tag:theconversation.com,2011:/uk/topics/sofosbuvir-13680/articlessofosbuvir – The Conversation2017-07-13T06:45:56Ztag:theconversation.com,2011:article/809612017-07-13T06:45:56Z2017-07-13T06:45:56ZGilead and the billion-dollar odyssey<figure><img src="https://images.theconversation.com/files/178009/original/file-20170713-9462-6z59kg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Despite global outrage at the cost of its Hepatitis C cure, Gilead reaps huge profits – aided by Australian taxpayer subsidies.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/nickstcharles/12492466274">Nick St Charles/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Like its Big Pharma peers, Gilead Sciences enjoys lavish taxpayer subsidies via the Pharmaceutical Benefits Scheme (PBS). It also makes large profits, but it pays little in the way of income tax in this country. So, like its peers, Gilead is doubly subsidised by Australian taxpayers: low income tax, high PBS.</p>
<p>Yet this US drug company has surpassed its peers in the pursuit of corporate welfare. It has set prices so high for <a href="https://theconversation.com/weekly-dose-sofosbuvir-whats-the-price-of-a-hepatitis-c-cure-63208">Sofosbuvir</a>, its “blockbuster” treatment for hepatitis C, that very few people in the world can afford to pay for the drug without monumental government subsidies.</p>
<p>Global Justice Now, a UK activist group, estimates somebody dies of hepatitis C every 79 seconds; in that time Gilead makes US$26,068 selling Sofosbuvir. More than 1.4 million people have died since Gilead took its hep C cure to market in 2014.</p>
<p>But what a cure it is. The success rate is 95%. Sufferers don’t need to take the drug for their whole life, just for a 12-week course of pills. This drug is capable of eradicating a disease that kills nearly 500,000 people a year and infects more than 150 million people worldwide … were it not for the money.</p>
<p>Only wealthy patients and wealthy countries like Australia have the wherewithal to pay for it. And Australia, with its “soft-touch” PBS scheme which is unsustainable and skewed heavily in favour of drug companies, is a prime target for Gilead.</p>
<h2>The high cost of a cure</h2>
<p>The Australian government forked out A$1 billion in just four months last year to subsidise hep C cures Ledipasvir and Sofosbuvir. These were the two most costly items on the PBS. This A$1 billion paid for just 43,000 prescriptions, prescriptions that would have cost the customer A$1,000 a pill had taxpayers not picked up the bill.</p>
<p>The extreme price of Gilead’s hep C cure led Dr John Freeman to set up a buyers’ club, <a href="https://fixhepc.com.au/">FixHepC</a>, so his patients could import a generic hep C treatment from Asia and pay $US2,000 rather than the $US84,000 Gilead was charging for the treatment in America.</p>
<p>Freeman’s son, Dr James Freeman, said this week he was apprehensive at first about importing a far cheaper generic from Asia but felt, as a doctor, he first owed a duty to heal his patients. It was the patients who imported the drug and the results were stunning, at a fraction of the price.</p>
<p>Patients of the Freemans were able get around patent laws on a personal use basis. Gilead, which has a 20-year IP stranglehold on the drug, is not happy about generic interlopers in its hep C market – though the company declined to respond to questions for this column.</p>
<h2>A takeover windfall</h2>
<p>The rationale for keeping drug prices high while allowing those who can’t afford to pay to die is primarily one of risk, capital and markets. Unless there is a significant financial reward for developing pharmaceuticals, companies will not invest and therefore cures will not be found. But where is the line to be drawn between profits and peoples’ lives?</p>
<p>James Freeman says, in the case of Gilead and its hep C drug, Gilead has overstepped that line. It didn’t develop the drugs, it acquired them in a takeover bid and then jacked up the prices.</p>
<p>Typically, a new drug costs between $US90 million and $US300 million to develop. Instead of developing the drug itself, Gilead acquired Nasdaq-listed stock Pharmasset for $US11 billion. It was framed as a “high-risk” acquisition at the time as Pharmasset had steered its drug through Phase II clinical trials but was yet to get approval from the US Food and Drug Administration.</p>
<p>“Patent laws are supposed to help incentivise research and development by ensuring profits for new drugs. But Gilead did not invent Sofosbuvir,” wrote Freeman in a paper on the hep C cure. “The research for the drug was partly funded by American taxpayers and the investment that Gilead made in buying the rights for the drug was more than made back in their first year of its sale. So most of the money you pay for the drug now goes to marketing and to paying dividends to the shareholders gathering in California right now.”</p>
