The Scoop: The $1,000 Pill

Statement

A new drug for Hepatitis C is drawing attention, both for its treatment potential and its price for patients. The drug, called Sovaldi, costs $1,000 per pill, $84,000 for a standard treatment. Under one analogy, losing an expensive pill is like dropping a diamond down the sink.

Treatments for complicated cases might cost more than $84,000. State governments, the federal government and insurance companies recognize that Sovaldi has great potential to help Hepatitis C sufferers but fear the cost of treatment for Medicaid, Medicare and private health insurance. Hepatitis C is more prevalent than people might think; 3.2 million Americans are infected with it. As a result, taxpayers could pay a multi-billion dollar bill for this drug.

The company offering Sovaldi acquired it from another company, which expected to sell the drug in the United States for $36,000 per treatment, according to publicly filed documents.

The jump in price led Sen. Ron Wyden and me to ask the company to explain its pricing decision. There's a public interest in learning more about the calculation.

Innovative drugs have the power to enhance and save lives. Drug manufacturers benefit from the U.S. patent system, which gives them years of exclusive market access for their ingenuity and act as an inducement to continue developing beneficial products. The Medicare prescription drug benefit is built on private market competition to drive down drug costs. When there's a sole source manufacturer of an innovative drug, consumers hope manufacturers use restraint in determining their pricing or that another competing drug comes along to drive down prices. The public filings involving Sovaldi raise questions about what made the pricing change so much and what effects the pricing could have on the competitive model that is the basis for the Medicare prescription drug benefit.

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