Amid concerns over the high cost of its new treatment for hepatitis C, drugmaker Gilead Sciences Inc. reported $5.8 billion in sales for its blockbuster Sovaldi drug in the first half of 2014.
The successful product launch boosted Gilead's second-quarter results released Wednesday, but the drug's price tag of $1,000 per pill continues to upset lawmakers, health insurers and state Medicaid programs worried about the negative effect on healthcare costs.
The San Francisco-area company said Wednesday that about 70,000 U.S. patients have been prescribed Sovaldi since it launched in December. A 12-week course of treatment costs about $84,000.
This month, two U.S. senators asked Gilead to produce documents to explain its rationale for pricing Sovaldi out of concern about increased costs for government healthcare programs such as Medicare and Medicaid. Gilead said it's cooperating with that request.
Roughly 3 million people in the U.S. suffer from chronic hepatitis C infection, which left unchecked can lead to death. And more Americans are expected to discover they have the disease as screening becomes increasingly common.
Medical experts say Sovaldi marks a major advance over existing treatments because it offers cure rates as high as 95% with fewer side effects for patients. Gilead says the new therapy can avoid the long-term medical expenses related to liver failure, cancer and transplants.
Wednesday, Gilead said about 9,000 patients have been cured of hepatitis C after finishing their 12-week regimen of Sovaldi. The company said some of the criticism of Sovaldi may subside as government officials and other healthcare payers see the benefits from patients being cured.
"The healthcare system will save a lot of money with these people being healthy again," John Milligan, Gilead's president and chief operating officer, said on a conference call with analysts.
Gilead posted $2.3 billion in Sovaldi sales in the first quarter and $3.5 billion in the second quarter for the U.S. and Europe, ahead of analysts' expectations.
In California, state officials said about 600 patients as of May had received Sovaldi through Medi-Cal, the state's Medicaid program for lower-income residents. Norman Williams, a spokesman for the California Department of Health Care Services, said those prescriptions had cost Medi-Cal about $27 million thus far.
But there are concerns that price could quickly soar as more doctors and patients demand the drug. Late last month, Medi-Cal released treatment guidelines for Sovaldi that try to limit its use to patients that already have advanced liver disease.
The new state rules also require Medi-Cal patients to undergo drug and alcohol testing before getting approved for Sovaldi. Gilead executives said many Medicaid programs across the country are requiring prior authorization for Sovaldi to slow the rate of new prescriptions.
Some patient advocates say California's treatment guidelines are too strict.
"They're rationing care — that's what this policy boils down to," said Emalie Huriaux, director of federal and state affairs for Project Inform in San Francisco, which lobbies for wider access to therapies. "They're making treatment decisions based on the cost of the drug, not on the patient's condition."
In a report published last week, pharmacy benefit manager Express Scripts estimated that California's tab for Sovaldi could reach $6.6 billion for 93,000 patients with hepatitis C who have Medi-Cal or who are covered by the state prison health system.
Gilead reported its quarterly results after the markets closed Wednesday. Its shares rose $1.01, or 1%, to $90.34 Wednesday.