India, Egypt and Brazil have secured access to Sovaldi, the incredibly effective, but also incredibly expensive hepatitis C treatment, for one percent of its cost in America. The 12-week treatment program that runs U.S. insurance companies $84,000 per cycle, will be just $840 in those nations. Burma, Kenya, Mozambique and Iran will pay slightly more: $900 for the full treatment program, or 1.1 percent of the standard price.
However, American insurance companies, which have bristled at the price being charged by the drug's maker, Gilead Sciences, will continue to pay full freight. In fact, they will essentially be subsidizing the cost for less developed nations where need is greater, but ability to pay is far less.
The majorly reduced price will be especially beneficial to Egypt, which has one of the world’s highest rates of hepatitis C infections. The government has treated more than 350,000 patients at their own expense in the last six years. Wahin Doss, a member of the National Hepatology and Tropical Medicine Institute in Egypt, spearheaded the treatment program, which had a 50% success rate. Doss was instrumental to negotiating the deal with Gilead.
While the company initially wanted a higher rate, they settled at one percent due to the size of the market: “We told them we could compensate price for volume, said Doss. "All companies want to enter Egypt because of the huge market, but we are not letting them in unless they offer good prices. We hope to treat a million patients in Egypt.”
The company’s reduced prices came after the World Health Organization worked with Gilead directly to help spread the drug's usage. So what determines who gets a discount and who doesn't? It's simple. Gilead admits their “global pricing model is based on a country’s ability to pay.”
While the countries that most need and cannot afford the drug were greatly helped, many other nations may not be able to negotiate such as low price. Isabelle Meyer-Andrieux, an advisor at Doctors Without Borders, finds that “a major concern for us is the price for middle-income countries,” such as Ukraine and China. Meyer-Andrieux believes that the wealthier countries, which had a lower rate of hepatitis C infection, will earn Gilead enough to subsidize the reduced price in developing countries: “They don’t have to treat so many patients to reimburse the $11 billion.” Of the 130 million to 185 million people in the world with hepatitis C, about ninety percent of them reside in the world’s poorest nations, as this 2013 article from the journal Science shows.
The World Health Organization hopes that with the price will be further deceased for middle income countries through tiered pricing and generic versions of the medication. So far the tiered pricing has set the British cost to $57,000 for a full treatment, Germany to $66,000 and Canada to $55,000. Though the tiered pricing certainly offers some reduction in cost, many health leaders are left unimpressed by the so-called discounts. “When you're starting from such an exorbitant price in the U.S., the price Gilead will offer middle-income countries like Thailand and Indonesia may seem like a good discount. But it will still be too expensive for many of these countries to scale up treatment”, said Rohit Malpani of Doctors Without Borders.
As for the $1,000 a day American price for the extremely effective (and life-saving) medication, Gilead is holding firm that they “think the price is fair. It’s a one-time cost that is your lifetime cost.” In a letter on March 20, Representative Henry Waxman called for Gilead to explain their United States pricing structure to Congress, as part of an inquiry that remains ongoing.
This article is from the archive of our partner The Wire.