AFTER 6 YEARS OF GIVING AMERICANS HEART BURN, TURNS OUT FADED CELEBRITY BARRY O IS THE ONE WITH ACID REFLUX.
"It is estimated that the VA will spend $1.3 billion over the next two years just on this hepatitis C treatment," Senator Mazie Hirono declared at Wednesday's Senate Veterans Affairs Committee.
The issue was hepatitis C in the veterans community. And it was one of two hearings the Senate committee held this week in the final month of the Committee. Next January, new senators take office and the Senate will be under Republican control. Longterm Ranking Member Richard Burr should transition over to Committee Chair with current Chair Bernie Sanders transferring to Ranking Member.
Democrats have controlled the Senate since the results of the November 2006 mid-terms.
During that time, Daniel Akaka and Patty Murray have been Committee Chair and now Vermont's Bernie Sanders.
A very wealthy corporation, Giliad, is getting extremely rich off the price of medications. They refused to attend the hearing,
Committee Chair Bernie Sanders: Prior to the developments of the new drugs from Giliad, the primary method for treating Hepatitis C was interferon -- an injectible medicine that has many side effects that are terribly painful for many patients. Additionally, many patients required additional intervention including liver transplants. These treatments were expensive. According to research by Dr. John Gaetano of the University of Chicago who has special expertise in hepatitis, it is estimated the costs for a person with liver damage over a ten year period can exceed $270,000 and the average liver transplant in 2011 cost $577,100. This brings us to the purpose of today's hearing -- the new treatments for Hepatitis C now on the market and the exorbitant price tag associated with them. Gilead, the manufacturer of Sovaldi, is selling the drug at an astounding price of $84,000 for a twelve-week course of treatment, or about $1,000 per pill. I had invited Gilead to testify today. I had hoped they could share their perspective on the cost of their new hepatitis C drugs. Maybe they could have explained to this Committee why they believe their pricing is fair and reasonable. But unfortunately they declined our invitation because all of their executives who could have spoken on this issue are traveling internationally. Just like any for-profit company, drug companies charge what they think the market will bear. Gilead clearly made the calculation that they could charge excessive prices for this groundbreaking drug and that the federal government would pay. And I get it -- companies are motivated to make a profit. But Gilead is making profits in spades. They purchased Pharmasset -- the original developers of Sovaldi -- for $11 billion and, according to some estimates, are expected to make more than $200 billion on the sales of the drug. With numbers like these, we're not talking about a company looking to make ends meet -- or even fund their next great medical breakthrough. So we must ask, how much is too much?
The issue of cost was at the heart of the hearing which consisted of two panels. The first panel was composed of the VA's Chief Consultant on Pharmacy Benefits Michael Valentino and the Director of HIV, Hepatitis C and Public Health Pathogens Programs Dr. David Ross. The second panel was the president of Public Citizen Robert Weissman and the National Coalition on Health Care president John Rother.
Senator Hirono insisted the current spending on hepatitis C was "not sustainable. It will strain VA resources at a time when veterans are increasing in number and complexity of conditions."
Her concerns included that hepatitis C was "three times higher" in the veteran population than in "the general population" and that "many people infected are unaware that they have it." She also noted that 35 patients at Hawai's VA -- Hirono's home state -- have benefited from the new treatments.
But the new treatments, from Giliad, are very expensive.
Chair Bernie Sanders: Very interestingly, and maybe we can explore this in the second panel, Giliad is making this drug available to countries like Egypt which have a very serious problem with hepatitis C, my understanding and please correct me if I'm wrong, that they are selling -- in this country, they are selling the product for $1000 a pill, in Egypt it is a few dollars a pill. Is that correct? Do you know anything about that?
Dr Michael Valentino: I personally don't. Dr. Ross might.
Chair Bernie Sanders: Dr. Ross, are you aware of that?
Dr. David Ross: I-I --
Chair Bernie Sanders: My understanding is it's ten dollars a pill.
Dr. David Ross: I-I couldn't speak to the specifics of that.
Chair Bernie Sanders: Okay, we'll get more into that in the second panel. Why do you think it's the case that they're selling it to a general American consumer who walks in for a thousand, they're selling it to a huge federal agency -- the VA, which treats more hepatitis patients than anyone else in the country -- at $540 but they're selling it in Egypt for $10? How come they negotiated a better price than you did?
Dr. Michael Valentino: I can't answer that question. I don't know what Giliad's business model is. I don't know how that was able to -- able to be achieved. Uhm, you know those -- A lot of other countries have different regulatory processes.
Chair Bernie Sanders: They sure do. Which results in the United States paying the highest prices of all in the world for prescription drugs. And this may be outside your portfolio in a sense but if the VA is going to spend -- I mean, we have a deficit and some of my colleagues don't like spending a whole lot of money on things -- if the VA is spending billions of dollars -- 1.3 now and maybe more later -- to treat one illness, is it fair to suggest that that will mean that we have less money available to take care of veterans needs in other areas? Is that a fair supposition?
