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This is the most expensive drug in America

In 2014, a new hepatitis C drug came to market, an innovative treatment offering a cure for a disease that desperately needed one. The price tag: about $84,000 for a 12-week course of treatment, enough to make it the most expensive prescription drug in America.

In the medical world, the halls of insurance offices nationwide and even our nation’s Capitol, all hell broke loose.

The drug, Gilead Sciences Inc.’s Sovaldi GILD, +0.54% remains the most expensive drug in America today, topping a list compiled by drug price comparison website GoodRx. Second on the list is its sister drug Harvoni, which combines Sovaldi with another drug.

Insurer trade groups, activists and politicians alike have denounced Sovaldi’s price tag as far too expensive, especially considering the size of the patient population: currently about 3.5 million people in the U.S. are estimated to have hepatitis C. Gilead maintains that the innovation of the treatment justifies its price.

Sovaldi triggered debates about too-high drug prices that continue to this day, intensifying last year when Martin Shkreli, who was CEO of Turing Pharmaceuticals at the time, hiked prices on the cancer drug Daraprim by 5,000%.

For all the attention it received, Daraprim doesn’t actually make GoodRx’s top 10 list of most expensive drugs in the U.S., though Elizabeth Davis, GoodRx’s head of data and content, said she believes Daraprim could get pushed into the top 10 this quarter.

By and large, the top 10 costly drugs are new ones, with all but three emerging in the last five years. The list is also dominated by hepatitis C drugs, with most advances in curing the disease only happening in recent years (all of the hepatitis C drugs on the top 10 list were approved in 2013 or later).

Why is Sovaldi so expensive?

The ire spurred by Sovaldi’s cost was at least in part motivated by another -- much lower -- number quoted by the drug’s initial developer Pharmasset Inc.

‘We all pay the cost of Sovaldi.’

In a 2011 SEC filing, Pharmasset projected “a U.S. base rate of $36,000 per course of treatment,” which typically runs 12 weeks. Pharmasset was bought by Gilead before Sovaldi went to market at a price tag of more than twice that initial number.

Critics point to the $36,000 figure in the SEC filing as proof that Sovaldi’s high price tag cannot be justified in terms of expenses -- and is motivated by profit alone.

But others say it’s fair for a drug’s price to take into account how innovative the product is.

“It’s a cost-effective drug, by most metrics,” said Craig Garthwaite, a health economist who teaches at Northwestern...


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