Have you ever wondered how our society values innovation, how it rewards breakthrough discoveries? Most people say that it’s the price we place on new drugs that shows how much we value the breakthrough. Supposedly our willingness as a society to pay more and bear extraordinary costs for newer drugs rewards a company for the development costs, risk and, ultimately, the breakthrough it makes. That leaves very little room for bargain hunting in our healthcare system until a generic substitute appears on the market. However, examining the price to the value of goods and services we exchange in society is rarely a rational process. Sometimes, though, it’s all too rational as can be evidenced in the recent pricing of a new drug and the re-pricing of a nearly 30 year-old generic drug.
Earlier this year Gilead Sciences, Inc. – a proven cutting edge biotech, an innovator of new medicines, and an acquirer of companies with risky product candidates who then assumes the responsibility to complete clinical trials and commercialize the drug if approved – delivered with a new drug called Sovaldi. It’s more than just a treatment. For the majority of patients who receive Sovaldi, it’s a cure for Hepatitis C, a chronic disease that eventually destroys the liver leading to complications that could cost well over $600K to treat. Eventually this results in total organ failure and an agonizing death for many patients.
Gilead set the price for Sovaldi at $84,000, which was met with a great deal of controversy and indignation from insurance companies and members of Congress alike. In this instance Gilead is doing what we want our biotech and Big Pharma companies to do: Be innovative and cure disease. And for that, $84,000 is a very small price to pay for a cure. Some analysts built models that priced and justified Sovaldi as high as $500,000 for a full course of treatment.
In cases where diseases can’t be cured, we manage them on a day-to-day basis and make those diseases chronic illnesses. That’s what Hepatitis C used to mean for people afflicted with the virus, a chronic disease. Most new breakthroughs, ones for which we pay some of the highest prices in the world for, only treat to manage disease. Let me be clear: Gilead’s drug doesn’t manage Hepatitis C; it eradicates it.
Recently a small company called Retrophin, Inc. licensed a generic drug called Thiola in May 2014 from Mission Pharma, a San Antonio, TX based company. Originally approved in 1988 by the FDA, Thiola is sold as 100 mg tablets used to treat a chronic illness called cystinuria. With approximately 20,000 patients in the U.S. with cystinuria, this rare disease is a lifelong affliction for which there is no cure. Patients are usually diagnosed with the disease at a very young age and have an abnormally high concentration of an amino acid called cystine present in their urine. The excess cystine crystallizes regularly into stones that painfully travel through the kidneys, ureters or bladder. Imagine having a kidney stone form or pass once a month, tearing through your organs as it tracks its way out of your body.
