Why Is Harvoni So Expensive?
Harvoni is an antiviral treatment for chronic hepatitis C that has recently gained worldwide attention for curing chronic hepatitis C. The cost of Harvoni has also received a lot of attention from patients and health systems. Harvoni is one of the most expensive drugs available, and social issues with Harvoni's price raise many difficult and significant questions on the pharmaceutical industry, access to healthcare, and why drugs cost what they do.
Here, we’ll see why Harvoni is so expensive, factors that impact Harvoni's cost, consequences to patients, and the alternatives available including the availability of generic Harvoni alternatives.
Understanding Harvoni and its uses?
Harvoni is a direct-acting antiviral (DAA) comprised of ledipasvir and sofosbuvir (two active components), which is mainly used to treat infections from the hepatitis C virus (HCV). Hepatitis C is a viral condition in which the hepatitis C virus infects the liver, resulting in a symptomatic, long-term infection with various complications, including cirrhosis, liver failure, and liver cancer if left untreated. Harvoni works by preventing the hepatitis C virus from replicating itself, thereby clearing the infection for a large percentage of patients after treatment for eight to twelve weeks.
Although Harvoni has changed the needle for the treatment of hepatitis C, its high cost is a significant barrier to access for many people, especially in countries with healthcare systems that do not fully cover for treatment.
The Factors Behind the High Cost of Harvoni
Several factors contribute to the cost of Harvoni, many of which can also be applied to any brand-name drug. The following are important factors:
Research & Development (R&D) Expense
The success of new drugs is expensive and lengthy, due to the complex processes required to research new drugs, especially for complicated diseases like hepatitis C. Pharmaceutical companies invest billions of dollars into R&D, which includes pre-clinical studies, clinical trials, and regulatory processes. Harvoni, like all drugs, was a product of the research stipulations prepared by a pharmaceutical company, Gilead Sciences. Developing the therapy to treat hepatitis C required substantial research time and investment. Everybody talks about how much it costs to take a drug from the lab in the academic setting to the pharmacy - perhaps another reason drug therapy prices are high. So, the cost is presumably passed along to the end user.
Patent Protection
Pharmaceutical companies receive patents on new drugs. The purpose of a patent is to allow the company that owns the patent to have exclusive rights to sell the drugs they develop. Patents last, usually, 20 years - during that time, the owner can charge a high price for the drug with no competition from generic manufacturers. Harvoni is patented as a formulation and for a manufacturing process, which allows Gilead Sciences to set a price with none of the market forces that typically sway and attempt to lower the price of medications. Patent protection is a high (and defining) factor in pharmaceuticals.
Manufacturing and Distribution
Producing and distributing drugs such as Harvoni necessitate a uniquely specialized facility as well as complicated processes. There are complex processes for the chemical synthesis of two active ingredients—ledipasvir and sofosbuvir—and the size of the cost for managing quality in manufacturing and adhering to regulations only increases the cost. The distribution to pharmacies and providers adds additional logistical costs to the price of Harvoni.
Pricing techniques and exclusivity
Pharmaceutical companies often price a new drug high to recover the costs associated with its development, while generating profits. In the case of Harvoni, Gilead Sciences priced the drug in the United States at more than $1,000 per pill—treatment costs can exceed $90,000 for a complete course of treatment. Gilead Sciences priced the drug high as a way to maximize profits during the exclusivity period before competition from generics drove down the price.
Absence of competition
Since Harvoni is a combination of two drugs that have never been co-administered, there is limited competition from other products. There are other DAAs available, but Harvoni was one of the first to show a high efficacy and low side effect profile. Additionally, there are no alternative treatments in the market that can match Harvoni’s cure rate in hepatitis C patients. This lack of effective alternatives also contributes to Harvoni’s high price.
Challenges of Harvoni’s Cost to Patients
Rising drug costs create many challenges for patients with hepatitis C (HCV) needing treatment. Many patients cannot afford Harvoni because they may be completely uninsured or have a high-deductible insurance plan that does not cover the cost. This is an access problem that could cause an increase in health disparities in HCV treatment, particularly in low-income communities.
The patient who cannot afford Harvoni could be at greater risk of severe liver injury, cirrhosis, and liver cancer, which are all avoidable complications if treated for hepatitis C early and appropriately. In addition, the cost of the drug becomes a burden on the health system because it forces governments and other payers (insurers and providers) to make decisions to limit care.
Generic Options for Harvoni: A Cheaper Option
One way to combat the high cost of Harvoni is to provide a generic option. When drug companies have a generic option available, they usually bring it to market as a significant cost savings because they do not have the same development or marketing costs as the brand drug. The use of generics provides affordable, life-saving medications and reduces the cost burden on a patient.
In the last couple of years, companies have begun to manufacture generic sofosbuvir and ledipasvir (the two active ingredients in Harvoni). Generic options have entered the market in India and Egypt, to name a few. In these countries, generic versions of Harvoni can cost anywhere from $200-$500 for a full course of treatment! In contrast, a full course of Harvoni can cost over $90,000 in the United States.
Unfortunately, generic Harvoni is still limited to many countries due to patent laws and trade agreements binding in various regions of the world. There have been some legal attempts to put affordable generics in the United States and other high-income countries, but patent holders often try to block these attempts through the courts. The legal recourse must be resolved through court before the generics are able to come in and provide these cheaper options.
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Final Words
The exorbitant price of Harvoni stems from research costs; patent protections; complications in manufacturing; and the nature of the market. While the drug is very highly effective in treating hepatitis C, the cost unfortunately puts it completely out of reach for a large demographic of the patient population that would benefit from using it. As pressure builds for more affordable treatment options, the emergence of generic equivalents of Harvoni provides hope in the healthcare space to reduce costs through well-documented alternatives and to ensure more patient access to life-saving medication.
For now, patients and healthcare providers must contend with the complicated landscape of drug pricing, insurance negotiations, and salvage therapies. The ongoing conversation regarding the cost of Harvoni is part of a more extensive general conversation regarding the role of the pharmaceutical industry, patent law, and healthcare system to produce life-saving treatments that are accessible to everyone.
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