If Washington wants to do something about the public health issues left behind by the opioid abuse epidemic, it might have to start doing something about prescription drug costs.
Sovaldi—one of few medications available to treat hepatitis C—costs $1,000 a pill, or about $84,000 for an entire course of treatment. And while it might be an extreme example, it represents a growing class of specialty drugs that are increasingly driving up health care costs—and an unwillingness in Washington to do much about it.
"When you've got an effective drug that has few or no competitors, its very hard for payers to push back," said Larry Levitt, senior vice president of the Kaiser Family Foundation. "We are alone in the world as a country that relies more on market forces to deal with drug prices than government regulation."
Hepatitis C medication presents an interesting case study of straddling the line between an issue the government is keen to address—opioid use—and one it does not seem to want to touch—the cost of medicine.
And while private insurers pay for the treatment as well, often the bill falls into the lap of the government.
"The way I look at it, hepatitis C is a public-health issue," said Dan Mendelson, CEO of Avalere Health, an independent consulting company. "It's a disease of poverty, it's a disease of addiction, it's a disease that comes along with needle use. That is why the hepatitis C cures are being purchased largely by Medicaid programs. And also many of them are purchased under the exchange policy—so this is government policy one way or another.
"Ultimately, the Congress has to decide whether drug price controls are the right answer. In my view, that would be a mistake," he added.
Cures for hepatitis C on the market include Sovaldi and the newer Harvoni, both made by Gilead Sciences Inc. Two others were approved within the same year, and another was approved last month, according to the FDA. But others are in the pipeline to market and could present price-reducing competition.
"The price of Gilead's hepatitis C treatments reflects the significant clinical, economic, and public health value of these drugs, and is comparable to, or in many cases less than, the cost of older, less effective regimens," the drug maker wrote in a policy position on its website.
An exception to inaction in Washington is an investigation launched by Sens. Ron Wyden and Chuck Grassley last year into the cost of Sovaldi, which is still pending. The senators asked the drugmaker for detailed pricing information.
"Given the impact Sovaldi's cost will have on Medicare, Medicaid, and other federal spending, we need a better understanding of how your company arrived at the price for this drug," the lawmakers said in a statement last July. "In order for a marketplace to function properly, it must be competitive, fair, and transparent. It is unclear how Gilead set the price for Sovaldi. That price appears to be higher than expected given the costs of development and production and the steep discounts offered in other countries. An efficient market needs informed consumers to keep costs down."