<p>Gilead got Phase III trials done, had the drug approved, and the rest is history.</p>
<p>“In the third quarter of 2013, Gilead had US$2.36 billion in cash and convertibles on its balance sheet,” says James Freeman. “Now they have US$32 billion. They only have one blockbuster so they have US$30 billion in cash profit.”</p>
<h2>Huge profits, little transparency</h2>
<p>This sort of astronomical profit – a profit heavily subsidised by Australian taxpayers via the PBS – suggest Gilead should be accountable for its corporate activities in this country.</p>
<p>Like many Big Pharma multinationals that operate in Australia, however, Gilead produces only “Special Purpose” financial statements, a statutory report that relies on the assumption that there is only one stakeholder interested in Gilead’s financials.</p>
<p>This is wrong. It is a narrow and arguably erroneous view of accounting standards; creditors, taxpayers, patients, myriad parties are interested in Gilead’s financial statements.</p>
<p>The reason for producing Special Purpose reports is reduced disclosure, secrecy. There is zero disclosure, for instance, of Gilead’s related party transactions with its parent company in Ireland – likely there are IP or service charges to Ireland – or with the ultimate parent company in the US. The accounts fail to provide a “true and fair” picture of Gilead’s financial position as required by accounting standards and the Corporations Act.</p>
<p>An analysis of its financial statements shows that although Gilead booked A$2.3 billion in cash receipts from its customers in Australia last year, it paid just A$2.8 million in income tax over the past six years. Tax as a percentage of revenue is 0.82% – less than 1% of sales – after billion-dollar subsidies via the PBS.</p>
<p>Further, deep in the intestines of the notes to the financial statements is a provision to pay the Department of Health A$1 billion. Never mind that this provision does not show up in “provisions” on the balance sheet – we have come to expect this sort of lousy accounting – but there is no explanation of the group’s arrangements with the government.</p>
<p>On the face of it, Gilead owes the government A$1 billion but does not deem that the government is entitled to an interest in its financial statements, ergo Special Purpose reporting.</p>
<p>Gilead’s revenue last year was A$483 million – it had soared from $186 million the year before – but it booked A$2.3 billion of cash receipts from Australian customers. How is it that cash of A$2.3 billion amounts to five times disclosed revenue? No doubt there are complex rebate arrangements, though these are not explained by Gilead or its auditor EY.</p>
<p>Neither is the government’s reporting of its PBS arrangements adequate. Again, cloaked in secrecy. The PBS spend has almost doubled in a decade from A$6 billion to A$11.5 billion and is headed higher. The long-term cost of health care appears crushing and a first step to averting this impending crisis in funding is transparency and disclosure.</p>
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<a href="https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=458&fit=crop&dpr=1 600w, https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=458&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=458&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=576&fit=crop&dpr=1 754w, https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=576&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/178006/original/file-20170713-11517-vyrse4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=576&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Gilead revenue, tax paid and cash receipts, and government PBS spending (in A$ million – note break in Y axis)</span>
<span class="attribution"><span class="source">David Balcombe/ASIC company extract and www.pbs.gov.au</span></span>
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</figure>
<p>As for Gilead’s social licence to operate in Australia, it hangs by a thread. This is a company that should be deemed an agent of its foreign parent and taxed as such. </p>
<p>The case of Gilead and Sofosbuvir is far from unique, says Dr James Freeman. “Across the world, hundreds of millions of people are priced out of accessing the medicines they need by big pharmaceutical companies with monopolies over essential medicines.</p>
<p>"It’s estimated that 10 million people across the global south died from AIDS-related diseases while big drug companies tried to block the production of ‘generic’ versions of drugs that could be used to cheaply treat patients. In the UK the annual NHS drug spending has gone up by £3.8 billion in the last five years and the NHS increasingly has to reject or ration new drugs because of their costs, leaving patients without access to new treatments.”</p>
