Justifying After the Fact Is Not Justification

A recent study funded by the National Institute on Aging compared Gilead’s Sovaldi to previous Hepatitis C treatments on a cost-benefit basis and concluded that Sovaldi offered value. This study is a perfect example of getting the answer only to the question you ask.

It is true that Sovaldi is more efficacious than previous therapies. However, that is far from the full picture.

What the study should have asked is whether or not the price Gilead set for the therapy is appropriate for all patients–even asymptomatic patients–and whether or not such a large portion of potential societal value should accrue to one company. Other studies, such as one conducted by the highly-respected California Technology Assessment Forum, concluded that Sovaldi does not offer reasonable value to the health care system.

However, the study highlights a bigger problem: the fact that these studies are only offered after a drug is priced and have no bearing on the pricing decision. Gilead’s President, Dr. John Milligan, has made it quite clear that Gilead doesn’t price based on value, but instead by looking at the price of preceding products. What we need is a system where there is a more rigorous up-front economic and social evaluation of expensive new therapies. Without that evaluation, we end up with what we have in Sovaldi and Harvoni–monopolistic pricing where there is an attempt to justify legitimacy after the fact.