Dr. Michael Valentino: Well, we did -- we did ask for more money and-and-and so, uhm, VA is undergoing a lot of changes right now with, uh, --
Chair Bernie Sanders: All that I'm asking, which I think is pretty common sense. I mean there's a limit to how much -- I'm a strong supporter of the VA, would like to put more money into the VA, but there's a limit to what can be done. All that I'm saying is that if you're spending billions of dollars in one area, common sense suggests that we may not be able to spend in others. That may be a fair supposition?
Dr. Michael Valentino: I would not disagree with that.
Nor on the second panel did John Rother.
This is not just a matter of a thousand dollars a pill. This is a matter primarily of a drug that is potentially beneficial to three to five million people so it's not an orphan drug at all. It's a drug that would be appropriate for a large number of Americans. And, uh, the problem is the total cost of treatment, not so much the individual pill price. Inevitably as you suggest -- as your question earlier suggested, this kind of costs is going to force trade offs with other necessary treatment within the VA, within Medicaid, within prisons, within private health insurance. We are seeing this every day today. And, uh, it's-it's a deep concern because in many cases the services not delivered are the very preventative services that have the greatest return on investment and if we neglect those than we are just making the problem more difficult down the road.
Let's stay with the first panel to note an exchange covering a few basics on hepatitis C.
Senator Mazie Hirono: I think my series of questions deals with whether the marketplace really can -- is operating in a way where there really is more competition for different kinds of treatments that are effective and much less costly though is there a way to prevent hepatitis C? Because once one is infected, there is a progression to the disease. So what are we doing on the prevention side?
Dr. David Ross: Briefly, there is no vaccine for hepatitis C. Transmission for most people occurred decades ago. There are about 20,000 or so new infections a year. The number is actually going up -- almost entirely because of the sharing of needles from injection drug users. So thinks that we are doing within VA is to -- and this is done within hepatitis C care -- help people with substance abuse disorders. We also are doing things -- and again this is integrated with their medical care to try and reduce exposures that could also damage the liver -- particularly thinking of alcohol abuse. And an integrated care approach is much more effective at getting people ready for treatment. One brief anecdote, I have a patient who I saw yesterday who I started on methadone maintenance about six months ago and he is now ready for treatment. In other words he'll be able to reliably take the pills
Senator Mazie Hirono: So these prevention methods that you are utilizing do they -- are they working? I realize it's not that easy to determine whether something that you're doing is actually preventing --
Dr. David Ross: I-I-I think yes. I think the-the-the-the -- It's a matter of keeping people from getting it in the first place but it's also a question of getting people ready for treatment. We're -- What we've done in VA has shown that if you take people who have these barriers to treatment because of other diseases -- frequently substance abuse or alcohol abuse -- and you give them integrated psycho-social care in the same clinic -- this is what has worked at Minneapolis VA and I should mention this is what was done at the Matsunaga VA in Honolulu -- they are more likely to complete therapy and be cured than people who don't have those problems in the first place would be who don't get that kind of supportive care.
But for most Americans with hepatitis C, the costs for the needed treatment are too high.
It doesn't have to be that way, as Robert Weismann explained:
Now some have held out hope that new treatments will lead to price competition or that hard bargaining by payers -- of which the VA is the best -- will be able to yield sufficient price reductions and I think that's misguided. Based on prior experience, new drugs don't necessarily come in at a lower price. In fact, they often come in at a higher price. In general, brand name competitors try not to compete on price. And when you have a starting point price of $84000 even if we have substantial reductions in price due to negotiations we're still going to be stuck with a super high price just because the starting point was so high. However, we do have solutions available to us and really fundamental solutions. Now we should say -- I think it's correct, everything you say, Senator Burr about both the importance of innovation and looking at government policy. The reason for this price level -- as both of you asked -- is a single thing which is Giliad has a monopoly. Giliad doesn't have a market created monopoly, they've got a government granted monopoly, a patent monopoly, a monopoly that comes from other exclusivities. If we choose to address that monopoly through government policy -- since We The People gave the monopoly in the first place -- we can bring the price down. And we know we can bring it down to less than 1% -- at least at the manufacturing level -- leaving aside whatever fair compensation we need to pay to Giliad because of the price reductions that already exist in developing countries as you referenced, Senator Sanders. Two methodologies we might pursue to reduce price. One. we might have just government use of the product -- government use of the patent and other technologies -- in that case we could source the product to generic competitors and pay Giliad a royalty. If we pay Giliad a royalty of five thousand dollars per patient, we'd actually still have cut the price overall by 90%. We've got existing staturoty atuhority to do that under 28 USC Section 1498. A different approach might be to look to buy out Giliad's patent all together. We could do that in one way which would be to say we're just going to give Giliad as much money as we anticipate the company will make by virtue of it's patent monopoly. Why would we do that? Well we'd do that because we're already going to pay them that much money but we could then provide treatment to everyone whereas under the current system we're going to pay all that money and have rationing. Now I wouldn't advocate doing that. I think we can adjust down significantly what we would pay for a patent buyout but it is another method we might consider to provide treatment for all.
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