<hr>
<p><em>This column, co-published by The Conversation with <a href="http://www.michaelwest.com.au/">michaelwest.com.au</a>, is part of the <a href="https://theconversation.com/au/topics/democracy-futures">Democracy Futures</a> series, a <a href="http://sydneydemocracynetwork.org/democracy-futures/">joint global initiative</a> between The Conversation and the <a href="http://sydneydemocracynetwork.org/">Sydney Democracy Network</a>. The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.</em></p><img src="https://counter.theconversation.com/content/80961/count.gif" alt="The Conversation" width="1" height="1" />
<h4 class="border">Disclosure</h4><p class="fine-print"><em><span>Michael West has been paid by GetUp! and the Tax Justice Network to conduct an analysis of the tax affairs of 20 multinational companies.</span></em></p>How much can a multinational take before its social licence to operate in this country expires? How much corporate welfare is too much?Michael West, Adjunct Associate Professor, School of Social and Political Sciences, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/632082016-08-03T06:07:46Z2016-08-03T06:07:46ZWeekly Dose: sofosbuvir – what’s the price of a hepatitis C cure?<figure><img src="https://images.theconversation.com/files/132892/original/image-20160803-7758-1h23qib.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">At over $1,300 a pill, a cure for hepatitis C comes at a high price. </span> <span class="attribution"><span class="source">from www.shutterstock.com.au</span></span></figcaption></figure><p>Sofosbuvir is one of a number of new direct-acting antiviral drugs revolutionising the care of people living with hepatitis C. Combinations of two or three hepatitis C virus direct-acting antiviral drugs taken for 8-24 weeks can cure more than 90% of people treated. However, this breakthrough in clinical medicine comes at a cost. </p>
<p>Globally, it is estimated <a href="http://www.who.int/mediacentre/factsheets/fs164/en/">more than 80 million people</a> are infected with hepatitis C. Each year, 700,000 people die from complications of the disease. In Australia, <a href="https://kirby.unsw.edu.au/sites/default/files/hiv/resources/ASR2015.pdf">an estimated 230,000 people</a> are living with chronic hepatitis C. </p>
<p>Complications of hepatitis C include cirrhosis, liver failure and liver cancer. Ensuring broad access to these ground-breaking therapies, including sofosbuvir, is vital to reduce liver deaths and prevent new infections.</p>
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<a href="https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=728&fit=crop&dpr=1 600w, https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=728&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=728&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=915&fit=crop&dpr=1 754w, https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=915&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/132895/original/image-20160803-7769-1g19nmp.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=915&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<h2>How does it work?</h2>
<p>The direct-acting antiviral drugs work by blocking the action of specific proteins or enzymes in the hepatitis C virus, which are essential for the virus to replicate and infect liver cells. Sofosbuvir blocks the action of an enzyme called “NS5B RNA-dependent RNA polymerase”. </p>
<p>While some direct-acting antiviral drugs work only on specific types or strains of hepatitis C virus, sofosbuvir is active against all six major strains of hepatitis C. Sofosbuvir has a number of other features that make it ideal for widespread use in the quest for hepatitis C elimination. These include once-daily oral dosing, no need to take with food and very few side effects. </p>
<p>In a major therapeutic advance, on June 28, 2016, the US Food and Drug Administration (FDA) approved a combination of sofosbuvir with another direct-acting antiviral velpatasvir (Epclusa®). Velpatasvir acts by blocking a different protein, the “NS5A” enzyme. Regardless of hepatitis C strain, this “one pill, once a day” treatment for 12 weeks has the potential to cure more than 95% of people infected with hepatitis C, including people with cirrhosis. </p>
<p>Sofosbuvir is very well tolerated. The most common side effects seen with the combination sofosbuvir/ledipasvir (another direct-acting antiviral that blocks the “NS5A” enzyme) are fatigue and headache. </p>
<h2>Availability</h2>
<p>Sofosbuvir was approved for treatment of chronic hepatitis C (as one part of combination therapy) by the US FDA in December 2013 and the Australian Therapeutic Goods Administration in August 2014.</p>
