” of three drugs) to treat HCV genotype 1. It’s also not surprising that Abbvie has priced this drug at $83,319, essentially the same price as Sovaldi™. However, to compete with Gilead, Abbvie negotiated a discount with Express Scripts—the largest U.S. pharmacy benefit manager. According to a press release, details of the discount are unavailable but are believed to be in the range of Sovaldi™ prices in Western European countries: $51,373 in France and $66,000 in Germany—don’t ask me the rationale for those lower prices vs. $84,000 in the U.S.
Hepatitis C: The Next 25 Years
That’s the intriguing, future-looking title of a recent article in Antiviral Res. by Michael Houghton. I had the pleasure of working with Michael years ago during a collaboration between Lynx Therapeutics and Chiron to investigate an antisense oligonucleotide for inhibiting HCV—a virus that Michael’s lab discovered at Chiron after nearly 6 years of intensive investigations between 1982 and 1988. For discovery of HCV, Michael was awarded the Lasker Award in 2000—awardees of which frequently go on to a Nobel Prize.
Rather than doing an injustice to Michael’s sage wisdom by poorly paraphrasing, following is the verbatim Abstract of his aforementioned published opinion:
Excellent progress has been made in the field of hepatitis C since the discovery of the causative virus in 1989. Screening tests have been produced to protect the blood supply, along with diagnostics to aid therapeutic management, as well as the recent approval of highly effective small-molecule drugs targeting the viral life cycle, which, given in combination, can now cure the vast majority of patients. Future urgent priorities include facilitating the accessibility of these drugs to all of the world’s estimated 170 million carriers before liver cancer and other end-stage liver diseases occur, as well as producing a vaccine to protect individuals at high risk of infection, such as intravenous drug users. Effective control of this viral infection is now clearly in sight.
Inspired by Michael’s urging for a prophylactic vaccine to prevent infection, I went off to research that topic, but came away with the impression that current prospects are not encouraging. This is partly because there already have been numerous investigations, but like HIV, there are currently dim glimmers of hope for a preventative vaccine. This disappointing situation for HCV has been expertly summarized in a recent lengthy publication I found by Verstrepen et al. Aside from running out of new HCV vaccine design strategies to explore, these authors note with alarm that the scientific world has to deal with “the near disappearance of the most relevant animal model for HCV”—the chimpanzee. They say that “public concerns about research with non-human primates, chimpanzees in particular, has eventually led to stop the use of apes for HCV research in Europe, and a significant reduction of the number of animals used in the United States.”
Although it’s not easy, maybe it’s time for society to rethink its priorities.
As always, your comments are welcomed.
After this post was completed, The Wall Street Journal published an interview of Arvind Goyal, a medical director for the state of Illinois, by Ed Silverman entitled How One State Decides Who Gets $84,000 Drug that’s well worth reading. One noteworthy snippet is this Q&A, which revealed the high—to me—proportion of patients who have addiction problems, and the state’s triaging philosophy:
WSJ: Let’s talk about the restrictions. One mentions patients can’t have been abusing drugs or treated for alcohol or illicit drugs for 12 months prior to requesting Sovaldi. But during that time, those folks who go untreated can transmit the virus to others.
Dr. Goyal: Remember that one-third of the population for which we were approving Sovaldi take drugs or alcohol, and nobody ever studied if Sovaldi could be safe or effective for such people. But the disease can be dormant and not show symptoms or signs for up to 30 years after getting in the system. Why is it so bad to tell them they should be sober and take the drug in a dependable fashion? If someone is using a street drug such as heroin I can’t be sure they are compliant taking Sovaldi. It’s a total waste.