Gilead Sciences trumpets Harvoni, its newest Hepatitis C med, as a wonder drug. It's the first-ever once-daily pill, an improvement over predecessor Sovaldi, which requires a sidecar of injections. Cleanliness of dosing comes with a tradeoff. Harvoni costs $1,350 per pill, or $350 a pop more than its pharmacological forerunner. Harvoni's 12-week treatment regimen price tag: $94,500. What explains the increase? Because big pharma can. Hepatitis C is a liver-wasting viral infection affecting somewhere between three to five million Americans and hundreds of millions worldwide.

In 2011 Gilead paid $11 billion to acquire Pharmasset, Inc., which at the time had a product that would become Sovaldi in clinical stages.

Sovaldi's price tag has helped limit its use in the U.S. The medicine must also be taken with an intravenous-based, side effects-laden therapy. This has resulted in it often being relegated to treating those patients in the disease’s most advanced stages.

Despite the drug's tepid performance, it’s produced a profit coup for its maker.

Late last year Sovaldi was on track to become the world's best-selling drug. Estimates for first-year sales exceeded $10 billion.

In contrast, it took Lipitor, the well-known cholesterol-lowering medication, nearly a decade to reach its record-breaking $12.9 billion in sales.

Harvoni's early sales numbers are golden even by big pharma standards.

Gilead forecast that along with Sovaldi the two drugs would generate around $3.5 billion in first-quarter sales this year.

In April, the California-based biotech company reported Harvoni alone had sales of $3.5 billion. Sovaldi chipped in almost another $1 billion.

Gilead's total first-quarter revenues of $7.6 billion were a 52 percent increase from the same period in 2014.

The company now sits on a reported $14.5 billion, and growing, pile of cash.

High-priced drugs are often excused by manufacturers claiming research and development is expensive. However, Gilead's total R&D budget in 2013 was roughly half of what Harvoni sales alone generated in 2015's first three months.

A Gilead spokeswoman told City Pages last month: "We believe the prices of Harvoni and Sovaldi reflect the value of the medicines."

In other words, there's nothing stopping us from charging what we want.



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