Price of hepatitis c medicine sovaldi: the end of a long dispute

The manufacturer of the new hepatitis C medicine and the health insurers have now reached an agreement after all. The drug is to become more than 200 euros cheaper.

Patented active ingredient: In Germany, generic manufacturers cannot use sofosbuvir for cheaper drugs. Picture: ap

In the dispute over the price of the drug Sovaldi for the treatment of hepatitis C, the German health insurance companies and the U.S. pharmaceutical company Gilead have surprisingly agreed after all. In the future, health insurers will have to pay 488 euros for one tablet of Sovaldi. So far the price per tablet had lain with 700 euro.

The National Association of Statutory Health Insurance Funds (Kassen-Spitzenverband) announced on Thursday that the statutory reimbursement amount for a twelve-week course of therapy is now 43,562.52 euros net – compared with 60,000 euros that Gilead had previously demanded.

In fact, however, the health insurance funds only pay around 41,000 euros for the twelve-week therapy, because a legally fixed manufacturer’s discount (5.88 percent net) is deducted from the statutory reimbursement price. The reimbursement amount applies retroactively from January 23 and will also be reduced again over the next two years thanks to a negotiated price scale. The contract period would be three years.

The compromise had been the subject of tough negotiations for seven months. The arbitration board, which was convened in January after negotiations were initially declared to have failed, will be dissolved.

Special agreements by some health insurers

Sovaldi was launched in Germany at the beginning of 2014 and is considered a medical breakthrough in the treatment of the viral disease hepatitis C. The drug is now available on the market. The active ingredient sofosbuvir can cure the disease not only faster, but also with fewer side effects and a higher success rate than the previous preparation interferon. However, the extraordinarily high total therapy costs – which have so far ranged between 60,0,000 euros per patient – had led to a debate about the limits of the health care systems’ ability to bear the costs.

Some health insurance funds, including the AOK and Barmer GEK, had therefore already broken a taboo during the ongoing negotiations between the central association of statutory health insurance funds and the manufacturer and single-handedly concluded individual discount agreements with the pharmaceutical company. A spokeswoman for the SHI association was unable to say whether the negotiated statutory reimbursement amount is lower or higher than that of the discount agreements. Only this much: "The amount is associated with a savings."

Outraged by Gilead’s pricing policy, the non-governmental organization "Doctors of the World" challenged the active ingredient patent for sofosbuvir at the European Patent Office in Munich at the beginning of this week. Doctors of the World" argued that other private and state actors had also participated in the development of the molecular structure of sofosbuvir, and that Gilead could not lay claim to it alone.

Orientation to the wealth of the countries

The drug must be accessible to as many people infected with hepatitis C as possible. Patent withdrawal could contribute to this. This would allow generic manufacturers to produce and offer drugs with the same active ingredient at a much lower price. The European Patent Office has already pointed out that patents cannot be withdrawn for ethical reasons.

Meanwhile, Gilead had repeatedly pointed out that the price should also reflect the high costs of research and development and should also be based on the wealth of a country. In many countries in Africa and Southeast Asia, for example, Gilead makes its high-priced drugs available much more cheaply. In India, on the other hand, Gilead has concluded agreements with individual generic manufacturers who reproduce the actually patent-protected preparations and sell them – exclusively in India – at a lower price.

This was apparently not enough for the Indian patent authorities, who in mid-January denied patent protection to the active ingredient sofosbuvir in India. This means that even more generic manufacturers are now allowed to produce copycat drugs in India. In Europe, where patent law is much stricter, such a development is considered impossible.

Copycat protection for 20 years

Meanwhile, the Association of Research-Based Pharmaceutical Companies on Thursday reiterated the need for and benefits of patents. It is true that patents protect the commercial use of inventions from imitation for a legally defined period of time – to the benefit of the company that financed and carried out the research and development.

This period is uniformly 20 years worldwide. In addition, however, the patents guarantee that the inventions are made generally accessible, because the patent specifications in which they are described are published.

Furthermore, the fact that something is patented does not automatically mean that only the patent holder himself can work with it. With the patentee’s consent, other manufacturers can also use the patent – for example by paying license fees.

Patents also do not grant an absolute monopoly, the association clarified. The patent holder’s products would have to compete with other competitors despite the time-limited protection against imitation. In the pharmaceutical sector, this means that patented drugs compete with drugs already on the market and other innovative therapies.

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