The Same Pill That Costs $1,000 in America Sells for $4 in India

The Same Pill That Costs $1,000 in America Sells for $4 in India

Ketaki Gokhale KetakiGokhale
December 28, 2015 — 4:01 PM PST

Gilead Drug Is Cheaper in India, Here's Why

Outsiders don’t want their daughters to marry any local boys, according to the village elders swapping stories in a tailor’s shop behind the Sikh temple, because most residents are infected with black jaundice.

That’s what they call hepatitis C, which is so common in parts of India’s Punjab state that the tailor-shop gossips might not be off base in their estimate. But prevalence could be something of an advantage these days. Drugmakers have made the village of Lande Rode one of the theaters in a battle to grab market share for sofosbuvir, a miracle cure that Gilead Sciences Inc. sells in the U.S. as Sovaldi at a retail price of $1,000 a pill. Gilead licensed 11 Indian companies to make generic versions, and they sealed marketing deals with others. Competition has been so fierce it’s driven down the cost and spurred thousands to be tested.

QuickTake Access to Medicines

Manufacturers “want more and more patients” and are willing to wheel and deal on price, said Nirmaljeet Malhi, a gastroenterologist at Apollo Hospitals in Ludhiana, about 200 kilometers (124 miles) from Lande Rode. “If one 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 to entire villages. Sofosbuvir was cheap by most any standard when it hit the market in Punjab at $10 in March. Then the cost kept dropping, to as low as $4.29, and doctors predict it will continue to fall.

Game Changer

That’s in contrast to the situation in the U.S., where Gilead set off a firestorm in December 2013 by listing Sovaldi at $84,000 for a 12-week course regimen. It’s a game-changing drug, often wiping out an infection in three months, and without the debilitating side effects of earlier treatments that took longer. Still, the cost started the latest 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, the company arranges to make life-saving cures available in some parts of the world for far less; laws and pressure introduced so-called tiered pricing after expensive anti-HIV treatments became available in the ’90s and reduced deaths in rich countries and not poor ones. In exchange for a 7 percent cut of sales, Gilead gave companies including Mylan NV, Cipla Ltd. and Natco Pharma Ltd. rights to make generics for distribution in 101 developing nations where hepatitis C is often untreated and $1,000 is more than people might earn in a year. The company wants to “foster competition in the marketplace” in low-income areas, according to spokesman Nathan Kaiser.

Now there are more than a dozen sofosbuvir versions for sale in India. “The market has become highly competitive in the last six months with close to 20 companies launching their own,” said M.V. Ramana, executive vice president and head of branded markets at Dr. Reddy’s Laboratories Ltd.

The U.S. Pays a Lot More for Top Drugs Than Other Countries

Click here for the full interactive graphic.

Competition Benefits

The sofosbuvir rivals are aggressive about expanding the customer base by making the pills affordable and diagnosis easier. Dr. Reddy’s, for example, set up a venture with lender Arogya Finance to offer no-interest loans for patients, and Abbott Laboratories worked with French medical equipment company Echosens SAS to supply Indian hospitals with 13 ultrasound machines that determine the level of fibrosis, or hardening, without a liver biopsy.

A main benefit of the competition, according to doctors, is that so many are being tested for hepatitis C, which can lead to cirrhosis and liver cancer. As many as 150 million people have the disease, according to the World Health Organization, including at least 12 million in India. Common modes of transmission are tainted medical equipment and reuse of syringes.

Liver Scans

Some of the highest infection rates are in Lande Rode and other villages of Punjab’s cotton-growing Malwa belt, where 30 percent to 50 percent of the population might have the virus, said Gagandeep Goyal, a gastroenterologist at Global Healthcare, a hospital sandwiched between an Adidas store and a Vodafone outlet in Bathinda, the fifth-largest city in Punjab.

There are expenses beyond the drug itself. Villagers are encouraged to go to hospitals in cities for exams to determine the amount of virus in the blood and the exact strain, and scans to see the amount of scarring on the liver. At Malhi’s hospital the charge for a liver scan is 3,500 rupees ($52.86).

Malhi said pharmaceutical companies 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,” he said. As for the drug itself, he said, if he tests 20,000 people and finds 2,000 infected, he might be able to negotiate to get the cost of a 12-week course reduced by a third to $1,000.

“Where in the U.S., you get one pill, here you get an entire treatment,” he said. “People in these villages can afford this -- possibly everybody can.”

The disease is a topic of conversation for the elders at the tailor’s shop in Lande Rode, a cluster of concrete houses dotting dirt roads and surrounded by rice and wheat fields. Baldev Singh, a farmer and official of the Sikh temple, said he reckoned 80 percent of the village is infected.

Singh’s family is like many. He was successfully treated with interferon injections last year, before the antiviral pill was available. He looks older than his 45 years, his beard fully gray and his eyes hidden behind sunglasses, even inside the tailor’s dimly lit shop. 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 said he thinks her viral count is too low to warrant the expense of generic Sovaldi.

“And anyway,” he said, “the price is supposed to come down a little more, right?”

http://www.bloomberg.com/news/articles/2015-12-29/the-price-keeps-falling-for-a-superstar-gilead-drug-in-india

http://www.bloomberg.com/news/articles/2015-12-29/the-price-keeps-falling-for-a-superstar-gilead-drug-in-india