Why is Gilead charging VA $40,000 for drug?

Veterans deserve affordable access to life-saving medications such as sofosbuvir, U.S. Rep. Jeff Miller says.

Story highlights

  • Jeff Miller: Drugmaker charging VA upward of $40,000 per patient to treat hepatitis C
  • Miller calls price outrageous, especially since the company charges Egyptians far less

U.S. Rep. Jeff Miller, R-Florida, is the chairman of the House Committee on Veterans' Affairs. The opinions expressed in this commentary are solely those of the author.

(CNN)In America, honoring our veterans comes second nature to most citizens. That's because the overwhelming majority of our people understand that, if not for the service and sacrifice of those who have worn the uniform, the United States would not be the extraordinary place it is today.

Unfortunately, this concept seems lost on the people at drugmaker Gilead Sciences.
Jeff Miller
The company is the maker of the hepatitis drug sofosbuvir, which can potentially cure hepatitis C, a chronic liver disease that affects about 3.2 million Americans, including nearly 200,000 veterans. The fact that Gilead is making this landmark medication available to consumers is an overwhelmingly positive development that deserves recognition.
    But the way in which the company is picking and choosing who gets affordable access to the drug deserves condemnation.
    Sofosbuvir doesn't come cheap -- that is, unless you live in countries such as Egypt, where Gilead is making the drug available for around $900 for the full 12-week regimen.
    Meanwhile, here in the United States, the company is charging the Department of Veterans Affairs upward of $40,000 for the same treatment, which reportedly costs about $1,400 to manufacture. The department -- and Congress -- have been scrambling to cover the costs of the drug.
    In fact, during the current and prior fiscal years alone, Congress has authorized an additional $2.7 billion for the VA to help prevent the department from having to ration veterans' access to the drug.
    The extraordinary prices Gilead is charging U.S. customers for sofosbuvir are making the company rich, bringing in more than $10 billion in the drug's first year on the market.
    But Gilead's tone-deaf pricing strategy also fails to take into account the fact that without the Department of Veterans Affairs, the drug at the center of this debate would not even exist. Sofosbuvir was invented by a team led by a VA doctor, who sold the company that developed the drug to Gilead in 2012.
    In other words, Gilead is making billions by charging American taxpayers exorbitant prices for medicine a VA doctor helped invent. And to add insult to injury, Gilead is practically giving the drug away in Egypt and some 90 other developing nations.
    Gilead, in a twisted attempt to defend this exploitation of our veteran community, will likely point to the fact that it is already providing sofosbuvir to the VA at a discount. While it's true that the company is selling the VA its sofosbuvir products at discounted prices that range from $41,280 to $68,267, this paltry price reduction pales in comparison to the deal Gilead is giving hepatitis sufferers in other countries.
    The government shouldn't be in the business of telling private companies what to charge their customers. But by the same token, companies such as Gilead shouldn't price-gouge one group of consumers to subsidize its preferential treatment of another.
    Gilead's price discrimination against American veterans and the organization established to care for them is a slap in the face to the millions who depend on VA health care as well as the taxpayers who generously fund the department.
    If there is any group of citizens anywhere in the world who deserve affordable access to life-saving medications such as sofosbuvir, it's America's veterans. It's unfortunate that Gilead's leaders are apparently too busy kowtowing to foreign countries to realize this.
    At any rate, when Gilead states on its website that its goal is to ensure its "medicines are accessible to all people who need them, regardless of where they live or their economic means," one thing is certain: The company wasn't referring to American veterans. Perhaps it's time for Gilead's leaders to explain why.