How Does a Life-Saving Drug That Costs $250 to Make End Up With a $94,500 Price Tag?

The deadly hepatitis C virus can be cured. But it’ll cost you – dearly.

Matt Curtis, VOCAL New York

It’s the most common viral disease in the world, affecting 3.5 million Americans. It’s the leading cause of serious liver disease, including cirrhosis, cancer, and the need for transplantation. It kills more people nationwide than AIDS. And now for the good news: since late 2013, hepatitis C can be reliably and quickly cured by a once-a-day pill regimen — with few side effects.

But there’s a big catch.

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Activists with VOCAL New York stand up against price gouging for life saving medications.

The cure has been such a breakthrough that drug companies have set prices in the stratosphere. That’s not really hyperbole: The most well-known example, Gilead Science’s industry leading combination drug, called Harvoni, comes with a list price of $94,500 for a single 12 week course of treatment. Independent pharmaceutical researchers have estimated the cost of production to be between $100 and $250 per person treated.

Such gouging means people with hepatitis C are suffering, when they shouldn’t be. Forget health care insurance relief; providers feeling a serious pinch on their budgets have restricted access only to people who already have advanced liver disease. Maria Reyes, of New York City, is beside herself with the fear of needing to get worse in order to get better.   

“I’ve tried to get treatment three times in the past year, and every time I’ve been denied because they say I’m not sick enough yet,” says the 54-year-old grandmother who is experiencing weight loss and fatigue – common symptoms of liver disease – and that her doctors and pharmacists all agree she needs treatment. “Are they just waiting for me to die? I have a family…I want to live a long life for them.”

Denying care won’t save insurers money. People who are cured only after developing advanced disease may have lifelong symptoms and be at higher risk for liver cancer. Younger people without advanced disease are the ones most likely to transmit the virus to others; not curing them misses a crucial opportunity to use treatment as prevention.

Meanwhile, the price hepatitis C treatment is wrecking healthcare financing nationwide while Big Pharma and their investors rake in cash. Gilead alone has had at least $20 billion in revenue from their hepatitis C drugs to date. While this has attracted widespread criticism, an investigation by the U.S. Senate Finance Committee, and the recent threat of a lawsuit by the Massachusetts Attorney General, Gilead knows what they’re doing: As one company official stated, “Let’s hold our position whatever competitors do or whatever the headlines.”

The activist group Hedge Clippers documented the link between predatory drug pricing, rapacious hedge fund profit seeking, and the impact on people’s health in a recent report. Their researchers found that hedge fund managers have pounced at the opportunity, increasing their holdings of Gilead by a factor of twelve within a year of FDA approval of the new hepatitis C drugs. This nearly one billion dollar investment helped drive the value of Gilead stock up more than 80%, rewarding hedge fund managers and creating a feedback loop that lines corporate pockets while tightly rationing lifesaving healthcare from those who need it most.

Patients aren’t sitting back, though. Last week Maria Reyes joined more than 100 people with hepatitis C outside New York Governor Andrew Cuomo’s office to demand state action to pressure the pharmaceutical industry to reduce prices while making it easier for people on public insurance, like Medicaid and Medicare, to get treated. Activists like her are the wedge driving cracks in Gilead’s business model, but it will require much more attention from the public and government to make treatment available to all.


Matt Curtis is Policy Director at VOCAL New York, a grassroots community organizing group that works to end the war on drugs, the HIV and hepatitis epidemics, mass incarceration and homelessness.