The $1,000-pill heist

You’ve got hepatitis C, now you’re my hostage

DRUG BUST by Alan Cassels

• The people’s briefing note on prescription drugs
Portrait of columnist Alan Cassels

A friend of mine who works in the Canadian insurance industry told me they’ve seen their first claim for the new drug called Sovaldi.

New drugs come along all the time, but not drugs like this one, which claims to eradicate a disease suffered by thousands of Canadians. Sovaldi (sofosbuvir), approved just this year, is used to treat chronic hepatitis C infection. It arrived on the market in the US with incredible hype and an astonishing promise you don’t hear very often: cure. Very few drugs can guarantee they’ll take a life-long, and sometimes life-threatening, condition and wipe it out. Cures are so rare I can’t remember the last time we heard of one in relation to a drug.

As for the impact on society, Sovaldi may soon be a word synonymous with unaffordability in drug insurance. While my friend was sanguine about the prospects of a cure arriving at the door of insurers, she said this new drug has the potential to “make group insurance plans unaffordable for many employers, particularly small ones.”

That’s a pretty bold statement, but at about $84,000 (US) for a course of treatment that lasts about three months, the $1,000 pill has the potential to break the bank for many of those who pay for drugs.

Of course, how much this new drug will hit our public and private drug insurance plans really comes down to deciding how big the patient population is. Determining how many patients ‘need’ this drug is going to be extremely controversial, especially given there are an estimated 300,000 Canadians said to be infected with the hepatitis C virus. If we treated them all with Sovaldi, at that price, we’d spend almost the entire amount Canadians spend on prescription drugs in an entire year (about $30 billion).

In the US, UnitedHealth Group Inc, the largest US health insurer, spent more than $100 million in the first three months Sovaldi was available, much, much more than anyone expected. This, however, is just the start because Sovaldi is the first of four or five “Direct Acting Antiviral Agents” (DAA) drugs for hepatitis C coming to market over the next few years. The private insurers, who provide extended health insurance many Canadians get through their employers, will be hardest hit and they’ll end up doing what insurers always do when facing this kind of financial tsunami: increase premiums. Or the employer just decides insurance is too expensive and stops covering its employees.

The $1,000 pill has generated no end of consternation amongst pundits in my field – wondering who will pay for it – but I think ridiculously overpriced drugs are interesting in the same way outlandishly bombastic people are: they tend to challenge our beliefs and force us to closely examine what it is we really value. A $1,000 pill, I believe, vaults us into a new kind of conversation and demands that we think very carefully about economic value, tradeoffs and whether or not we are being held ransom by a company promising cures for thousands of people. Incidentally, these are the same questions we need to ask about every new drug, not just the hyper expensive ones.

Much of the critical commentary portrays the company as holding people hostage with the $1,000 pill. I don’t think that way at all. Patients are only hostages if the pill represents freedom. But maybe it doesn’t. Maybe we need to ask, “compared to what?”

Hepatitis C is a viral infection usually acquired through injection drug use or tainted blood and it can destroy your liver. It’s probably one of the most common blood-borne viral infections in the world and likely more than 75% who carry the virus aren’t even aware they are carriers.

You might carry the virus and have no symptoms even as it slowly eats your liver. Because there’s no viable vaccine for it – and there’s a huge pool of potential patients (read: large, potentially lucrative market) – finding better treatments for hepatitis C has long been in the industry’s sights.

As to how well the drug performs, I turned to the Oregon Health and Science University, which issued an assessment on Sovaldi this past May. Visit Search for sofosbuvir and then Click on Medical Evidence Based Decisions and scroll down to Sofosbuvir for the Treatment of Hepatitis C.

This report reminds us that only about five to 20% of the people infected by hepatitis C will ever go on to develop liver disease. About 1-5% of those will die of cirrhosis or liver cancer. It’s a slow growing disease and up to 25% of those infected will clear it spontaneously.

When the Oregon folks looked for all available research on Sovaldi, they found 10 studies, all of which were considered to have “a high risk of bias.” In fact, none of the studies could really apply to the real world and only one compared Sovaldi to a comparative drug currently used. Nor were the patients in the studies really representative of ‘real world’ patients – healthier, mostly white, etc. – who would likely use the drug and because Sovaldi wasn’t compared against the standard triple therapy used now, we can’t really say for sure if it’s any better than what is currently used.

As for long-term effects or harms involved in the new treatment, the reviewers noted the Sovaldi studies weren’t big enough or long enough to see if it made much of a difference. The worst part is many of the studies were designed in a way that left the manufacturer, Gilead, in charge of monitoring adverse effects. We know this leads to under-reporting and as one commentator noted, “Reporting of adverse events is often incomplete.”

One of the most prominent studies of Sovaldi found that about 3% of patients experienced severe adverse effects, compared to 1% of comparable patients taking peg-interferon. The group Adverse Events, which tracks side effects of drugs, said, “There really was no clear evidence that Sovaldi was really a miracle drug.” In other words, it couldn’t cure most people with fewer side effects compared to what is currently used.

