As you probably know, Sovaldi (sofosbuvir) is an important new treatment for Hepatitis C infection that was released this last December and has been aggressively marketed by its maker, Gilead, ever since. The problem is that Gilead is charging an unheard of, jaw-dropping, $1,000.00 per pill for Sovaldi. This translates into a MINIMUM of $84,000.00 for Sovaldi alone for the simplest course of Hep C treatment. Add on the other necessary drugs and take into consideration more complicated cases, and a single course of therapy for Hepatitis C will cost between $100,000.00 and $250,000.00.
This price has placed prison systems in a no-win situation–and not just prisons, but also Medicaid, insurance companies, and HMOs. On one hand, Sovaldi is a good drug that, in fact, represents a significant advance in Hepatitis C treatment. Lots of Hepatitis C patients could potentially benefit from Sovaldi. On the other hand, no one can afford Sovaldi. Treating every potential Hep C patient using Sovaldi would bankrupt everyone. There is no good way out of this dilemma. 
Brief Historical Overview
Hepatitis C, of course, is an RNA virus transmitted almost exclusively via blood exposure. Most of the people who are infected with Hepatitis C today contracted the disease prior to 1992 from a blood transfusion. That is why the CDC issued a call for all “Baby Boomers” to be screened for Hep C, since the majority of unrecognized Hepatitis C cases are Baby Boomers. Since the blood supply was cleaned up in the early 90s, the rate of new cases of Hepatitis C have dropped dramatically. Almost all of the new cases are due to IV drug use and sharing needles. Hep C can also be transmitted inside a prison via prison tattoo needles.
Out of every 100 patients who are infected with Hepatitis C, 75-85 will become chronically infected and 60-70 will develop chronic liver disease. Most of these chronically infected patients will remain asymptomatic. 5-20 will eventually develop cirrhosis (usually after 20-30 years) and 1-5 will die from Hepatitis C, either from liver failure or cancer. The goal of treating Hepatitis C patients is to stop progression of liver damage in those who have it.
The first anti-viral drug used to treat Hepatitis C was interferon but only about 15% of the patients treated with interferon were able to totally clear the virus from their systems—which is called a “sustained virologic response (SVR).” Not very good. It was then found that attaching a Polyethylene Glycol (PEG) molecule to interferon markedly increased interferon’s effectiveness (by interfering with the body’s ability to eliminate the interferon). This is called “Pegylated interferon,” and PEG interferon increased virus elimination to the range of 30% of those treated.
The next advance in Hep C treatment was the development of the oral nucleoside analogue ribavirin. Adding ribavirin to PEG-interferon increased the overall effectiveness of the treatment among all comers to around 50%.
Finally, in 2011, the protease inhibitors telaprevir and boceprevir were released. When one of these agents was added to PEG-interferon and ribavirin (the so-called “three-drug regimen”), even better SVR rates could be obtained in an even shorter amount of time, especially for Genotype One, the most common and hardest to treat sub-type of Hepatitis C. The three-drug regimen improved SVR rates in Genotype One from around 40% to around 55% of those treated. SVR rates in Genotypes two and three are closer to 85-90%.
However, there are significant problems with this triple therapy. First, it is hard for many patients to tolerate, the worst drug in this regard being PEG interferon. Many patients with Hepatitis C just cannot tolerate the vicious side effects of PEG-interferon. Second, it involves a lot of pills and shots, which is termed “the pill burden.” And of course, the more pills you have to remember to take, the more likely you are to forget doses or otherwise be non-compliant. Third, treatment lasts a long time—48 weeks. It is very hard for patients to tolerate the nasty side effects and remember to take all of the pills at the right time for that long. And finally, triple therapy is really expensive. I remember at one conference on Hepatitis C that I attended where this comparison was made: “For every offender treated for Hepatitis C (with triple therapy), that is one correctional officer that you cannot hire that year.”
The potential game changer is Sovaldi (sofosbuvir), which represents a new class of agents termed “polymerase inhibitors.” Sovaldi has a whole bunch of advantages over the old triple therapy.
1. Treatment times using Sovaldi are shorter—in fact, a lot shorter. The basic treatment course for genotype one is only 12 weeks long compared to 48 weeks.
2. Sovaldi regimens seem to result in higher SVR “cure” rates. For Genotype One, Sovaldi may boost the SVR to over 85%.
3. Sovaldi is dosed once a day, markedly cutting down the “pill burden” for Hepatitis C, which should increase compliance.
