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Costs of New Treatments for Hepatitis C Infection

Costs of New Treatments for Hepatitis C Infection Letters 3. US Securities and Exchange Commission. Pharmasset Inc: SEC filings. http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany To the Editor In seeking to rationalize sofosbuvir pricing, Drs &CIK=0001301081&owner=exclude. Accessed July 22, 2014. Brennan and Shrank assumed $11 billion in development costs. Even if this were reasonable, Gilead’s $2.27 billion first quar- To the Editor Drs Brennan and Shrank raised several impor- ter revenue would suggest that the price was grossly inflated. tant questions regarding the imperative of balancing indi- But the development of sofosbuvir did not cost that much. vidual and societal benefits of certain new medications against Normally, a commercial sale includes an amount for in- their large financial expense. Equitable return on investment tangible assets, such as goodwill. In the acquisition of Phar- is commonly deemed acceptable; however, defining a reason- masset by Gilead for $11 billion, these assets were estimated able standard for return on investment requires appropriate at only $74.8 million. Despite 3 hepatitis C virus (HCV) drugs and complete information. in development at Pharmasset (with only $62.4 million attrib- The authors’ use of Pharmasset’s sales price as a proxy uted to sofosbuvir development in 2009-2011 ), Gilead ac- for the cost of developing sofosbuvir greatly overestimates counted for almost http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png JAMA American Medical Association

Costs of New Treatments for Hepatitis C Infection

JAMA , Volume 312 (20) – Nov 26, 2014

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Publisher
American Medical Association
Copyright
Copyright 2014 American Medical Association. All Rights Reserved. Applicable FARS/DFARS Restrictions Apply to Government Use.
ISSN
0098-7484
eISSN
1538-3598
DOI
10.1001/jama.2014.14337
pmid
25423228
Publisher site
See Article on Publisher Site

Abstract

Letters 3. US Securities and Exchange Commission. Pharmasset Inc: SEC filings. http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany To the Editor In seeking to rationalize sofosbuvir pricing, Drs &CIK=0001301081&owner=exclude. Accessed July 22, 2014. Brennan and Shrank assumed $11 billion in development costs. Even if this were reasonable, Gilead’s $2.27 billion first quar- To the Editor Drs Brennan and Shrank raised several impor- ter revenue would suggest that the price was grossly inflated. tant questions regarding the imperative of balancing indi- But the development of sofosbuvir did not cost that much. vidual and societal benefits of certain new medications against Normally, a commercial sale includes an amount for in- their large financial expense. Equitable return on investment tangible assets, such as goodwill. In the acquisition of Phar- is commonly deemed acceptable; however, defining a reason- masset by Gilead for $11 billion, these assets were estimated able standard for return on investment requires appropriate at only $74.8 million. Despite 3 hepatitis C virus (HCV) drugs and complete information. in development at Pharmasset (with only $62.4 million attrib- The authors’ use of Pharmasset’s sales price as a proxy uted to sofosbuvir development in 2009-2011 ), Gilead ac- for the cost of developing sofosbuvir greatly overestimates counted for almost

Journal

JAMAAmerican Medical Association

Published: Nov 26, 2014

References