By Ferdous Al-Faruque - 06/19/14 01:04 PM EDT
House Democrats are calling for a hearing into the price of a new $1,000-a-pill drug and the potential costs for the Medicare Part D program.
Drug company Gilead has come under heavy scrutiny over the price tag for its Hepatitis C drug, Sovaldi, since it was approved by the Food and Drug Administration last year. The drug must be taken once a day and total costs for treatment can top $84,000.
“Hearings before the Committee could help us understand the implications of Sovaldi’s high cost on the Medicare Part D program and on seniors and taxpayers,” they said.
“We could seek to understand Gilead’s pricing strategy and examine why Part D plans are unable to effectively negotiate for lower prices despite the fact that Sovaldi is available in other countries, under Medicaid, and to the VA at a significantly lower costs,” the lawmakers added.
Waxman and DeGette said the drugmaker gives substantial discounts for the drug to Medicaid programs and the Veterans Affairs Department but not Medicare Part D.
“Medicare Part D Plans have submitted their plan bids for 2015, and premiums will be made public in August,” they added. “It is not too late for Congress to take action to ensure that Part D premiums and costs are not adversely impacted by the high costs of Sovaldi.”
A recent study by researchers at the Kaiser Family Foundation and Georgetown University estimated the drug would cost Medicare Part D an additional $6.5 billion.
Gilead provides discounts for Sovaldi in other countries using a formula to determine what health providers abroad can pay.
Waxman and DeGette previously wrote to Gilead to ask what formula it used to determine the cost of Sovaldi, what discounts the company was offering, how it was factoring in the FDA’s expedited review of the drug into its cost, and the potential public health impact if insurers refused to offer the drug.
But lawmakers say they have so far not gotten a “compelling justification” from the company about why the drug is priced so high.
The high cost of the drug has renewed debate over pharmaceutical costs and how the industry can recoup its investments in research and production.
The price of specialty drugs like Sovaldi has also sparked a clash between drug and insurance companies that blame each other for the rising cost of healthcare.
The top insurance lobby group, America’s Health Insurance Plans, wants drugmakers and insurers to hash out their differences on their own before the government steps in.
"We would prefer that drugmakers sit down with stakeholders to find a private sector solution, but it is important that we have a national dialogue about the threat these unsustainable prices pose to patients and our entire healthcare system," said Brendan Buck, a spokesman for AHIP, in response to the call for a hearing.
The main drug lobby group, the Pharmaceutical Research and Manufacturers of America says the issue isn’t just about the cost of treatment but how treating a patient earlier can prevent costlier bills later on.
In the case of hepatitis C, treating patients earlier can save expensive treatments for liver diseases and costs of liver transplants.
"Any discussion of the cost of medicines must also focus on the value they provide to patients and the health care system broadly,” said Robert Zirkelbach, a PhRMA spokesperson. “Medicare Part D offers a great example of how access to comprehensive prescription drug coverage not only benefits the health of beneficiaries allowing them to live longer, healthier and more productive lives, but can also reduce spending on other healthcare services."
Updated at 2:10 p.m.