Over the past two decades, U.S. Representative Henry Waxman has given the drug industry good reason to fear him.
Waxman (D.-California) humiliated Merck in open hearings by publicizing sales training materials that indicated the company had instructed its reps to deliberately downplay the heart risks of the pain pill Vioxx — a game Merck literally called “Dodgeball.” He has fought for allowing cheaper versions of U.S. medicines to be imported from Canada, and for more making available generic versions of the protein drugs that are the biotech industry’s core products.
Now Waxman, who has said he will retire in 2016, has fired one more shot across the drug industry’s bow: he’s taking on the high drug prices that have been the lifeblood of the drug business over the past decade.
Witness a sternly written letter, authored with fellow Democrats Frank Pallone Jr. of New Jersey, and Diana DeGette of Colorado, toGilead Sciences GILD -4.3%’ Chairman and Chief Executive John Milligan asking how it can possibly be that Gilead’s breakthrough new drug for the liver virus hepatitis C, Sovaldi, can cost $84,000 per course.
“Our concern is that a treatment will not cure patients if they cannot afford it,” they write. “In cases where Sovaldi is prescribed with other treatments, the costs could be even higher.”
This is, in the words of International Strategy & Investing Group’s Mark Schoenebaum, a “public shaming campaign.” And there are plenty of defenses for Gilead to use. Schoenebaum says that the sticker price for Incivek, previously the most effective treatment for hepatitis C, is $100,000 per course, including a longer course with the drugs ribvavirin and pegylated interferon, which cause severe flu-like symptoms. Gilead, the argument goes, is actually saving the health care system money with its expensive new pill. And it is potentially doubling the percentage of patients cured, from about half to 95%.