Bloomberg Businessweek (Europe)
A $1,000 hep C pill in the U.S. is $4.29 and falling in India
▶▶Competition in India has brought rock-bottom prices for a drug costing $1,000 per pill in the U.S. ▶▶“It’s a race where one cannot say no—because then they’re going to lose the business”
According to the village elders swapping stories in a tailor’s shop behind the Sikh temple in Lande Rode, India, outsiders don’t want their daughters to marry the local boys, because most village residents are infected with “black jaundice”—what some Indians call hepatitis C. It’s so common in parts of Punjab state that the gossips might not be far off base in their assessment of the local infection rate.
But the prevalence of the debilitating disease, which can result in cirrhosis and liver cancer, may have left Lande Rode with something of an advantage. Drugmakers have made the town one of the unlikely theaters in a battle to grab market share for sofosbuvir, a miracle cure that Gilead Sciences sells in the U.S. under the name Sovaldi at a retail price of $1,000 a pill. Gilead in 2015 licensed 11 Indian companies to sell generic versions available for about 1 percent of that amount. In turn, those companies have sealed marketing deals with other local drugmakers. That’s sparked fierce competition that’s lowered the cost to patients further and spurred thousands to get tested for the malady.
Manufacturers “want more and more patients” and are willing to wheel and deal on price, says Nirmaljeet Malhi, a gastroenterologist at Apollo Hospitals in Ludhiana, about 200 kilometers (124 miles) from Lande Rode. If one drugmaker “agrees to it, the others will also have to. It’s a race where one cannot say no—because then they’re going to lose the business.”
The companies sponsor screening drives, hand out free test kits to hospitals, and offer bulk discounts on the medicine to entire villages. Sofosbuvir was cheap by most any standard when it hit the market in Punjab at $10 a pill in March. Since then the patient cost has kept dropping, to as low as $4.29, and doctors predict it will continue to fall.
That’s in stark contrast to the situation in the U.S., where Gilead set off a firestorm in 2013 by listing Sovaldi at $84,000 for a 12-week treatment regimen. The drug often wipes out an infection in just three months. Still, the cost sparked a backlash over high medicine prices. Dozens of state Medicaid plans limited access to the drug, and a U.S. Senate report chastised the company. Gilead, which has said it priced Sovaldi responsibly and thoughtfully, is giving insurers and bulk purchasers discounts.
Like others in the industry, Gilead arranges to make life-saving cures available in some parts of the world for far less than it does in the U.S.; laws in some countries and public pressure brought about so-called tiered pricing after expensive anti-HIV treatments became available in the 1990s, reducing deaths in rich countries but not poor ones. In exchange for a 7 percent cut of sales, Gilead gave companies including Mylan, Cipla, and Natco Pharma rights to make generics for distribution in 101 developing nations where hepatitis C is often untreated and the $1,000 cost of a single pill is more than locals might earn in a year. The company wants to “foster
competition in the marketplace” in low-income areas, according to Gilead spokesman Nathan Kaiser.
The discount pricing has made sofosbuvir widely available. “The market has become highly competitive in the last six months, with close to 20 companies launching their own” generic versions, says M.V. Ramana, executive vice president and head of branded markets at big Indian drugmaker Dr. Reddy’s Laboratories.
The rival sofosbuvir makers are aggressively expanding the customer base. Dr. Reddy’s, for example, set up a venture with lender Arogya Finance to offer patients no-interest loans for the medicine, and Abbott Laboratories worked with French medical equipment company Echosens to supply Indian hospitals with 13 ultrasound machines that determine the level of liver fibrosis, or hardening, without a biopsy—making diagnosis easier.
India’s cheap hep C treatment is also encouraging visits from patients from the U.S. and other countries where the drug is very expensive or rationed by national health systems. While there’s little Gilead can do to prevent medical tourism, it does require that generic sofosbuvir in India be issued under prescriptions written by physicians there and dispensed in the country.
As many as 150 million people have hepatitis C, including at least 12 million in India. It is usually transmitted by tainted medical equipment and dirty syringes. Some of the highest infection rates are in villages such as Lande Rode in Punjab’s cotton-growing Malwa belt, where 30 percent to 50 percent of the population might have the virus, says Gagandeep Goyal, a gastroenterologist at Global Healthcare, a hospital in Bathinda, Punjab’s fifth-largest city.
There are expenses beyond the drug itself. Villagers are encouraged to go to hospitals in cities for exams to gauge the amount of virus in the blood and the exact strain, and for scans to see the amount of liver scarring. At Malhi’s hospital, the charge for a liver scan is 3,500 rupees ($52.56). He says drugmakers might be persuaded to help defray these costs, too.
“If bulk treatment is required—say, in a village where 200 people are positive—they might give more favorable pricing to that village for complete treatment,” Malhi says. If he tests 20,000 people and finds 2,000 infected, he says he might be able to negotiate to get the cost of a 12-week course for a single person reduced by a third to $1,000. “Where in the U.S., you get one pill, here you get an entire treatment,” he says. “People in these villages can afford this—possibly everybody can.”
In Lande Rode, a cluster of concrete houses dotting dirt roads, farmer Baldev Singh reckons 80 percent of the village is infected. He was successfully treated with interferon injections in 2014, before the antiviral pill was available in poor countries. His wife, brother, and 16-year-old nephew have hepatitis C. The nephew is taking sofosbuvir, financed by a loan. But Singh hasn’t had his teenage sons tested yet— and his wife takes an Ayurvedic medicine whose ingredients include capers and wild chicory. Singh says he thinks her viral count is too low to warrant the expense of generic Sovaldi. “And anyway,” he says, “the price is supposed to come down a little more, right?”
The bottom line Generic versions of Gilead’s hepatitis C pill in India can be had for as little as $4.29, vs. $1,000 a pill for the branded U.S. drug.