Gilead Sciences, Inc. (NASDAQ:GILD) Gaffe Leads Drug Makers To Pledge More Openness On Price

Drug makers are worried about the market reaction over increasing drug prices especially after what happened to Gilead Sciences, Inc. (NASDAQ:GILD) over the Solvadi cure for Hepatitis C.

Drug companies such as Sanofi SA (ADR) (NYSE:SNY) and Biogen Inc (NASDAQ:BIIB) expressed their concerns following the undesirable response that Gilead received in 2013. The company had revealed a drug known as Solvadi which was supposed to be a long-term treatment for Hepatitis C. The drug’s treatment period was spread out over 12 months but the highlight was the outrageous price of treatment that the company had set at $84,000.

The expensive pricing was followed up with a lot of criticism from the public and the media. The situation was so much of a controversy that a group of Democrats called for a meeting with the drug company to explain the shocking pricing. Additionally, Gilead’s drug was rejected by the one of the biggest drug insurance benefits managers. A different and more affordable drug from a different company was selected over Gilead’s proposal.

The introduction of Solvadi was received with mixed feelings especially by hospitals and insurance companies who felt that they were unprepared. Most medical departments said they had not planned for such a pricey introduction. Additionally, the drug put a lot of pressure on the financial budgets.

The other companies including Biogen and Amgen have been holding meetings to discuss the pricing of the drugs under development with insurers. Sanofi is also in talks with insurers to discuss the pricing strategies for gene therapies. The companies are trying to avoid the consequences that followed Gilead regarding the Solvadi drug. Gilead had not considered the impact that the pricing would have on the health care system.

Perhaps the drug was introduced without following the protocol based on its promising nature. The trials for the drug were very successful, thus being regarded as one of the most successful drugs in recent times. The drug has greatly contributed to the constantly increasing spending on Drugs.

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Published by Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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