Harvoni: Orphan-Drug Pricing for a Non-Orphan Drug

Oct 23, 2014
Although millions of Americans have hepatitis C, Harvoni is priced as if it were treating an extremely rare condition.
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  • Hepatitis C

Orphan drugs are among the most expensive medications in the U.S., often costing tens of thousands of dollars per prescription. Since these medications treat very niche populations – sometimes just a few hundred or a few thousand total patients – the high price tag is often justified to fund manufacturers’ research and development toward medical breakthroughs that might not otherwise happen.

All orphan drugs are expensive. But this year has taught us that not all expensive drugs are orphans.

Two weeks ago, the Food and Drug Administration approved Harvoni® (ledipasvir and sofosbuvir), which is indicated for patients with genotype 1 of the hepatitis C virus. In the U.S. alone, an estimated 2.4 million patients have this genotype. That’s more Americans than the entire population of Houston.

Harvoni is clearly not an orphan drug.

Despite having the potential to treat millions of patients, Harvoni is priced at a staggering $1,125 per tablet. That’s more than $33,000 per 30-day prescription.  

To put this into context, the table below lists the most expensive drugs currently billed through the U.S. pharmacy benefit. While Harvoni and its predecessor Sovaldi® (sofosbuvir) are not at the very top of the list, their target patient population is 48 times larger than the next most prevalent indication on the list.

Most Expensive Drugs Currently Billed Through the US Pharmacy Benefit

Never before have drugs been priced this high to treat such a large patient population. What we’re seeing today in hepatitis C is orphan-drug pricing for non-orphan drugs.

The Express Scripts Perspective

Like everyone, Express Scripts supports the introduction of new breakthroughs that improve the clinical experience. Harvoni provides a true improvement over the previous treatments, and as such its manufacturer deserves a fair profit for the innovation.

Unfortunately, though, Harvoni’s price – which we’ve explained before is a premium on top of another premium – is simply unsustainable. It forces patients to decide between medications and other staples like food or rent. And it forces payers – small and large businesses, health plans, government agencies and others – to consider whether or not they can even sustain the pharmacy benefit they provide to members.

If hepatitis C were an orphan disease affecting a few thousand Americans, one could more readily argue that the current price is right. But when we’re talking about a condition afflicting millions of Americans, that price is wrong – for both patients and payers.

As new hepatitis C drugs are approved in the coming months, Express Scripts plans to drive more competition among the manufacturers, which will help improve both access and affordability to this important class of medications.

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