SEPTA files class action against Hepatitis-C drugmaker for alleged price gouging

By Jim Boyle | Dec 10, 2014

SEPTA has filed a class action suit at the U.S. District Court for the Eastern District of Pensylvania against Gilead Sciences, Inc. related to the sale and pricing of its Hepatitis-C drug, Sovaldi.

Sovaldi is the first drug approved by the Food and Drug Administration for certain types of Hepatitis-C infections that does not need to be injected. It can reportedly cure about 90 percent of patients with the most common form of Hepatitis-C in three to six months, and can do so with relatively minor side effects compared to earlier available treatments.

Gilead has been selling a 12-week regimen of Sovaldi in the United States for approximately $84,000, or $1,000 per pill. This is significantly more than the original price projection for Sovaldi, and in sharp contrast to the prices at which the drug is being made available in other countries, the complaint says.

Gilead recently announced its intention to make Sovaldi available in 91 developing countries at deeply discounted prices, and the drug is reportedly available in Egypt for 99 percent below the U.S. price.

While there are some orphan drugs that are similarly expensive, they are typically limited to rare conditions that affect only a very small patient population. In those instances, charging high prices may be necessary to recoup amounts invested in research and development.

In the case of Sovaldi, however, there are between 2.7 and 5.2 million people in the United States infected with Hepatitis-C, and 185 million people worldwide. The complaint alleges that, if left unchecked, Gilead's exorbitant pricing scheme has the potential to bankrupt segments of the U.S. healthcare system.

According to the claim, Gilead's pricing practices have also had the effect of pricing certain consumers and government programs out of the Sovaldi market, thus preventing sick patients from obtaining this critical drug. The complaint also cites reports that Gilead's pricing scheme has had a disproportionately high impact on minorities and those in lower income brackets (demographics that have had historically higher incidents of Hepatitis-C infections).  Meanwhile, Gilead has recorded $8.5 billion in Sovaldi sales through the first three quarters of 2014 alone.

The complaint alleges that, under these extraordinary circumstances, Gilead's pricing cannot be justified by any patent rights it purports to have related to Sovaldi. The lawsuit seeks class action status on behalf of all persons and entities that have paid some or all of the purchase price of Sovaldi, and those who have been prevented from obtaining a needed Sovaldi regimen due to its excessive price.

The complaint asserts causes of action for unjust enrichment, for violations of provisions in the Sherman Antitrust Act and Affordable Care Act, and based on a breach of contract theory.

SEPTA is represented by attorneys from Chimicles & Tikellis in Haverford, Pa.

The federal case ID is 2:14-cv-06978.

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