Sovaldi not the first to break the bank

The price of Gilead’s wonder hep C drug Sovaldi has some patient groups hot under the collar and has sparked angry debates as far up as the US Senate finance committee, but it is not the most expensive sold in America by a long chalk.

New sales, volume and pricing data from EvaluatePharma reveal that the $84,000-a-year price tag for Solvadi does not earn it a place in the top 10 most expensive drugs in the US – and only just allows it into the top 20. Instead, the crown for the most pricey product rests firmly on Soliris’s head, and last year Alexion even managed to get a 6% increase on its annual price tag of more than half a million dollars (see table below).

The treatment for the rare disease paroxysmal nocturnal hemoglobinuria was sold for $536,629 last year, and while this may seem excessive it should be borne in mind that if pharma companies were not able to charge large amounts of money for these drugs there would be no incentive to develop products for small patient populations.

As such, it is no surprise that the majority of the most expensive drugs sold in the US are for small orphan populations. BioMarin Pharmaceuticals’ Maroteaux-Lamy syndrome treatment Naglazyme, was, according to EvaluatePharma data, only prescribed to 64 people in the US last year.

US top 20 most expensive drugs*
US cost per patient per year ($)
Rank Product Company Orphan drug 2012 2013 % change
1 Soliris Alexion Pharmaceuticals Yes 508,187 536,629 6%
2 Naglazyme BioMarin Pharmaceutical Yes 478,269 485,747 2%
3 Kalydeco Vertex Pharmaceuticals Yes 258,057 299,592 16%
4 Cinryze ViroPharma Yes 222,609 230,826 4%
5 H.P. Acthar Gel Questcor Pharmaceuticals Yes 188,471 205,681 9%
6 Sprycel Bristol-Myers Squibb Yes 137,527 149,762 9%
7 Pomalyst Celgene Yes –  147,302 – 
8 Xyrem Jazz Pharmaceuticals Yes 104,489 143,604 37%
9 Erbitux Bristol-Myers Squibb No 135,149 137,953 2%
10 Revlimid Celgene Yes 120,837 128,666 6%
11 Yervoy Bristol-Myers Squibb Yes 120,588 123,800 3%
12 Kyprolis Amgen Yes 105,975 117,750 11%
13 Jakafi Incyte Yes 85,255 112,963 33%
14 Kadcyla Roche No –  110,145 – 
15 Afinitor Novartis Yes 102,890 108,960 6%
16 Nexavar Bayer Yes 91,364 102,639 12%
17 Exjade Novartis Yes 81,567 100,562 23%
18 Mekinist GlaxoSmithKline Yes –  94,391 – 
19 Sovaldi Gilead Sciences No –  85,015 – 
20 Gleevec Novartis Yes 77,698 84,373 9%

Source Evaluate USA Sales, Volume Price Analysis

*All data are based on an analysis of the sales of the top 200 drugs sold in the US by revenues and therefore might exclude products with smaller annual sales. The cost per patient per year is derived from calculations based on published unit prices of drugs and indication-specific FDA dosing schedules.

An orphan with parents

The idea of charging more to serve small patient groups could be one of the reasons for the furore around Sovaldi, which has been priced like an orphan drug but treats a fairly large group of hep C sufferers. This significant ratcheting up of costs, owing to the volume sold, has bothered health insurers and government payers.

It had been rumoured that Sovaldi’s originator, Pharmasset, was only planning to charge $36,000 a year for the product and that the increased cost is largely down to Gilead trying to recoup some of the $11bn it spent on acquiring the company and making hay before expected new entrants to the market brought prices down.

Whatever others think of Gilead’s pricing policies the group is not alone in charging orphan prices for a non-orphan drug. As the table shows both Bristol-Myers Squibb and Roche have got in on the act with the melanoma drug Yervoy and antibody-drug conjugate Kadcyla.

The only way is up

Even among the companies who do have orphan drugs, some of the annual price rises are surprising. Both Jazz Pharmaceuticals and Incyte have not been shy about introducing hefty rises for their products, with a 37% increase in the price of Xyrem to $143,604 and a 33% lift for Jakafi to $112,963 last year.

In fact all of the products in the top 20 that have been on the market for more than a year achieved annual price increases, including H.P. Acthar Gel, proving that age is no barrier to increased profits. Acthar, a product for infantile spasms, has been on the market since 1952, before the 1962 changes to the statutory requirements for efficacy, but was granted orphan designation in 2010.

This shows that despite the increased rumblings of discontent from payers about the rising costs of both orphan and non-orphan drugs, if companies believe that they can get away with increases to their listed prices they will raise them. It falls to others to ask how much is too much.

To contact the writer of this story email Lisa Urquhart in London at lisau@epvantage.com or follow @LisaEPVantage on Twitter

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