4. Sovaldi regimens have fewer drug interactions and fewer side effects. In fact, those patients with Genotype One who cannot tolerate PEG interferon can instead combine Sovaldi and ribavirin and another new Hep C drug, the protease inhibitor Olysio (simeprevir). This means that many patients, who were ineligible for Hepatitis C treatment before Sovaldi, could now be treated. Examples include patients with concomitant diseases like HIV, advanced liver disease and hepatocellular cancer. This also means that all of the thousands of Hepatitis C patients who failed PEG interferon therapy due to side effects can now be re-treated interferon-free. I suspect most of them will want this.
5. Finally, the Infectious Disease Society of America (IDSA) and the American Association for the Study of Liver Disease (AASLD) this last January jointly issued new guidelines for the treatment of Hepatitis C that recommend Sovaldi as a first line therapy for all genotypes. They do not recommend using the protease inhibitors telaprevir and boceprevir at all.
The result of all of this is a potential huge demand for Sovaldi. Liver specialists want to treat the thousands of patients who are ineligible for interferon. Patients who have failed interferon therapy want another shot at a cure. Some liver specialists are even advocating for the treatment of all patients with Hepatitis C, even if they are asymptomatic. Advocacy groups are getting into the act and demanding free access to Sovaldi. The CDC recommends that everyone in the United States born between 1945 and 1965 (Baby Boomers) be tested for Hepatitis C infection. Those thousands found to be positive are going to want to be treated. Gilead is advertising heavily and, to judge by a Gilead rep at a conference I recently attended, is using the IDSA/AASLD guidelines to say that Sovaldi is the “standard of care.”
At What Cost?
The problem is the cost. Gilead has chosen to price Sovaldi at $1,000.00 a pill, or $84,000.00 for a 12 week course of therapy. With interferon and ribavirin, the total cost to treat Genotype one is over $110,000.00. Genotype 3 requires 24 weeks of therapy, so double the price. If you go PEG interferon free, add another $80,000.00 for Olysio. And we thought triple therapy was expensive! It is a pittance compared to the cost of Sovaldi.
Let’s do a little hypothetical number crunching for my home state of Idaho. As of a year ago, Idaho had just short of 8,000 offenders in the DOC. Let’s assume that 20% of them are infected with Hepatitis C (a conservative estimate—it might be 30% or more). If we treat all of them with Sovaldi regimens, and, taking into account the various genotypes, treatment could average $130,000.00 per patient. Do the math: 1,600 times $130,000.00 = $208,000,000.00. This number dwarfs the entire Idaho DOC budget! It is simply financially not doable.
But won’t we save money in the long run by reducing the incidence of liver failure and liver transplant? Well, the Institute for Clinical and Economic Review analyzed this question in a paper entitled “The Comparative Clinical Effectiveness and Value of Simeprevir and Sofosbuvir in the Treatment of Chronic Hepatitis C Infection” (not yet published, but accessible here) and concluded that it would cost the state of California around $32 billion to treat half of the state’s Hepatitis C patients. But even optimistically assuming optimal cure rates and no reinfection, only around 5% of that outlay would be recouped through lower expenditures for liver transplant and treating liver failure. They conclude that Sovaldi is of “low value” in treating most Hepatitis C patients and recommend restricting its use to a small subset of patients.
$2,000.00 for Sovaldi in India?
So why is Sovaldi so expensive? Is it that expensive to produce? Well, Gilead reportedly will sell Sovaldi in India for only $2,000 for a full course of treatment and presumably will make a profit there.
According to the AIDS Healthcare Foundation (AHF), this is possible because it costs Gilead only around $1.00 a gram to produce Sovaldi, making the U.S. retail mark-up 279,000%. A Gilead executive defended this shocking price differential thus: “Gilead’s global pricing model is based on a country’s ability to pay.” Unfortunately, he is wrong if the assumption is that US third-party payers like Medicaid, Blue Cross or prison systems can afford widespread prescriptions for Sovaldi. It just cannot happen financially. Besides, that huge of a mark up just seems wrong to me, personally. It seems to be the worst sort of price-gouging.
But even putting the emotional reaction aside, the huge price leaves those of us in corrections with few options. We simply cannot afford to use Sovaldi very much, if at all.
The most obvious strategy is not to use Sovaldi and stick with the older regimens and the older protocols. Another is to authorize Sovaldi only for the sickest of the sick—those with advanced liver disease, for example or those with co-morbid conditions that preclude use of PEG interferon. A variation of this strategy is the one recommended by the Institute for Clinical and Economic Review and has been adopted by many third party payers. State Medicaid programs, like prisons, are still struggling with the issue of whom to treat.
What about the argument that since the IDSA and the AASLD have issued a guideline recommending Sovaldi for almost all Hepatitis C patients, Sovaldi now is “the Standard of Care?”
Well, in my opinion, this is simply not true. “Guidelines” do not a “Standard of Care” make.
