Is a drug like Sovaldi worth it?

Recently I had separate discussions with 2 industry experts, and during those discussions the topic of Sovaldi came up. I was aware of the ongoing debate, and these conversations made me think about it further, and so I thought I would share my thoughts.

There have been many articles on this topic and most on the side that the drug is expensive and that insurance companies, and consequently the healthcare system, cannot afford it. There are several reasons why a drug may be worth the price including 1) the drug is tackling a life threatening disease, 2) the investment costs for the company to develop the drug, which as cited in literature keeps increasing and is on the order of around of billions of dollars, 3) if the drug is more effective than existing drugs in the market for that therapeutic area.

Beyond the above reasons, the patients are also paying for the innovation factor, just like a consumer would pay for a breakthrough innovative first in class product, such as the iphone, or the ipad or an LED TV screen. The current pharmaceutical paradigm is not sustainable (refer to my previous post, here), both in terms of economy/jobs and also bringing those innovative new medicines to market. Innovation is in demand, which is an investment in time and money. All the so called low hanging fruit of new therapies are gone, and now the industry has to reach further into the trees. Pharmaceutical companies can reinvest some of their profit from these “blockbuster drugs” into bringing more innovative medicines to the market that patients need. I propose that some attention also be placed on the profitability of insurance companies and their coverage of patients.

Can the question be asked, what price is too high? Yes, maybe. That same question can be asked for all innovative products. There might be a slight validity to that. Although if a drug is tackling a life threatening disease in the way that Solvadi is, essentially “curing” the disease with minimal side effects, I do not think you can make a strong enough case against it. A recent article puts the innovation factor into good perspective (check it out here). Gilead is also trying to do the right thing by bring costs lower in developing countries through collaborations with Indian Pharmaceutical companies (see article here). Another interesting article is in the Wall Street Journal (here).