FDA approves hepatitis C drug that costs $1,125 per pill

FILE - This Thursday, March 12, 2009, file photo shows Gilead Sciences Inc. headquarters in Foster City, Calif. (AP Photo/Paul Sakuma, File)

WASHINGTON – Federal health officials have approved a daily pill that can cure the most common form of hepatitis C without the grueling pill-and-injection cocktail long used to treat the virus.

But the drug's $1,125-per-pill price is sure to increase criticism of drugmaker Gilead Sciences, whose pricing strategy for an older hepatitis drug has already drawn scorn from patient groups, insurers and politicians worldwide.

The Food and Drug Administration said Friday it cleared Gilead's Harvoni combination pill for patients with genotype 1 of hepatitis C, a form of the liver-destroying virus that accounts for 70 percent of the estimated 3.2 million cases in the U.S. For the first time ever, those patients will not have to take a decades-old combination of antiviral pills and shots that causes flu-like side effects.

The new pill combines Gilead's blockbuster Sovaldi, approved last December, with a new antiviral drug called ledipasvir, which attacks the virus using a different mechanism. The dual-acting approach mimics drug combinations Gilead has long used to treat HIV.

It's another breakthrough for Foster City, California-based Gilead, which analysts expect to bring in billions of dollars in new sales. The company says the new drug will cost $94,500 for a 12-week supply. About 40 percent of patients may be able to take the drug for eight weeks, reducing the price to about $63,000.

But patient advocates on Friday renewed their criticism of Gilead and the pharmaceutical industry trend toward sky-high drug pricing.

"When history is written, this is going to be the breaking point where drug prices went completely out of control and nobody did anything about it," said Michael Weinstein, president of the AIDS Healthcare Foundation. "Never before has a drug been priced at this level for such a large population." About 25 percent of people with HIV infection are also infected with hepatitis C.

Other groups noted that the eight-week regimen could make the medicine more palatable to insurers, improving access. The shorter treatment option is recommended for patients who have not been treated for the disease before and don't have advanced liver damage.

Gilead executives say Harvoni's price is actually slightly lower than the current standard treatment: Sovaldi plus a cocktail of two other drugs, which the company estimates comes to $95,000 for 12 weeks, on average. Despite such explanations, the new drug's approval is sure to renew scrutiny of prices for life-saving drugs.

Members of the Senate have already asked Gilead to hand over documents detailing its decision to price Sovaldi at $84,000 for one 12-week regimen.

The health insurance industry has been blasting Gilead for months over Sovaldi's price, and most insurers require prior authorization before they will pay for it. The industry's leading trade group said Harvoni would continue to drive up health care costs.

"Gilead had an opportunity to demonstrate that it wants to be part of the affordability solution, but the company still seems to believe it has a blank check," said America's Health Insurance Plans, in a statement.

Gilead executives say their drugs are cost effective, despite their large upfront cost, because they cure more patients in less time than older drugs, and prevent the catastrophic problems for patients like liver failure.

"Insurers must be willing to invest in the long-term health outcomes of their patients. They can't just look at it as an immediate cost," said Gilead Vice President Gregg Alton in an interview with The Associated Press.

Sovaldi will continue to be used by patients with three other genotypes of the virus, who account for about 20 to 25 percent of U.S. cases. Those patients were already able to take Sovaldi without the combination of ribavirin pills and interferon injections, a combination that can cause nausea, fatigue, rash and other symptoms.

Company studies submitted to the FDA showed that Harvoni cured between 94 and 99 percent of patients across three trials of 1,500 patients with various stages of the disease.

Hepatitis C causes at least 15,000 U.S. deaths per year, according to government figures. Hepatitis C grows slowly over decades and many people don't realize they are infected until liver damage has already occurred. People born between 1945 and 1965 are five times more likely to have the virus than people of other age groups, and federal health authorities are urging all baby boomers to get tested.

Sovaldi racked up about $5.8 billion in sales in the first half of 2014, making it one of the most profitable drug launches of all time. Gilead expects to treat 150,000 patients this year and another 200,000 in 2015.

AbbVie, Merck & Co. Inc., Bristol-Myers Squibb and other drugmakers are each racing to complete their own pill-only hepatitis therapies.

Pharmaceutical consulting firm Decision Resources estimates that the global market for hepatitis C drugs will grow to more than $30 billion by 2016.

Shares in Gilead Sciences Inc. ended Friday down $2.12, or 2 percent, at $103.73. They have gained 38 percent so far in 2014.