Gilead Sciences Exploited Monopoly Right to Set $1,000 for One Pill of Hepatitis C Drug

Gilead Sciences Exploited Monopoly Right to Set $1,000 for One Pill of Hepatitis

Is it right for pharmaceutical companies to charge patients too high for life saving drugs that they innovate and eventually bring in the market after getting the approval? As per a report about earnings of Gilead Sciences, the company has earned $6 billion in profits within six months from the sales of the hepatitis C drug, Sovaldi.

One pill of Sovaldi costs $1,000 to patients, which makes the price of the full course of treatment to reach more than $84,000 mark. About $270 billion would be spent in total to treat the estimated 3.2 million Americans living with chronic Hepatitis C. The amount is equivalent to what the United States spends on all other prescription drugs combined annually.

Federal law allows pharmaceutical companies to be the exclusive provider of the drug for a fixed period of time as a way to award them for a significant innovation. But this monopoly right has enabled Gilead Sciences to charge $1,000 for the hepatitis drug, which costs no more than $30 per month of treatment to manufacture. Gilead has said that the drug may appear to be very expensive, but it is actually the price patients pay for other treatments that the use of the drug avoids.

But Gilead has forgotten that trust is the only tool to keep prices in check. People depend on drugmakers to be socially responsible. They must set prices that are good enough to earn incentives for their innovation, but should be affordable as well for patients who need them.

Gilead has certainly broken that trust by setting $1,000 for a single pill of Sovaldi. Many patients are not able to afford the $1,000-per-pill drug and insurers are also reluctant to cover the treatment.

"You can't put too fine a point on the sort of moral dilemma that we have here. This is something that the research-based pharmaceutical industry reaches for all the time: a cure. But when they achieve one, can we afford it?" said Michael Kleinrock, director of the IMS Institute, which studies prescription drug trends.

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