January 27, 2016
By Ransdell Pierson
Massachusetts' attorney general is studying whether the prices of Gilead Sciences Inc's blockbuster treatments for hepatitis C violate state law, according to a letter the prosecutor sent to the California drugmaker.
The letter from Attorney General Maura Healey to Gilead Chief Executive Officer John Martin, dated Jan. 22, asked the biotechnology company to reconsider its pricing for Sovaldi (sofosbuvir) and Harvoni (ledipasvir/sofosbuvir), Gilead's treatments with list prices of $84,000 and $94,500, respectively, per course of treatment.
"My office is considering whether Gilead's pricing strategy with respect to Sovaldi and Harvoni may constitute an unfair trade practice in violation of Massachusetts law," Healey said in the letter, a copy of which was viewed by Reuters via email.
Shares of Gilead were down 2.1 percent at $90.30 on the Nasdaq on Wednesday, outpacing the 0.3 percent decline for the Nasdaq Biotech Index.
Gilead has been harshly criticized by insurers, politicians and patient groups for prices of the two treatments, which can cure well over 90 percent of patients with the liver disease. The Foster City, California-based company has defended its prices, saying the drugs greatly reduce long-term costs to the healthcare system by preventing liver cancer and the need for liver transplants.
RBC Capital Markets analyst Michael Yee said the targeting of Gilead was more political rhetoric.
"Since when is it a crime to have cured a global epidemic afflicting millions of patients, and the price is the same as the older drugs, which had less cure and bad side effects?" Yee said.
Healey said as many as 3.9 million Americans are infected with the potentially fatal hepatitis C virus, which can steadily damage the liver over decades, and that fewer than 10 percent have been treated. More than 130 million people worldwide are believed to be infected.
She accused Gilead of pricing the drugs "in a manner that effectively allows hepatitis C to continue spreading through vulnerable populations, as opposed to eradicating the disease altogether, (resulting) in massive public harm."
"Patients do not benefit from a drug they cannot afford," Healey said, noting that Gilead sells Sovaldi for roughly $10 per pill in Egypt, but $1,000 per pill in the United States.
The attorney general's civil enforcement attorneys will continue to examine the potential claim for unfair commercial conduct, Healey said in her letter.
Gilead officials could not immediately be reached for comment.
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