Welcome to this Center for Healthcare Innovation (CHI) white paper: The Value of Sovaldi: Societal Cost Issues of New Interventions on Hepatitis C. In December 2013, the FDA approved a new drug, sofosbuvir, for the treatment of Chronic Hepatitis C. The drug, commonly known as Sovaldi, was developed by Gilead Sciences, a U.S. biotechnology company. The initial price tag of a 12-week treatment of Sovaldi was reported as approximately $84,000, or nearly $1,000 per pill. This resulted in considerable media attention and an ensuing pricing controversy. Editorials and op-eds sprung up around the country debating Sovaldi’s price tag and the broader debate over fair drug pricing. Some politicians expressed outrage over the cost of new drugs, while others argued for free market pricing and rewards for the considerable R&D costs that biopharmaceutical companies incur when bringing a new drug to market. The often niche drug pricing debate had officially spilled over into the mainstream conversation. Payers, policymakers, pharma, patients, and providers all voiced strong— and sometimes contrasting— opinions. At CHI, we aim to help these stakeholders increase their knowledge and understanding of healthcare value, which we view as a function of quality, access, and cost. Thus, we decided to further explore the value of Sovaldi and how the costs and benefits of the drug relate to the broader discussion of the treatment of Hepatitis C. Our goal is to offer a more informed and analytical approach to the discussion of the value of Sovaldi. One question that immediately arose was “How does the price of Sovaldi compare to the long term costs of the treatment of Chronic Hepatitis C ?” Our goal was to analyze the complex interrelationships and broader macroeconomic principles relating to the costs and benefits of a drug, as well as the long term costs of treating Chronic Hepatitis C.
By analyzing the societal cost implications of Chronic Hepatitis C, we aim to help patients, providers, pharma, pharmacy, payers, and policymakers increase their knowledge and understanding of the value of this treatment—as well as the complex relationships between drug costs and the longer-term costs of a disease. We hope that you find this white paper to be both thought-provoking and useful, and we welcome your feedback. We thank you for your interest, and we hope you enjoy our comprehensive analysis.
Corey Mason, Analyst, Center for Healthcare Innovation
Stuart Rich, MD, Senior Fellow, Center for Healthcare Innovation
Joseph Gaspero, President & Co-Founder, Center for Healthcare Innovation