Gilead Can Afford to Take These Three Steps to Lower the Price of Sovaldi

Yesterday’s blockbuster earnings announcement from Gilead underscores how much room the drug manufacturer has to lower the price of its Hepatitis C drug Sovaldi.  In fact, nearly all of Gilead’s profits came from its U.S. sales of Sovaldi.

The $3.48 billion that Gilead earned from sales of Sovaldi in the second quarter is only going to increase demands from across the health care system that Gilead lower the price of this $1,000 pill.

With  pressure mounting, National Coalition on Health Care’s President John Rother sent an open letter to Gilead CEO John C. Martin laying out three steps that the company can immediately take.  The letter comes after a meeting in June where Gilead representatives asked for suggestions for actions the drug maker could take to address concerns in the health care community about sustainable drug pricing.  In his letter, Rother wrote:

To that end our coalition has three requests that would help demonstrate your commitment to responsible pricing:

  1. Substantially lower the pricing of Sovaldi.  It is clear that you will easily recoup the investment you made in purchasing and testing Sovaldi.  Substantially lowering the price would be an important good faith gesture to the health care system that you understand your responsibility in ensuring everyone can access and afford this treatment.
  2. Pledge not to increase the price for subsequent versions.  We understand you plan to introduce new versions that could be used without some of the other drugs that now accompany Sovaldi.  Further increasing your price here would be unconscionable and demonstrate contempt for the concerns expressed across the health care stakeholder community.
  3. Commit to greater pricing transparency and advance notice about pricing decisions.  Disclose the calculations that you believe justify pricing.  Also commit to advance warning of launch prices and price increases to help the system better plan for expensive new therapies.

You can read the full letter here, and once Gilead responds, the response will be posted in full as well.