<p>In 2016, Australia provided broad, government-subsidised access to these new treatments for all people living with chronic hepatitis C. The initial enthusiasm for the treatment has been astounding. <a href="https://kirby.unsw.edu.au/sites/default/files/hiv/attachment/Kirby_HepC_Newsletter_Issue3_2.pdf">An estimated 22,470 Australians</a> started hepatitis C treatment between March and June 2016. </p>
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<a href="https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/132897/original/image-20160803-7746-1lg6c31.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Although expensive, these new treatments will be cost-effective in the long term with the ability to prevent both liver-related deaths and new hepatitis C infections.</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
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<p>In an effort to expand access to treatment in Australia, hepatitis C virus direct-acting antivirals can be prescribed by both specialists (gastroenterologists, hepatologists or infectious diseases physicians) and general practitioners, and can be dispensed by both community and hospital pharmacies. </p>
<h2>Cost</h2>
<p>Pharmaceutical company Gilead launched sofosbuvir on December 6, 2013, for the wholesale cost of US$1,000 (A$1,317) per 400mg tablet. The cost for the sofosbuvir component of a 12-week treatment course is US$84,000 (with the total cost of treatment dependent on the other medication or medications used in combination with sofosbuvir). </p>
<p>In 2014, sofosbuvir generated US$10.3 billion in sales. While the high cost of treatment has come under scrutiny, Gilead’s executives said “price is the wrong discussion … value should be the subject”. Drug companies appear well aware such innovative treatments for hepatitis C will be well sought after regardless of cost. </p>
<p>With time and industry competition, drug costs have fallen marginally. Sofosbuvir combined with ledipasvir is US$94,500 (A$124,000) and the recently launched sofosbuvir combined with velpatasvir is US$64,700 (A$85,000) for a 12-week course. </p>
<p>In Australia, sofosbuvir is available through the Pharmaceutical Benefits Scheme for A$38.30 a month, or A$6.20 if you have a concession card. </p>
<h2>Controversies</h2>
<p>The high cost of sofosbuvir has been a major barrier to widespread use and treatment of people with chronic hepatitis C infection, even in high-income countries. The high cost has given rise to community dissent with lobbying from large international organisations, including Medecins San Frontieres and the Joint United Nations Program on HIV/AIDS (UNAIDS), to secure access for low- and middle-income countries. </p>
<p>Gilead has entered into licensing deals with several manufacturers in India to provide generic sofosbuvir to more than 100 low- and middle-income countries. However, these generic deals exclude a number of middle-income countries with very high hepatitis C burdens, leaving millions of people without access to this drug. </p>
<p>Facilitating global access to safe, effective direct-acting antivirals will herald a revolution in hepatitis C management. Elimination of hepatitis C as a major global public health issue is possible, if we have the political and financial will to expand access to this therapy to all populations with hepatitis C. </p>
<p>Although expensive, these new treatments will be cost-effective in the long term with the ability to prevent both liver-related deaths and new hepatitis C infections. Central to unlocking the public health potential of sofobuvir and other hepatitis C direct-acting antiviral drugs is liberal access to hepatitis C care and treatment.</p><img src="https://counter.theconversation.com/content/63208/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Greg Dore receives funding from Gilead, Abbvie, Merck, and Bristol-Myers Squibb. </span></em></p><p class="fine-print"><em><span>Marianne Martinello does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Combinations of two or three hepatitis C virus direct-acting antiviral drugs taken for 8-24 weeks can cure more than 90% of people treated.Gregory Dore, Professor, UNSW SydneyMarianne Martinello, Research associate, The Kirby Institute, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/336252014-11-25T04:23:33Z2014-11-25T04:23:33ZWhat price a life? Hepatitis C drug out of reach for millions<figure><img src="https://images.theconversation.com/files/65406/original/image-20141125-19627-1g2wbv2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The proposed Australian price for Sovaldi has not been disclosed, but in the United States a three-month course of treatment costs US$84,000.