First of all, there are many other published Hepatitis C guidelines that do not recommend Sovaldi use. The Institute for Clinical and Economic Review paper itself can be viewed as one such guideline. Several others are listed within that paper itself.
Second, the IDSA/AASLD guideline does not at all address the cost of using the drugs it recommends. When we are talking about the potential of bankruptcy if we follow these guidelines, cost is a critically important consideration.
Third, in their Hepatitis C guideline, IDSA/AASLD admitted that some of the board members had a conflict of interest: “The Panel is composed of members with personal financial relationships with commercial entities and those with no such personal financial relationships with commercial entities at the time that each Panel member was confirmed.”(see page four) I don’t know about you, but when such a huge amount of money is at stake, potential conflicts of interest make me a little leery of accepting these guidelines without reservation, especially when it is not spelled out exactly who in the panel had conflicts of interest and exactly what those conflicts were.
Finally, in my opinion, “Standard of Care” is a legal term, not a medical term. It is loaded with undercurrent implications of “I’ll see you in court if you don’t prescribe this.” I think we are better off throwing out the term “Standard of Care” and evaluating Sovaldi on its medical merits, which includes its outlandish price.
In the end, Sovaldi is a good drug that we cannot afford, except maybe in a very small subset of patients.
As usual, this is my opinion. You are free to disagree. I could be wrong! But if you do disagree, please tell us why, in comments!
Thank you for writing this article, and agree with points that you have made.
Price gouging is not based on the “ability to pay”, but rather the “legal responsibility to pay”. As you pointed out, Gilead set out to write guidelines based on Sovaldi, then promote these guidelines as standard of care, which places the legal/financial burden on the payors to cover this treatment or face a legal battle.
It would be helpful if a consortium of jails/prisons establish a “standard” among this community for the treatment of Hep C (among other things), this would help many institutions treat patients according to “community standard”
Excellent summary of the situation, Hsien! Right now, I am in a “wait-and-see” mode. In particular, I want to see if California can negotiate a lower price for Sovaldi (which they are trying to do), what the other state Medicaid systems decide (most of them do not yet have guidelines and are evaluating case-by-case) and what the federal bureau of prisons decides to do.
I believe California prisons (CDCR) will be approving Sovaldi on their formulary soon, with guideline to follow… If California AB109 population demands the same treatment in local jails this will be quite an impact.
I think on a county or municipal level, where length of stay is very variable based on bail, charges being dropped, etc. one can reasonably defer any initiation of Hepatitis C therapy based on the uncertainty on whether or not the patient will have adequate follow up and access to medication if he/she went out of custody prior to completion of the regimen. Though, I would definitely feel an obligation to continue ongoing therapy for patients already on the regimen when incarcerated.
Also, I think we should not lose sight of a general recommendation that those patients with active substance use disorders should be in stable long term recovery before initiating treatment of Hepatitis C, because the rate of relapse (and subsequent risk of reinfection) in those whom have not first aggressively addressed their substance disorder would certainly be markedly elevated. The addiction disorder is the more immediate potentially lethal of the two illnesses in the scenario of the IV drug user with Hep C, and ideally that is where the patient’s attention should be foremost directed. I recognize that “long term recovery” is a vague term, and that treatment of the two illnesses is not mutually exclusive, but one absolutely needs to focus on an active substance problem as the priority and realistically consider risk of relapse/reinfection in that population before initiating Hep C therapy.
This will sound self serving and am open to criticism, but one could argue that in the IV drug using population, the ability to maintain some reasonable sustained degree of abstinence OUTSIDE of an institutional or correctional environment should be demonstrated before initiating Hep C treatment. Again, not as a punishment or reward, but just as an acknowledgement that risk of relapse/reinfection is significant among those leaving these environments. I see countless patients who genuinely seem to be stable in terms of there substance abuse problems when they are leaving the facility, only to see them return again in active addiction shortly thereafter. Not because they are weak or morally deficient, but rather they (and myself as a physician) tend to underestimate the magnitude/severity of the substance disorder when in a relatively more protected environment of a correctional facility.
Hopefully didn’t divert away from the original topic too much. But an honest consideration of risk of relapse in IV drug users does exclude a significant number of candidates from treatment in a correctional setting and it is somewhere to start when having the discussion of whom to and not to treat in that setting. And I am coming at this topic as someone whom does advocate for fair and respectful treatment of those suffering from addiction disorders.
Let me start by agreeing that the jail setting makes much of this academic – as most offenders will not remain in custody long enough to ‘qualify’ for treatment consideration – nor will most of them ‘qualify’ based upon proper screening for effectiveness.
