Why Sovaldi Shouldn't Cost $84,000

The healthcare payment world is justifiably upset over the escalating cost of treating those carrying the hepatitis C virus, which leads to 19,000 deaths a year from cirrhosis and liver cancer. A 12-week treatment with Sovaldi costs $84,000—approximately $1,000 a pill.

Medicaid managed-care plans are demanding relief from state officials to meet mounting outlays for Gilead Sciences' wonder drug, while insurer WellPoint called Sovaldi its “biggest watch item.”

The pharmaceutical industry's defense of the price tags placed on specialty drugs such as Sovaldi hasn't changed in decades: Their price reflects the cost and risks of research and development. Gilead also points to Sovaldi's comparative effectiveness. It has a 90%-plus cure rate with minimal side effects. Interferon, the prior treatment, is only half as effective, triggers flu-like symptoms with every shot and still costs up to $50,000 a year.

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Source: Modern Healthcare