Thursday, 10 September 2015 13:05

Are Gilead Really Bastards?

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So I received an email pointing out that you can make these new medications for $1 a dose.

The question, not really a question, more of a talking point, was this:

Hill et al 2014: US$2000 might seem dirt cheap for a 12-week course of meds to clear Hep C (compared to Gilead’s US$84,000), but this excellent study provides a reality check, finding that the production costs at scale for sofosbuvir is $68-136, and for daclatasvir $10-30. They didn’t assess ledipasvir.

So here's what I replied:

To be fair to Gilead,

Yes the cost to produce a single dose is circa $1 but.....

It's not unreasonable that these dudes turn a profit. At the end of the day if drug companies don't make a profit they go bankrupt because they can't pay their bills.

155,000,000 people have Hep C. So let's say that 1% are willing/able to pay That's only 1.5 million. Now Gilead paid $11 billion for Pharmaset, set let's ignore production costs for a moment.

Gilead actually need those 1.5 million to pay just over $7,500 each to get to $11 billion and break even.....

Now this is not to defend Gilead's practices but simply to point out all businesses have to amortize fixed costs, so sure you can make it for $1 but you've got (in this case) ~ $75 fixed costs per dose

To get the fixed costs down to $1000 per patient you need to treat 11,000,000 people.

Personally I'd rather see all 155,000,000 treated.

So here is my open letter to Gilead:

Dear Gilead,

With great power comes great responsibility.

You have the capacity to make a difference, make a profit, or both.

You have already amortized your investment and made a 100% profit on your $11 billion investment.

Doubling your money in a couple of years is good so be happy.

How about you consider limiting your future profits to 1000% and you make Harvoni available for $10 a tablet worldwide?

You know, like you do in Egypt?

You could save about 1/2 a million lives a year.

Just in case you were wondering, that's 1 person a minute dying for lack of access to treatment.

Kind Regards

Dr James Freeman on behalf of 155,000,000 fathers, mothers, sons and daughters.

PS: Alternatively parallel importing will undermine your market and patients will access medication at this price point anyway. That will be sad for you because your potential 1000% profit will go to people who did not take the risks you did with your investment. Bastardos! Why not undercut them and get worldwide adulation?

PPS: If you don't believe this is going to happen look to history - parallel importing of HIV medication into Africa and the Dallas Buyers Club spring to mind.

Read 105116 times Last modified on Thursday, 10 September 2015 21:15

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