Bipartisan Senate report denounces high price of Hep C drug

A new bipartisan Senate report is taking a drug company to task for charging $84,000 for a medicine, a move senators hope will spark discussion of drug prices in Congress. 

Sens. Ron Wyden (D-Ore.) and Chuck Grassley (R-Iowa) on Tuesday released their investigation of the pricing decision-making by Gilead Sciences, Inc., maker of the Hepatitis C drug Sovaldi, which had drawn widespread attention for being priced at $84,000 for a 12-week treatment. 

{mosads}“The evidence shows that the company pursued a calculated scheme for pricing and marketing its Hepatitis C drug based on one goal: maximizing revenue regardless of the human consequences,” Wyden said at a press conference. 

Grassley’s involvement comes as some Republicans have shown signs of movement on the drug pricing issue. Some Republicans, like Senate Finance Committee Chairman Orrin Hatch (R-Utah), still staunchly defend the industry, saying it needs high prices to recoup research and development costs. 

On the other hand, Sen. John McCain (R-Ariz.), along with Grassley, recently renewed a call for the administration and Congress to act to allow imports of cheaper drugs from Canada, a move strongly opposed by the pharmaceutical industry.

Sen. Susan Collins (R-Maine) has likewise launched a bipartisan investigation into two companies that have dramatically hiked the price of drugs. 

Asked on Tuesday whether Republicans are starting to change their tune on drug pricing, Grassley said he hopes his investigation promotes “discussion” of the issue. 

“My hope is that the fact that this has been a bipartisan investigation, that this inquiry will be a wake-up call in terms of the challenges ahead,” Wyden added. 

The report finds that Gilead priced its drug based simply on maximizing revenue, not on recouping research and development costs. 

One slide from a company presentation obtained by the senators shows that the company mapped out the “likelihood of public outcry” for different potential prices of the drug. 

One official writes in an email, “Let’s not fold to advocacy pressure in 2014,” adding, ‘‘Let’s hold our position whatever competitors do or whatever the headlines.’’ 

Gilead defended its prices in a statement Tuesday, arguing that its drug is a major improvement in Hepatitis C treatment and saves money down the road by reducing the need to pay for managing the condition long-term. 

“We stand behind the pricing of our therapies because of the benefit they bring to patients and the significant value they represent to payers, providers, and our entire healthcare system by reducing the long-term costs associated with managing chronic HCV,” the company said. 

The company also noted that there are rebates and discounts in place. 

The Senate report acknowledged that competition from other companies has now helped lower the price of the drug, but warned that more high-priced drugs are in the pipeline. In particular, the senators warned of the burden paying for these drugs places on Medicare and Medicaid. 

Grassley indicated openness to paying for drugs based on “value” or how much of an improvement in health they are shown to have. 

The Obama administration is also exploring this idea. The White House held a forum on drug prices last month. 

Grassley noted the administration’s goal of shifting Medicare to pay for quality over quantity and reward value in 50 percent of its payments by 2018. 

“We’ve considered value to some extent [in other healthcare areas], now we’re moving towards it by 2018,” Grassley said. “I’d like to have you consider my use of value in those same terms.”

Grassley said the report was just the beginning of a discussion on policy changes, and added that process might take two to three months. But he said the problem deserves scrutiny.

“The federal government is also a major payer for those drugs,” he said. “We are $18 trillion in debt, so what we spend on Medicare and Medicaid ought to get a lot of attention.”