By Peter Loftus
Philadelphia's transit agency has sued Gilead Sciences Inc.,
accusing the company of "price-gouging" on the sale of its
$1,000-per-pill hepatitis C drug Sovaldi, the latest salvo in a
battle between health-care payers and the pharmaceutical industry
over prices.
The Southeastern Pennsylvania Transportation Authority, or
Septa, filed the lawsuit on Tuesday in U.S. District Court for the
Eastern District of Pennsylvania. The suit seeks class-action
status, subject to certification by a judge, on behalf of any
person or entity in the U.S. who has paid "excessive" prices for
Sovaldi, or was unable to obtain the drug.
The lawsuit seeks monetary damages from Gilead.
According to the lawsuit, Septa, which operates trains, buses
and subways in the Philadelphia region, has spent at least $2.4
million on Sovaldi this year for members of the health plans it
funds for employees and retirees. Septa didn't say how many plan
members have received Sovaldi to treat liver-damaging hepatitis C
infections.
A Gilead spokeswoman said Wednesday that the company had no
comment because it had just received a copy of the lawsuit.
Previously, Gilead has said the price for Sovaldi, which
averages about $84,000 per patient for a standard course of
treatment, was justified by the drug's ability to cure a high rate
of hepatitis C patients, which can prevent more costly health care
services down the line, such as liver transplants.
Nicholas E. Chimicles, an attorney representing Septa in the
lawsuit, said the price of Sovaldi is "bleeding health and welfare
plans around the country."
The lawsuit follows renewed debate about drug prices, fueled not
only by Sovaldi but also by other expensive treatments, such as new
cancer medicines from Merck & Co. and Bristol-Myers Squibb Co.
The industry argues that the drugs represent medical advances, and
that companies need to recoup their investments in expensive
research and development, but critics say the prices are straining
health-care budgets and impeding patient access to new drugs.
An estimated three million to five million Americans have
chronic hepatitis C infection. The virus is transmitted via contact
with the blood of an infected patient, including sharing
needles.
Since it hit the market in December 2013, Sovaldi has had the
best prescription drug launch in history, generating $8.55 billion
in sales for the first nine months of this year. In October, U.S.
regulators cleared Gilead to sell a new drug, Harvoni, which
combines Sovaldi with another drug in a single pill taken once
daily and costs about $94,500 for the typical patient treated for
12 weeks.
Administrators of state Medicaid programs and prison systems
have expressed concern that the price of Sovaldi is straining their
budgets and forcing them to limit the drug's use among Medicaid
recipients and inmates.
In July, the U.S. Senate Finance Committee launched an
investigation of Gilead's pricing of Sovaldi, sending a letter to
the company asking for a wide range of documents on how Gilead set
the pricing. Gilead said it is cooperating with the Senate
committee.
The Septa lawsuit accuses Gilead of discriminatory pricing for
Sovaldi because some customers have received discounts and others
haven't. Gilead has taken steps to provide the drug at steep
discounts in developing countries, including providing licenses to
India-based generic manufacturers to sell lower-cost copies.
"While rolling out its self-congratulatory marketing campaign
about how the company is making this lifesaving drug available in
third-world countries, Gilead has been simultaneously gouging its
U.S.-based consumers and third-party payers of the drug," the Septa
lawsuit says.
Write to Peter Loftus at peter.loftus@wsj.com
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