Gilead Sciences’ blockbuster pill for Hepatitis C, Sovaldi (sofosbuvir), has been causing plentiful sticker shock since it hit the market at a thousand dollars a pop, or more than 80 grand for a treatment course. The Hepatitis C virus, which until 1989 was so mysterious that it was referred to as “non-A, non-B,” is the most common chronic bloodborne infection in the U.S., encountered mainly in the context of intravenous drug abuse. It is a leading cause of chronic liver disease and cirrhosis. About 3.2 million Americans are infected, with new cases (mostly due to shooting drugs) having fallen from an average of 240,000 a year in the 1980’s to under 20,000 now. Gilead was founded in 1987 by Michael Riordan, a Johns Hopkins med school grad who honed his M.D. at Harvard Business School before launching a career in the pharmaceutical industry. He seems to have held an affection for Republican power brokers, recruiting both Donald Rumsfeld and George P. Shultz to the young company’s board. Rumsfeld served as chairman until 2001, when he joined the Bush administration as Secretary of Defense.
Hopkins has figured prominently in Sovaldi’s development, with a key study funded by Gilead and led by professor Mark Sulkowski, a paid consultant to the company. Concerned about conflict of interest? Hopkins reassures by claiming that “the terms of his arrangements are managed by The Johns Hopkins University in accordance with its conflict of interest policies.” What this bromide means in practice is that Sulkowski’s compensation for the Sovaldi research work takes the form of a contract payment to Hopkins. Thus, Sulkowski doesn’t get remunerated directly by Gilead, except for his time as a consultant, nor is his Hopkins salary directly boosted. This is a lawyerly shell game, of course, which belies the enormous value to Hopkins as an institution, and to Sulkowski personally, of performing and publishing such research.
Unless the crushing economics of Sovaldi change radically, all this will bring scant benefit to the poverty-stricken, drug-plagued East Baltimore ghetto that surrounds the medical campus and supplied Sulkowski’s test subjects. Perhaps Riordan, Rumsfeld, and Schultz would care to endow a free Hep C clinic there with the millions they’ve made from Gilead stock?
There is a balm in Gilead
To make the wounded whole
There is a balm in Gilead
To heal my sin sick soul
Or maybe not, unless you’ve got $80k
Update: The good old “invisible hand” at work. Or something. Since 2006, when Congress gifted the pharmaceutical business with a prohibition against the Federal government negotiating lower prices for prescription drugs, even through Medicare, Adam Smith has been the only man at the cash register.
Update: India, pharmacy of the developing world.
Update: The key to the federal candy shop. Medicare spent $4.5 billion in 2014 on new Hep C medications—more than 15 times what it spent the year before on older treatments. Sovaldi accounted for more than $3 billion.