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”

Bloomberg Businessweek (Europe) - - Contents - −Ke­taki Gokhale, with Caro­line Chen and Doni Bloom­field

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.

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