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/stuandgravy/5838929">Stuart Hamilton/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>It’s twice as common as <a href="http://www.aihw.gov.au/how-common-is-diabetes/">type 1 diabetes</a>. It <a href="https://kirby.unsw.edu.au/sites/default/files/hiv/resources/ASR2014.pdf">kills more</a> Australians than <a href="http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2814%2960844-8/fulltext">HIV</a>. <a href="https://kirby.unsw.edu.au/sites/default/files/hiv/resources/ASR2014.pdf">One in every 100 of us</a> lives with hepatitis C, but the disease receives little attention. Worldwide, <a href="http://www.who.int/csr/disease/hepatitis/GHP_Framework_En.pdf?ua=1">around 150 million people</a> are chronically infected and more than 350,000 lives are lost each year. </p>
<p>Nonetheless, earlier this year, Australia’s Pharmaceutical Benefits Advisory Committee (PBAC) <a href="http://www.pbs.gov.au/industry/listing/elements/pbac-meetings/psd/2014-07/sofosbuvir-psd-07-2014.pdf">declined to subsidise</a> a new curative drug for hepatitis C called sofosbuvir (Sovaldi). The PBAC’s reason for its refusal was the drug’s <a href="http://www.pbs.gov.au/industry/listing/elements/pbac-meetings/pbac-outcomes/2014-07/first-time-decisions-not-recommend.docx">potential impact on the health budget</a>. </p>
<p>The proposed Australian price for Sovaldi has not been disclosed, but in the United States a three-month course of treatment <a href="http://www.gilead.com/news/press-releases/2013/12/us-food-and-drug-administration-approves-gileads-sovaldi-sofosbuvir-for-the-treatment-of-chronic-hepatitis-c">costs US$84,000</a>. The PBAC’s decision reflects a concern felt around the world: how can we treat so many people at such a high price? </p>
<h2>A steep price</h2>
<p>The current situation with hepatitis C recalls the fight over a decade ago for HIV drugs to be made affordable. The first drugs for HIV were approved in the United States in the late 1980s, and <a href="http://www.avert.org/antiretroviral-drug-prices.htm">combination highly active anti-retroviral therapy (HAART)</a> first became available in 1996. </p>
<p>The price of these patented medications prevented most people in heavily affected African countries from getting treatment until after 2001, when an Indian manufacturer <a href="http://www.msf.org/sites/msf.org/files/doha_11-2001.pdf">made generic versions available</a>. This brought the price down from over US$10,000 per patient per year to just a few hundred dollars. </p>
<p><a href="http://www.unaids.org/en/resources/documents/2014/HIV_estimates_with_uncertainty_bounds_1990-2013">Almost six million people died</a> of HIV in sub-Saharan Africa in the intervening years; a great many of these deaths would have been prevented with affordable drugs. </p>
<p>Now the first chapter of that story seems to be repeating itself. Several life-saving medicines for hepatitis C have been developed, but they are priced out of reach. International trade agreements, as they stand, <a href="http://www.msf.org/sites/msf.org/files/doha_11-2001.pdf">will prevent universal access</a> to affordable generic versions of the drugs. </p>
<p>Many people with hepatitis C live in middle-income countries, such as Russia and China. While they are wealthier than the countries devastated by HIV, these nations still cannot afford the new cures at current prices. </p>
<p>Patients must take at least two drugs in combination. A single three-month course of sofosbuvir with its partner drug ledipasvir is currently <a href="http://www.hepatitisc.uw.edu/page/treatment/drugs/ledipasvir-sofosbuvir">priced at US$94,000</a>. This is over 15 times the <a href="https://data.un.org/CountryProfile.aspx?crName=CHINA">average annual income in China</a>. </p>
<p>The <a href="http://www.hepatitiswa.com.au/treatments/hepatitis-c-treatment-and-side-effects.html">traditional treatment</a> for hepatitis C takes at least six months, can cause severe side effects and is not always effective. </p>
<p>Treatment uptake in Australia has always been low. Out of the almost quarter of a million Australians living with the virus, over 30% are believed to have already developed moderate or severe liver damage, but <a href="https://kirby.unsw.edu.au/sites/default/files/hiv/resources/ASR2014.pdf">fewer than 2%</a> are treated each year. </p>
<p>This is one of the reasons liver cancer is the fastest-increasing cause of <a href="https://www.mja.com.au/journal/2012/197/9/liver-cancer-fastest-increasing-cause-cancer-death-australians">cancer-related death among Australians</a>.</p>
