On Friday, a letter from BIO President and CEO Jim Greenwood was published in the Wall Street Journal, arguing that curing hepatitis C is cheaper than the alternative of open ended care. The full text of the letter is below:
President and CEO of America’s Health Insurance Plans (HIP) Karen Ignagni’s “Paying for the Thousand-Dollar Pill” (op-ed, Aug. 4) plays down the fact that Sovaldi has been shown to achieve a high cure rate for hepatitis C, which over time may not only allow millions of people to lead healthier and more productive lives, but also reduce long-term costs, including expensive hospital visits and, in some cases, the need for liver transplants. A 2013 paper in Hepatology estimated average lifetime treatment costs (including medical inflation) at over $200,000 per patient. The reality is that the cost of Sovaldi is in line with other hepatitis C treatment regimens.
Without the limited period of patent protection given to innovator drugs, it would be virtually impossible to attract private investment into the expensive and risky drug-development process.
Further, the argument that we should link the price of a drug only to its individual development cost ignores the basic economics of drug discovery. Only one in 10 potential medicines that are tested in clinical trials goes on to become an approved treatment, and only two in 10 of those ever produce enough revenue to exceed their development costs. Revenues from successful treatments are necessary to fund the numerous, expensive failures in drug development.
Patients who rely on medical innovation cannot afford a shortsighted focus on drug costs, which over the past decade have remained steady at about only 10% of total health-care spending. Recent progress in hepatitis C and other disease areas demonstrates that America’s world-class drug-development ecosystem is working for patients.
President and CEO
Biotechnology Industry Organization