(Bloomberg) — Gilead Sciences Inc. (Nasdaq:GILD), whose hepatitis C drugs Harvoni and Sovaldi have sold $13.3 billion in the United States during the last year, priced the drugs to maximize revenue instead of in a way to make the treatments widely acceptable or based on how much it cost to develop them.
The company set the price of its first drug, Sovaldi, at $84,000 for a 12-week course partly in order to be able to later charge a high price for Harvoni, its follow-up medicine that came to market the next year with a list price of $94,500, the lawmakers said.
Sens. Ron Wyden, an Oregon Democrat, and Charles Grassley, an Iowa Republican, released a report Tuesday that they said was based on 20,000 pages of internal company documents, data from U.S. health programs, and interviews with experts.
“Gilead pursued a calculated scheme for pricing and marketing its hepatitis C drug based on one primary goal, maximizing revenue, regardless of the human consequences,” Wyden said in a statement announcing the findings. “There was no concrete evidence in e-mails, meeting minutes or presentations that basic financial matters such as R&D costs or the multi-billion dollar acquisition of Pharmasset, the drug’s first developer, factored into how Gilead set the price.”
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Cara Miller, a spokeswoman for Gilead, didn’t immediately return a request for comment on the investigation. In the past, Gilead hasn’t emphasized research costs as a major factor in its pricing and has instead said that the drugs represent a significant medical advance and are far cheaper than the cost of caring for complications from the liver infection.
$11 billion deal
Gilead acquired Sovaldi, which is also the backbone of the combination drug Harvoni, in an $11 billion acquisition of Pharmasset Inc. in 2012. Harvoni was approved by the Food and Drug Administration (fda) in October 2014.
The investigation found that one reason Gilead set the original price of Sovaldi at $84,000 was that it wanted to set a high benchmark that would ensure a high price for future generations of hepatitis C drugs, including Harvoni.
“Over the eight months Gilead spent determining the price of Sovaldi, the company repeatedly made clear its primary focus was outmaneuvering potential competitors to ensure its drugs had the greatest share of the market, for the highest price, for the longest period of time,” investigators said in an executive summary of the report.