Gilead to license hepatitis C drug to lower-cost manufacturers in India

(Reuters) – Gilead Sciences plans to license its breakthrough hepatitis C drug Sovaldi to a number of Indian generic pharmaceutical manufacturers, allowing for lower-priced sales of the medication in that developing nation, according to the company.

Although prices for the drug have not been set, company spokesman Nick Francis said in an emailed statement on Wednesday that Gilead aims to establish “tiered pricing.”

For example, the price discussed for 24 weeks of Sovaldi therapy would run about $2,500 for certain patients at public hospitals, community clinics and non-governmental agencies in India, the Hindu Business Line reported earlier this week.

“Providing treatment in resource-limited settings presents complex challenges, and we will work with partners in multiple sectors around the world to ensure our access program reaches as many patients as possible,” Francis said.

Gilead said final details of the program in India will be announced in coming months. The company has a similar program in place for lower-cost versions of its HIV/AIDS drugs.

In the United States, where Sovaldi was approved by regulators in December, the drug costs $84,000 for 12 weeks of therapy or $1,000 for a daily pill.

The Foster City, California-based company has said the price is fair because the treatment offers a potential cure for the liver-destroying virus without injections of interferon, which can cause severe side effects that compromise patient outcomes.

Prices in Europe are also lower than in the United States. The cost for treatment in the United Kingdom is about $57,000 while the price in Germany is around $66,000, the company has said.

Analysts have estimated that the drug will eventually generate billions of dollars in annual sales. Sanford Bernstein has forecast sales this year alone of $6.7 billion.

But some have questioned whether that is achievable. Many patients including those in the United States, where more than half of hepatitis C patients are estimated to rely on public funding, could have difficulty securing reimbursement for such a high-priced drug.

Other companies including Johnson & Johnson, AbbVie and Merck & Co are also working to develop new hepatitis C treatments with some in advanced stages of clinical studies.

Gilead, which reported 2013 earnings on Tuesday, declined to include an estimate for hepatitis C sales in its 2014 sales forecast, saying only that Sovaldi sales so far have been strong and broadly based.

Sales of Sovaldi in the last three weeks of 2013 totaled more than $139 million.

The World Health Organization estimates that about three percent of the world’s population has been infected with the hepatitis C virus and that more than 170 million chronic carriers are at risk of developing liver cirrhosis, liver cancer or both.

Shares of Gilead fell $3.87, or nearly five percent, to close at $78.15 in Nasdaq trading on Wednesday. Over the past two years, the stock has nearly tripled.

(Reporting By Deena Beasley; Editing by Diane Craft)