Hep C Drugs: Prices to Plummet, but Not in US

The $1,000 a pill cost of the new hepatitis C drugs has put them out of reach for many people in the US, and strained Medicaid budgets in many states. But people in Egypt are getting some of these drugs for $8 a pill.

Why is that?

Using the same strategy that earlier led to a dramatic drop in the cost of AIDS drugs in some parts of the world, major drug companies are starting to make cheap versions of their blockbuster direct-acting antivirals (DAAs) for hepatitis C available to people in poor and many middle- income nations. It is a proven way to deflect criticism about prices, do a lot of good, and still rake in the profits back home.

The nations that get the price breaks are ones where the pharma companies know they wouldn’t be able to sell the drugs at US prices. “These are countries where the money just isn’t there,” said Bob Kirby, director of corporate healthcare at Fitch Ratings in Chicago. “To some degree US payers subsidize [drug] costs for the rest of the world.”

Last month Bristol-Myers Squibb agreed to allow the United Nations-backed Medicines Patent Pool to distribute licenses for the generic manufacture of its DAA for HCV, daclatasvir (Daklinza). The non-profit organization, based in Geneva, Switzerland, played a similar role in finding generic manufacturers for HIV drugs years ago. The newest Bristol-Myers/MPP agreement covers 112 low-to-middle income countries around the world—though Egypt is not among them, a Bristol-Myers spokesman said.

Among those 112 countries are 76 middle-income countries, according to the MPP. The high price of the HCV drugs puts them out of reach of these people as well. Gilead Sciences last year licensed 11 generic manufacturers to make and sell its DAA sofosbuvir (Sovaldi) in 101 nations, including Egypt. But don’t expect big price reductions any time soon in the US. That did not happen when pharma cut the price of HIV drugs in poor nations, and likely will not with the new DAAs, Fitch's Kirby said.

There are two basic ways the companies are making the HCV drugs affordable in these nations: giving their patents away to generic drug manufacturers, drastically dropping the wholesale price, or both. The companies can go through the MPP, which does not permit the companies to get sales royalties, or they can negotiate directly with the nations in need.

As to the companies’ motivation, “Mostly it’s because of public opinion, but they want to do some good too,” Kirby said. The public relations/philanthropic strategy worked for pharma with HIV drugs. Reducing the price of antiretrovirals for HIV blunted criticism that the companies were in effect withholding life-saving treatment and contributing to the spread of disease by pricing their drugs too high.

At the same time, both for HIV and HCV, these companies have little to lose—compared to what would happen if they cut prices across the board.

At Bristol-Myers, the spokesman agreed the company was not undercutting potential sales in countries getting the price breaks. “These are markets where BMS has chosen not to commercialize Daklinza/daclatasvir at this time,” he said, but instead is allowing royalty-free licensing through the MPP. The company worked with MPP in 2013 to give away its patents for that HIV drug atazanavir.

If globally available generics showed up in large quantities in the US, that could hurt the pharma companies. But drug diversion has not been a significant problem, said Kirby. “It’s always somewhat of a concern but the risk is not huge,” he said. Mail order would be the easier route, but consumers are too wary of getting counterfeited drugs or ones of poor quality, he added. When pharma companies gave away patents for HIV drugs and/or dropped prices in “non-marketable”countries, the reduced prices saved lives and curbed the spread of disease, but did not interfere with US prices and pharma profits.

In Africa in 2000, the annual price of antiretroviral drugs for HIV infection was about $10,000 per patient. By 2013, according to a report from Medicins Sans Frontieres, people in poor countries could get it at a cost of $100 a year. As a result, about seven million people in Africa were being treated with ARVs, the group said.

According to a National Institutes of Health analysis, US prices have not dropped just because global prices have. The 2015 monthly cost of ARVs in the US ranged from $2,950 f or a one-pill combination of dolutegravir/abacavir/lamivudine to $360 for generic zidovudine.

The potential for cutting pharma company margins is even higher with the DAAs for HCV. That cost is now around $1,000 per daily pill or about $30,000 a month for drug regimens that can last as long as 12 weeks. There are about a dozen companies making patented DAAs for HCV. With 150 million people infected, the global need for these drugs is acute, and was the topic of a special session at an international meeting in November, the 2015 Liver Meeting (AASLD) held in San Francisco, CA.

Entitled “Global Challenges and Advances in Hepatitis C Treatment” the seminar soon evolved into a shared gripe session over the unaffordable costs many nations face in getting DAAS to people who need them.

Among the points made:

• The cost is often harder on middle-income nations that are less likely to benefit from price breaks negotiated with pharma companies or subsidies from outside organizations.
• In places where generics are being licensed, quality is unregulated, leading the World Health Organization to step in to come up with standards and tests.
• Puerto Rico has a particular problem, with a high prevalence of HCV infection, but with its Medicaid program unwilling or unable to cover the cost of DAAs.
• Some countries, notably Egypt, have ambitious programs underway to get the drugs to their residents.
• The US is far ahead of just about all the nations and global regions in getting DAAs to those who need them.

The need for the drugs is most severe in the Asia-Pacific region, said Osamu Yokosuka, MD, of Chiba, Japan. There are between 49 million and 64 million people with hepatitis C living in that region, though good statistics are difficult to come by.

HCV hotspots include Egypt, where about 14.7% of the populace is infected, or 13 million people, and Mongolia, where over 15% of the population or 500,000 people have the virus.

Access to DAAs varies, with interferon remaining the standard of care in most places. DAAs are available in Australia, India, Taiwan and Turkey. “Unfortunately they are very expensive,” said Ayman Yosry, MD. Turkey launched a government program to get DAAs to those who need them and though 1.138 million people registered to take part, only 40% showed up for treatment. So far 134,000 patients have started treatment and 86% have shown a sustained viral response. “We get a lot of dropouts,” he said.

Still the nation is aiming to get treatment to all by 2030. That would mean a 77% drop in liver cancer mortality he said. “The challenge is getting the drugs at an affordable price and convincing government to pay,” Yosry said

The picture in the Dominican Republic is bright, said Fernando Contreras, MD, addressing the issue of access to DAAs in Latin America.

But “robust data” on infection rates is sorely lacking. Much work needs to be done in healthcare-acquired infections as well, he said, which are blamed for much of the spread of the virus.

He said the Dominican Republic successfully negotiated for major discounts with pharma companies. That is not true for all of Latin America, he said. He urged others to “sit down with pharma” and work to get better prices. Political activism is also essential. “Make this a problem for politicians," he said.

As for politicians in the US, even the efforts to make the DAAs available to poor nations is not likely to quiet pharma’s critics, Kirby predicted. “Silence them? I seriously doubt that—not in an election year,” he said.

If DAA prices drop it in the US it will more likely be because of tough negotiations with pharmacy benefits management companies, he said. “PBMs are gaining some clout.”