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Debate heats up over specialty drugs' cost

The cost of two new hepatitis C prescription drugs — $84,000 for a 12-week course of Sovaldi and $66,000 for Olysio — has made an already hot debate about medication costs even more heated.
By Dr. Stephen Prescott Published: July 6, 2014
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Late last year, the Food and Drug Administration approved a pair of new drugs to treat hepatitis C, a viral infection that can lead to cirrhosis and liver cancer. Patients exalted at the news, as the new medications (called Sovaldi and Olysio) can cure most cases of this life-threatening disease.

But when the drugs’ manufacturers announced the price tags for the new medications — $84,000 for a 12-week course of Sovaldi and $66,000 for Olysio — it poured gasoline on an already heated debate about prescription drug costs.

Until recently, the standard therapy for hepatitis C was a course of treatment lasting six to 12 months that involved weekly injections with interferon along with one or two antiviral drugs. Patients had to endure months of debilitating side effects from the interferon injections that included flu-like symptoms, anemia and depression. As a result, vast numbers failed to complete the therapy.

In clinical trials, the new drugs showed significantly higher cure rates than current treatment regimens. And for most patients, it’s a simple course of treatment: Just take the pills, which carry few side effects, once a day for 12 or 24 weeks.

Blockbuster success

Many doctors and insurers predicted that the prohibitive cost of the drugs would make their widespread use impossible. But when the drugs hit the market, both proved immediate blockbusters.

In the first quarter of 2014, Olysio sales yielded $354 million for Johnson & Johnson. Sovaldi brought in $2.3 billion for Gilead Sciences, shattering quarterly and even annual sales records for a new drug.

The new hepatitis C medications are but the latest example of the emergence of so-called specialty drugs: costly medications used to treat challenging medical conditions. Not surprisingly, these high-priced therapeutics represent the fastest-growing sector of the pharmaceutical industry.

At the Oklahoma Medical Research Foundation, we’re already seeing the bottom-line impact of specialty drugs on our health-care costs.

Last year, in a self-insured health plan that covers approximately 700 lives (OMRF employees and their family members), fewer than five people accounted for more than 20 percent of OMRF’s total pharmacy expenses. The reason? Those individuals suffer from chronic conditions for which the standard of care included costly medications administered on a regular basis.

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