Re: "Price could fall for new hepatitis C drugs, aiding state budget" (TNT, 2-21).
The article on exorbitant new drug prices, such as on Gilead Science’s hepatitis C drug Sofosbuvir (brand name Sovaldi), highlights a growing trend. Gilead’s list price of $84,000 for a 12-week treatment illustrates the unbridled greed of drug companies.
Governments routinely regulate the profits of private utilities. It is about time we regulate drug company profits; other countries do. Gilead offered to provide the drug to India for $300 in an effort to head off India’s refusal of Gilead’s patent, but India refused anyway saying that it is very similar to previous drugs and that $300 is still twice its manufacturing cost.
Our tax laws encourage this greedy behavior. Sofosbuvir was developed by Pharmasset, which was purchased by Gilead in 2011 for $11 billion cash, an 87 percent premium over its stock value. This gives Pharmasset investors a handsome profit that will be taxed at the lower capital gains rate. Gilead can now justify its high prices because it “cost” $11 billion to develop the drug. (In 2014, Gilead made $10.3 billion from sales of Sovaldi)
We can rein in the prices of new lifesaving drugs with a national drug pricing board or take India’s approach and just void their patents. Personally, I suggest we arrest the CEOs and CFOs of Pharmasset and Gilead, seize their records and charge them with felony extortion.
If asking someone with a chronic case of hepatitis C to pay $84,000 to extend their life is not extortion, I don’t know what is.