There are fairly well established pre-approval methods for a variety of expensive procedures. Some of those procedures include a waiting list for access (we have one for dental care).
Although the courts have repeatedly stated that cost is not a valid determinant in any decision process for providing care – they are not accurate.
Health care has always been ‘rationed’ (in any setting) based upon – access, quality, cost. The Hep C dilemma is another iteration of the same basic question.
There are algorithms available that provide a good discernment of which offenders will be appropriate for Hep C treatment. They include a structured ‘work up’ as well.
All that being true – when an offender arrives on your doorstep already being treated – without some marked exceptions – you must continue care.
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I’m a prison doctor working in Edinburgh in Scotland and I am struck by the similarities between the issues explored here and the work that we do in the UK. Many thanks for this wonderful site and I hope to be able to give a “Scottish” perspective in the future.
Thanks for the comment, Kevin! I certainly would be interested in a Scottish perspective, should you ever write something up!
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I find it interesting in your discussion of pricing, you consider the marginal cost of production, but not the R&D costs associated with developing a drug that you admit is revolutionary.
Price discrimination (charging each person what he is willing to pay, or trying to) is pretty standard economics and characterizing it as gouging is an appeal to emotion, in this case divorced from those very important R&D costs.
Some economist, somewhere targeted that price because they calculated that it would cover the R&D costs before the exclusive marketing and manufacturing period expires for the drug.
It’s an expensive and complicated issue that is not as simple as “price gouging” makes it seem to be.
[I say this as someone who has refused treatment with Avastin because I felt it failed the cost/benefit test because of its extreme sticker price.]
Good points, John. I actually did consider R&D costs, but chose not to include that in my article. It is easy to calculate Gilead’s exact R&D costs for Sovaldi, because they did not develop the drug. Gelead bought the company that did the actual research and development of Sovaldi, Pharmasset, in 2011 for 11 Billion dollars. So their “R&D” cost, so to speak, is $11 billion.
That is a lot of money, but Sovaldi generated $2.3 billion in profits for Gilead in the very first quarter of sales (source: http://www.reuters.com/article/2014/04/22/gilead-sciences-idUSL2N0NE1Q420140422). So they will recoup their R&D acquisition cost well within the first year.
Your more important point is that Gilead is just doing what they are supposed to do–generate a profit for their shareholders. I can’t argue with that. The problem is that the price is set so high that it has become a significant impediment to proper medical use of the drug. In other words, sick patients who could benefit from Sovaldi will not get it because they cannot afford it. In fact, patients will die from hepatitis c who could have been saved by Sovaldi, except for the cost.
Sovaldi is not the only example of this, of course, just the most recent and most egregious. It is frustrating for us clinicians who want to do the best by our patients but we can’t because of profit driven price sets.
New Hepatitis C treatments equivalent in efficacy to Sovaldi will be entering the market in the next year or so–but I don’t expect the price for treatment to go down. In fact, the makers of the next agents in the pipeline, AbbVie and Merck, have already said that they will not compete with Gilead in price–meaning their drugs will be priced at least as high.
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The solution is simple; outsource DOC services to a service provider, for example, in India. A nice 3 star Indian hotel would fit the budget. The last I heard is that it is costing American taxpayers about $60k per person/ year to retain custody of these infected persons. Adding $2000 to the budget to cure one from Hep C would be a bargain. Maybe a cruise shop would work as well and rather than die from Hep C related illness they could be cured of Hep C and die happily from overfeeding feeding on the buffets.
Three questions:
1-Interested in how docs are following the Hep C populations in their prisons (LFTs/platelets?) to get an idea of potential fibrosis and when to consider screening for possible treatment.
2-Are folks relying on liver bx to tx or are non-invasive measures acceptable in your settings (fiberscans, fibersure).
3- If you are using blood work/fibersure, what numbers are you utilizing as a cutoff to treat as there is a range which may represent grading overlaps.
Thanks-Mike
Dr. Keller, could you please comment on how you have adjusted your practice with the new guidelines for HCV treatment? Especially with the recommendations that all HCV+ patients be treated, even active drug abusers.
Hi Jennifer,
1. Because of the immense cost of the novel agents for Hepatitis C, it is simply not possible to treat every single person in any prison system simultaneously. So basically, hepC patients should be “staged” into two broad groups: Those who are so sick that they must be treated now, and those who can safely wait to be treated. The ones who can safely wait to be treated should not be told “we are not going to treat you.” Instead, they are told “we will treat you eventually, but you can safely wait to be treated later.”
2. When deciding who to treat now, and who should wait for treatment until later, I think that it is clinically appropriate to consider behavioral factors that could impact treatment success. This certainly would include active drug use.