Hepatitis C Drug Costing VA, DoD Millions

One of the costliest drugs on the market threatens the Veterans Affairs Department's health budget — to the point that VA, which added the medication to its formulary in April, provides it to only the sickest patients who need it.  At a commercial cost of $1,000 a pill, the hepatitis C drug Sovaldi received FDA approval in 2014, a breakthrough that reduced the time it takes to treat patients with the blood-borne virus to 12 weeks, down from a year, and at reduced risk.  

But treating all of the 174,000 hepatitis C patients in the VA health system is cost-prohibitive. Even with the cost negotiated by VA with the company's maker, Gilead Sciences Inc. of Foster City, California — $594 per dose — treatment would run nearly $12 billion.  So VA has taken a conservative approach to providing the treatment, reserving Sovaldi and its competitor, Olysio, made by Janssen Therapeutics of Titusville, New Jersey (negotiated cost: $413 per pill), for those with advanced liver disease or needing a transplant.

In fiscal 2014, the Veterans Health Administration treated more than 5,400 veterans with Sovaldi at a cost of $370 million. And VA has asked Congress for roughly $1.3 billion to provide Sovaldi and other new hepatitis C drugs for another 30,000 patients.  But even with the more than 40 percent discount VA has negotiated with Gilead, the department pays more for the total treatment regimen than the health systems of Canada, where 12 weeks of Sovaldi costs $55,000; Germany, where it costs $66,000; or India, where Gilead is negotiating to provide generic versions for $2,000...