Another perspective on Sovaldi: Spend more now, save much more later
Sovaldi (sofobuvir) is the talk of the biopharma town in 2014 -- not only because of its revolutionary, disease-modifying impact on hepatitis C virus (HCV), but also because of its steep price tag of $84,000 for a 12-week regimen (or $1,000 per pill).
Everyone from patient advocates, to insurance companies and pharmacy benefit managers, to members of Congress are complaining loudly about the cost of Sovaldi and essentially trying to force Gilead to cut the price of this breakthrough oral therapy. The bipartisan congressional duo of Sens. Ron Wyden (D-OR) and Chuck Grassley (R-IA) have initiated an all-out investigation of how Gilead priced Sovaldi. Pharmacy benefits manager Express Scripts estimates that if every eligible Medicaid patient or prisoner were to take Sovaldi, it would end up costing states a total of $55 billion.
Earlier this month, BioPharma Dive took an in-depth look at the pricing controversy surrounding Sovaldi. The main challenge that was explored was the size of the treatment population, which is more than three million people in the US alone. As noted in that piece, if all eligible patients in the US were treated at the retail price, overall costs would exceed $300 billion.
Another way to approach the math
However, according to an article written by Margot Sanger-Katz and published in the New York Times on Sunday, the cost of treating HCV with Sovaldi will not remain constant year after year. Sanger-Katz asserts that there will come a point where demand for Sovaldi will even out, and at that point the drug can be sustainably funded by various payers. In her article, Sanger-Katz explores the idea of pent-up demand. Based on her analysis of various data, many HCV-infected patients will seek treatment early on, with demand peaking two years post-launch. Over time, demand will decrease as patients who are “cured” can no longer pass the virus to others.
Whereas previous feature-length analyses of Sovaldi focused on the sheer size of the treatment population as a factor that could make it financially impossible to keep up with the demand, Sanger Katz’s analysis considers the idea that early therapy with Sovaldi—while being extraordinarily expensive—could offset downstream costs.
For example, the Centers for Disease Control and Prevention (CDC) estimates that 60% of HCV-infected people will end up with chronic liver disease. Because HCV slowly destroys the liver, the real treatment costs pop up later. Long-term consequences of HCV infection include, first and foremost, ongoing liver damage, as well as joint pain, kidney disease, cirrhosis, and liver cancer. Some patients are fortunate enough to receive liver transplants -- which cost about $600,000.
Remembering life before Sovaldi
Before Sovaldi, the most common treatment options for HCV-infected patients were combined interferon-based regimens with protease inhibitors. These regimens were not just expensive, but particularly hard on patients. They included serious side effects, such as fever, depression, and anemia. In fact, the side effects were so serious that the adherence rate for the treatments barely reached 50%. By contrast, Sovaldi cures 90% of adherent HCV-infected patients and has the advantage of being an easy-to-take pill that has very few intolerable externalities.
There are several encouraging factors that will shift Sovaldi’s long-term cost in the coming decades. For instance, there are several competitors coming into the market. Nonetheless, some short-term financing strategies and unusual interventions may be necessary since the US health insurance system tends to work better when costs are spread out.
But over time, demand for Sovaldi will peak and eventually stabilize. Most importantly, there is now a disease-modifying, time-limited, curative treatment option for millions of people with HCV -- and it’s hard to put a price tag on that.