Healey: Hep C drug pricing might be 'unfair trade practice'
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Attorney General Maura Healey has questioned the legality of extremely high drug prices.
Referencing a relatively new hepatitis C drug that costs $84,000 for a full course of treatment, Attorney General Maura Healey on Wednesday addressed biotechnology industry officials, calling for drug prices that make health care accessible to those who need it.
Speaking at the Massachusetts Biotechnology Council's policy breakfast, Healey said that a balance must be found in drug pricing to allow risk-taking pharmaceutical companies to "rightly reap their financial rewards" while still getting medications to patients.
She mentioned the hepatitis C treatment Sovaldi, which she said reached around 3 percent of patients who needed it at a time when rates of the disease were rising.
"Unfortunately, the costs of treatment means that patients who need the drug the most do not have a means to access the medications, because of the cost," Healey said. "Now, I'll tell you that people in this state -- and I'll venture to say across this country -- are going to need access to this treatment more than ever because, unfortunately in no small part due to the heroin crisis, the opioid crisis, we have seen hep C rates rise across this state. It's scary. It's really scary. It's rapidly spreading."
Healey sent a letter last week to Gilead Sciences, the pharmaceutical company behind the drug, urging officials there to reconsider their pricing structure. Sovaldi costs $1,000 per pill in the United States, and roughly $10 in Egypt and $4 in India, Healey wrote in the letter.
"As a threshold matter, my office is considering whether Gilead's pricing strategy with respect to Sovaldi and Harvoni may constitute an unfair trade practice in violation of Massachusetts law," Healey wrote.
Healey told reporters after her speech that Gilead acknowledged receiving the letter and that representatives would be meeting with her office.
"We agree with the Attorney General about the importance of helping all HCV patients - and that the advent of safe, effective regimens means we can now consider the possibility of eradicating the disease," Gilead spokeswoman Amy Flood said in an email Wednesday. "We look forward to working with the Attorney General's office to address questions and concerns and ensure a mutual understanding of the work we are doing to deliver a cure for HCV to as many patients as possible in Massachusetts and around the world."
Pharmaceutical spending has been cited as one of the main drivers of health care spending growth in Massachusetts. A recent cost trends report from the Health Policy Commission noted a 13 percent spike in per capita pharmacy spending in the state from 2013 to 2014.
Asked if her office would consider taking regulatory action around drug pricing, Healey said, "Right now, we're reviewing this."
"This is a unique situation when it comes to hepatitis C," Healey said. "We've got an infectious disease, we've got a cure, yet rates are rising on the disease, all the while medications, treatment, is sitting on pharmacy shelves. We need to fix this."
Massachusetts Association of Health Plans president Lora Pellegrini said that while the price of Sovaldi has garnered attention, that one drug "really is the tip of the iceberg." She said some new cholesterol drugs carry "a huge price tag," and that prices for some generic medications, which have typically remained flat, are also now rising.
"Prescription drug prices are having a very negative impact on our ability to control costs and meet the state's cost benchmark, so I think the action today by the attorney general is really important and sends a strong message to Gilead and other drug manufacturers that everyone has to participate in cost containment and no one industry gets a blank check," Pellegrini told the News Service.
MAHP says its commercial member plans spent around $103 million on hepatitis C treatments in 2014 and the first three quarters of 2015, while Medicaid managed care organizations and senior care options spent $139 million.
Healey, in her remarks to the biotechnology council, said that public conversation focuses on "skyrocketing sticker prices" for prescription drugs and more information should be made available about the various factors that go into setting prices.
The discussions, she said, should also involve details on the actual cost of the drug, any negotiated rebates, how prices are set, the cost of bringing the medication to market and what the drug saves consumers in other health care costs, such as avoided emergency room visits.
"Without this type of information, I think it's hard for consumers, policy makers, insurance companies and others to know whether the costs are too high, too low or just right," Healey said.
The attorney general also called for an "honest conversation" about the opioid addiction crisis facing the state, saying it cannot be addressed without looking at the prescribing practices in Massachusetts and across the country.
"We have a serious problem," Healey said. "This is unsustainable. We need strong action and we need it now."
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