Newspaper article International New York Times

Gilead Revenue Soaring on Drug for Hepatitis C ; at $1,000 per Pill, Cost of Treatment Is a Flash Point in Debate on Pricing

Newspaper article International New York Times

Gilead Revenue Soaring on Drug for Hepatitis C ; at $1,000 per Pill, Cost of Treatment Is a Flash Point in Debate on Pricing

Article excerpt

Sovaldi, Gilead's hepatitis C drug, costs $1,000 a pill, prompting a public outcry.

Record sales of a new hepatitis C drug pushed the first-quarter earnings of Gilead Sciences far beyond expectations, the company reported on Tuesday, but could also heighten concerns about the high cost of the drug, known as Sovaldi, and the ability of the health care system to pay for it.

The $2.3 billion in sales of Sovaldi appears to have shattered the previous record for sales of a drug in its first full quarter on the market. It appears to have eclipsed already the record for first- year sales, at least in the United States.

About $2.1 billion of the Sovaldi sales were in the United States. The previous record was held by Incivek, a hepatitis C drug from Vertex Pharmaceuticals, with $1.56 billion in United States sales in its first four full quarters on the market, according to EP Vantage, a news analysis service.

Sales of Sovaldi were crucial to Gilead's first-quarter revenue of $5 billion, double that of a year ago. Net income for the quarter was $2.23 billion, well above the $722.2 million of the same period last year.

The rapid uptake of Sovaldi to some degree reflects pent-up demand, as many patients were holding off treatment until it was approved in December. The drug, a pill taken once a day, has a higher cure rate, a shorter duration of treatment and fewer side effects than previous treatments.

But Sovaldi, which has a list price of $1,000 per pill, or $84,000 for a typical course of treatment, has become a flash point in a debate over drug prices.

Paying for Sovaldi for all the patients who need it could put financial strain on insurers, state Medicaid programs, the Department of Veterans Affairs and prison systems. UnitedHealth Group, one of the largest insurers, said last week that its first- quarter earnings had declined in part because it had spent more than $100 million on hepatitis C treatments, including Sovaldi, far more than it expected.

Concerns over public resistance to soaring prices contributed to a decline in Gilead's stock price since the beginning of March, along with those of many other biotechnology companies, though there has been a recent uptick.

Gilead shares rose nearly 2 percent to $72.86 in regular trading Tuesday and climbed further in after-hours trading following the release of the company's results.

Gilead defends the price, saying Sovaldi can save the health system money over all.

"First and foremost, the value of a cure, I tend to think, is underestimated in terms of the overall advantage that the health care system receives from it," John F. Milligan, chief operating officer of Gilead, said on a conference call with analysts Tuesday.

Three million to four million Americans, mostly baby boomers, may have hepatitis C. …

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