The cost of curing hepatitis C | Business| Economy and finance news from a German perspective | DW | 11.06.2015
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The cost of curing hepatitis C

Up to 150 million people are estimated to be infected with hepatitis C and it kills around 500,000 people every year. Now there’s hope in the form of a new drug, but it’s expensive. How much should a cure cost?

James Jensen was just four years old when he contracted hepatitis C. But it was only 55 years later that the 61-year-old discovered he had the deadly virus.

Jensen underwent various treatments to try to battle the disease, but with little success.

Then came Harvoni. The new drug cures more than 90 percent of cases but comes with a price tag of up to $100,000 for a 12-week course of treatment in the US. Jensen’s health insurer initially refused to pay.

“I felt that I was given a death sentence because that’s what this disease can do,” he told DW. “I was frightened and I still am.”

11.06.2015 DW Global 3000 James Jensen_HepC

James Jensen is being treated for hepatitis C with Harvoni in the United States.

Jensen is still undergoing treatment, but now he is considered one of the lucky ones. After months of lobbying his insurer, he is now being treated with the new drug. But with many private health insurers and governments judging the drug too expensive, others have been less fortunate.

The silent killer

Developed by Gilead Sciences, Harvoni is at the center of controversy over skyrocketing drug prices for medications for conditions including cancer, multiple sclerosis, diabetes and heart disease.

While many such high priced drugs target rare diseases with a smaller patient population, up to 150 million people are infected with hepatitis C with around 500,000 dying each year from related liver conditions, according to the World Health Organization (WHO).

Known as a silent killer for its tendency to remain unnoticed for decades, hepatitis C attacks the liver and can cause cirrhosis and liver cancer. Transmitted through unscreened blood transfusions, injections, and sometimes sexually, in many cases there are no early symptoms, meaning many do not know they have it until their livers are already damaged.

Until recently, treatment of hepatitis C was limited to drugs such as interferon. A course of interferon therapy can last up to a year, or more in some cases, with side effects likened to those of chemotherapy and including tiredness, nausea, depression and hair loss, among others.

11.06.2015 DW Global 3000 HepC

WHO's Wiktor says health systems, particularly in middle- and low-income countries, need an overhaul to ensure hepatitis C is detected in patients.

A follow-on drug from the Gilead’s older hepatitis C treatment Sovaldi, the WHO has heralded Harvoni as a “therapeutic revolution” – a one-pill per day treatment that in most cases cures the condition within eight weeks. But the majority of those infected live in middle-income countries in the Middle East and Central and East Asia and the drug’s high price means it is out of reach for many suffering from the disease.

“It’s part of an overall movement to more and more expensive drugs,” said Stefan Wiktor, team leader at the WHO’s Global Hepatitis Program. “It’s rare that you have a drug that is so much better and safer than the one before…but it’s not right that these drug [prices] are so high. People are dying unnecessarily because these drugs are too expensive.”

Pricing reductions ‘not enough’

Gilead, like other drug companies, has responded with a system of tiered pricing, meaning the cost of treatment varies depending on a country’s standing on the economic development index. Drugs cost more in Europe and the United States, while nations lower on the index pay less. In Egypt, which has the highest proportion of sufferers in the world at 14.7 percent of the population, treatment is priced at $900.

“It’s a fraction of what it costs in Europe and the US and we think that’s fair and it’s the right thing to do,” said Norbert W. Bischofberger, chief scientific officer at Gilead.

The US-based biotech has also licensed its drug Sovaldi to generics producers in India to make it available at lower costs in 91 developing countries.

“We do the best to make it available in all countries in the world,” added Bischofberger. “We’re working very hard to make it available everywhere, that’s our philosophy so in the end everyone that needs it has access to it.”

Still, with an average annual income of around $3,140 for those living in Egypt alone, critics say the reductions are not enough, especially when taking into account the production costs of the treatment.

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Stefan Wiktor, team leader on the Global Hepatitis Program at the WHO, says drugs are becoming more expensive.

“There have been analyses…taking consideration of even a small margin and it’s less than $200. There’s a lot more room for these drugs to come down in price,” said Wiktor.

Soaring profits

Among the factors drug companies like Gilead blame for such high prices are development costs of such medications. But with increasingly high profits, it is becoming hard to justify such reasoning to a public with ever-waning patience.

Gilead acquired the rights to sofosbuvir, the active ingredient used in both Sovaldi and Harvoni, through its purchase of company Pharmasset for $11 billion in 2011. At the time, it was seen as a gamble, but it has already paid off, at least in part.

In the year since Gilead was granted approval for Sovaldi and later for Harvoni, its sales rose to $24.8 billion in 2014. Meanwhile, company profits soared to $12.1 billion, nearly four times as much as the year before. And in the first quarter of 2015 Harvoni brought sales of antiviral products up to $7 billion.

11.06.2015 DW Global Gilead Sciences Eng

Eradicating hepatitis C

Gilead has said it would like to see the eradication of hepatitis C within 10 to 15 years and with the development of such a cure, experts say it is biologically feasible, at least in theory.

But in practice, many people don’t even know they are infected and more needs to be done to test for the virus and prevent transmission in the first place.

“This is a really historic point in time – any time you make such dramatic leaps in the effectiveness of treatment, it really raises the visibility of the problem,” said WHO’s Wiktor. “But we really need to scale up testing and get the whole health system trained on how to deliver these drugs, how to evaluate patients and how to use these drugs. That’s what we’re trying to work on, but a lot has to happen and it’s not just about reducing the price of the drugs.”