<p>Australia has recently approved three “first-generation” new drugs. Each of these can be added to traditional treatment to improve its efficacy and reduce the time required. But, right now, these drugs are available only to people with the <a href="http://www.hepatitisaustralia.com/treatment-for-hep-c/">hardest-to-treat</a> form of the virus. Side effects remain a significant concern. </p>
<h2>Leaving people behind</h2>
<p>With shorter treatment duration, fewer side effects and higher efficacy, combination treatments with “second generation” drugs such as sofosbuvir should make treatment possible for much larger numbers of people. </p>
<p>But if the drug had been approved in Australia at the proposed price, the government would likely have considered it necessary to restrict access. If even 5% of the 230,000 Australians living with hepatitis C were to receive combined treatment with sofosbuvir and ledipasvir at US$94,000 per course, the drug cost alone would exceed US$1.1 billion. </p>
<p>The outlook for heavily affected middle-income countries is even more sobering. With larger populations, higher prevalence and fewer resources than Australia, neither their governments nor their citizens can pay current prices. </p>
<p>Sofosbuvir’s manufacturer, Gilead Sciences, has signed a deal with India to allow <a href="http://www.gilead.com/news/press-releases/2014/9/gilead-announces-generic-licensing-agreements-to-increase-access-to-hepatitis-c-treatments-in-developing-countries">limited manufacturing of generic versions</a> of the drugs for many low-income countries. This includes some heavily affected countries such as Egypt. </p>
<p>While this is very welcome, as Médecins Sans Frontières (Doctors Without Borders) has pointed out, a huge number of people with hepatitis C <a href="http://www.msfaccess.org/content/msf-access-campaign-response-gilead%E2%80%99s-deal-generic-companies-sofosbuvir-and-ledipasvir">live in countries that have been left out</a>, meaning they have little hope of accessing the drugs. </p>
<p>Researchers at the University of Liverpool have estimated that an entire three-month course of sofosbuvir <a href="http://cid.oxfordjournals.org/content/early/2014/02/13/cid.ciu012.full">can be produced for under US$140</a>. </p>
<h2>Perils of patent protection</h2>
<p>The argument for patent protection for high drug prices is usually that companies need to recoup research costs, which may sound reasonable. But sofobuvir’s manufacturers did not develop this blockbuster drug themselves.</p>
<p>Gilead purchased the drug’s original developer <a href="http://www.forbes.com/sites/wendydiller/2014/10/15/is-specialty-pharma-pricing-at-a-tipping-point/">for US$11.2 billion in 2011</a>. In just the first nine months of this year, <a href="http://www.gilead.com/news/press-releases/2014/10/gilead-sciences-announces-third-quarter-2014-financial-results">the drug’s sales totalled US$8.6 billion</a>. This suggests the company is likely to recoup the cost of the acquisition by Christmas 2014. </p>
<p>The first patents for sofosbuvir are not due to expire for <a href="http://www.drugs.com/availability/generic-sovaldi.html">at least 15 years</a>. Long after they have covered the cost of the drug’s development and that of Gilead’s speculative purchase of the right to produce it, it appears patients and taxpayers will be expected to continue paying a huge price for this life-saving medicine. </p>
<p>More than a decade after the first victories in the battle for affordable HIV drugs, the gulf between the priorities of large pharmaceutical companies and those of governments, affected communities and the general public is again highlighted. </p>
<p>The new treatments for hepatitis C should herald a revolution; a deadly disease can now be cured quickly and painlessly for a few hundred dollars. But unless affordable treatments are made universally available, millions of people in urgent need will be left behind. </p>
<p>Nobody who recognises the human cost of hepatitis C could question the value of these new drugs. But even in wealthy countries such as Australia, we are being forced to question their price tags.</p><img src="https://counter.theconversation.com/content/33625/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Benjamin Cowie receives research funding from the Australian Government Department of Health and Melbourne Health. He is a Vice President of the Australasian Society for HIV Medicine.</span></em></p><p class="fine-print"><em><span>Kathryn Snow does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s twice as common as type 1 diabetes. It kills more Australians than HIV. One in every 100 of us lives with hepatitis C, but the disease receives little attention. Worldwide, around 150 million people…Kathryn Snow, Researcher in Epidemiology, The University of MelbourneBenjamin Cowie, Epidemiologist & Physician, Doherty Institute for Infection and Immunity, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.