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Home Publications Blogs Beat the Press More Confusion on Sovaldi and Government Granted Monopolies at the Washington Post

More Confusion on Sovaldi and Government Granted Monopolies at the Washington Post

Saturday, 26 July 2014 05:25

Sometimes it seems like we are living in the Bizarro World when it comes to talking about drug prices. This is one of those times.

The Washington Post's Wonkblog had a Q& A on Sovaldi, the new drug for Hepatitis C that is being sold for $84,000 in the United States. In the final answer about the price of the drug the piece tells readers:

"Sovaldi is cheaper in countries where the government sets drug prices, ranging from $900 in Egypt to $66,000 in Germany."

This is almost the opposite of reality. The price is very high in the United States because the government gives Gilead Sciences (the drug's patent holder) a complete monopoly on the drug's sale. The price is low in Egypt because there is no patent monopoly and manufacturers are free to sell generic versions of the drug. That means the price in Egypt is closer to a free market price. The price in the U.S. is a price that is high because the government will arrest competitors.

Comments (3)Add Comment
written by Last Mover, July 26, 2014 6:00

Any economist, not to mention any sock puppet for the 1%, knows why Sovaldi is sold for $900 in Egypt. It's the result of deregulation under Arab Spring uprisings that restored free market capitalism to countries run by evil dictators.

America is still waiting for this to happen in its own country.
Maybe We Should Adopt Egypt's Standards for Patents
written by Robert Salzberg, July 26, 2014 6:43
Egypt didn't issue a patent because they found Sovaldi wasn't a new novel compound. Wouldn't it be great if the U.S. updated their patent laws to match those of Egypt?

written by AlanInAZ, July 26, 2014 9:56
The Egyptian patent refusal is very similar to the Indian patent refusal - claiming no novelty. The Indian patent office claimed a very similar drug was initially developed at the University of Cardiff for cancer treatment and therefore does not satisfy the novelty requirement. I believe this is only partially true and could well be driven by the benefit to India's generic drug industry. The Cardiff drug was obtained by Bristol Myers through acquisition but was withdrawn from trials because of a mortality. The Gilead molecule has a different mode of action and successfully completed trials - eventually gaining approval. I suspect that if Gilead was an Indian Company the patent would have been approved in India.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.