But what to do about the thousands of hepatitis C patients clamouring for the new drug because the hype around the $1,000 pill has been so extraordinary? While threatening to make many capitalists rich – including the CEO of Gilead who will be a billionaire according to Bloomberg. Visit and search for Gilead CEO becomes billionaire – it will make the rest of us a little poorer.

Do we need to be treating people who carry the hepatitis C virus? Some, absolutely. Do we need to be bankrupting our health care system to do so? Absolutely not.

The drug has been approved in Canada and so far only Quebec has agreed to pay for it. The other provinces are still trying to figure out what to do. If you have private insurance through your employer, get ready to pay a whopping big increase in your premiums next time you renew the policy. Here at home in BC, our provincial Drug Benefits Council, whose job is to advise the government on funding decisions, is hearing from physicians, patients, caregivers, patient groups and, of course, the manufacturers. If you have an opinion, maybe you’d like to weigh in (Google: Pharmacare, Your Voice) and you can join the likes of HepC BC, the local hepatitis C advocacy group supported by at least six drug companies, including Gilead, the maker of Sovaldi. We should never be so naïve as to think this is an unbiased process.

What should insurers do in the face of such potential calamity? Not an easy answer, but the best place to start is by doing what any good drug plan in the world does: play hardball with the manufacturers on price and limit coverage to only those very few patients for whom there is evidence of effectiveness and for whom it is working. And refuse to see yourself as a hostage.

Will we let a single drug destroy Canada’s drug insurance system? We could or we could act rationally and make the tough decisions we need to ensure we all have the insurance we need to keep us healthy.

Alan Cassels a pharmaceutical policy researcher at the University of Victoria and consults with employers and employees on drug benefit issues.

4 thoughts on “The $1,000-pill heist”

  1. The price for Sovaldi in Canada is not $84,000 (US). The price on the treatment is $55,000. This works out to $650, not $1,000 per pill.

    This article is misleading on several points and the author is way in over his head on his understanding of the disease.

    His suggestion to give treatment only when it is known it will work is completely unfathomable when Canada refuses to implement a national screening program.

    BC CDC estimates there are 15,000 to 30,000 people in BC born from 1945 to 1965 who are yet to be diagnosed.

    Canadian research indicates that health care costs will be higher if this epidemic continues to be left unchecked.

    But to point a finger at non-profit HepC BC as biased demonstrates his own preference towards a privatized health care system; an American health care system.

    Check your facts people!

    • The misnomers in this article aren’t addressed properly in my response. Please do not post. This is a retraction.

  2. Hello – it’s great to read and hear so much about hepatitis C in the media right now. I appreciate Warren Bell’s reply above – this is indeed a perfect storm and I think the context of hepatitis C right now highlights the problems inherent with this permissive government policy climate in relation to the pharmaceutical industry. A number of community and patient groups are raising this issue this World Hepatitis Day, calling for governments to bring pressure to bear on industry to lower the cost of these curative – and therefore lifesaving – treatments. You may know that hepatitis C affects as many as 80,000 British Columbians, many are baby boomers who don’t know of their infection or who are poorly monitored by their physicians. I don’t have hep C but I work with and behalf of many people who do. I have seen people die terrible, untimely deaths from liver disease due to hepatitis C – people who didn’t know they were infected or who were poorly monitored until it was too late, and those who couldn’t tolerate or didn’t qualify for the current standard of care. And I’ve seen people get cured, some of whom are very sick, with the new direct acting anti-virals for hepatitis C. So while all those pieces – greed, collusion, manipulation at highest levels – swirl around, people most affected by these decisions wait, get sick and too often die needlessly. For me, it isn’t about putting more money into the pockets of rich people, it’s about social justice and having a level playing field in this particular time and place – and that is reasonable, timely, affordable access to safe(r) and effective treatments for a potentially deadly disease. Further, while it is true that only a certain percentage of folks go on to clinical liver disease, many more suffer symptoms from the virus and, right now, there is no way to know who is going to progress. We know that hepatitis C is the leading cause of liver transplantation in Canada and that liver disease due to hep C is on the rise. The health burden due to hepatitis C will rise dramatically in the next ten years. This must be addressed. And finally – while Hep C BC receives funding from industry, I can tell you that they are small group of incredibly dedicated people living with this virus who volunteer their time to make sure that anyone living with hepatitis C gets the information and support they need. They do that because it’s what makes sense to them, as patients, not because industry told them to. Thanks for this forum to respond to this article.

  3. This article lays out clearly the dilemma that permissive government policies towards the drug industry have created. Too ideologically driven to ask hard questions of manufacturers, governments like BC’s — which never met a drug company it couldn’t learn to love — are now faced with a perfect policy storm: a drug that is flagrantly overpriced, but which is designed to treat a real disease (much of which was created by the tainted blood scandal of a few years ago — another result of lax government oversight). So what to do? The obvious thing to do would be to insist on seeing the books of Gilead, the producer of this fiscal behemoth. But Christy Clark, like other government heads, has thrown her lot in with the drug industry, which in her eyes can do no wrong — even when it’s manifestly doing just that!

    It’s time for us all to rethink our relationship with the out-of-control corporate sector, where businesses have almost all the rights of citizens, but hardly any of the responsibilities. It’s time to stop living in an ideological dream world, and wake up and smell the skunk cabbage.


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