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Our Capitalism Is As Extreme As Our Politics

October 20, 2014

By Joe Rothstein

Each year an estimated 180 million people worldwide, including more than 3 million Americans, are infected with hepatitis C, a virus that can last a lifetime and lead to serious liver problems and death. In the U.S., hepatitis C is the most common reason for liver transplants.

Here’s the good news about hepatitis C: There now seems to be a pill that actually cures it.

Here’s the bad news: In the U.S. each pill costs $1,000. A minimum 12-week course costs $84,000. Add in supplementary drugs and you’re at $100,000. Some heavily infected individuals require treatments that last 24 to 48 weeks.

The drug is marketed by Gilead Sciences under the brand name “Sovaldi.” This year alone Gilead’s Sovaldi sales are expected to top $10 billion.

Here are some things worth knowing about Gilead and its Sovaldi product.

--Gilead didn’t spend years of expensive and risky research trying to develop Sovaldi. Gilead bought the patent for $11 billion; it will recoup near all of its investment in the product’s first sales year.

--The drug was developed by a company at Emory University, largely with taxpayer dollars in the form of research grants.

--Gilead justifies the high cost by pointing out that once a Sovaldi user is cured he or she no longer needs to take the drug, unlike the case with chronic conditions like high blood pressure and diabetes. In other words, because the company is unable to milk a person’s health problems over the span of years or decades, Gilead needs to make a lot of money quickly.

--Gilead transferred its Sovaldi patent to the company’s Irish subsidiary, avoiding hundreds of millions of dollars in U.S. taxes.

To sum up. We, the taxpayers helped develop Sovaldi. We the taxpayers will pay higher insurance costs because those costs will be passed on by insurers. We the taxpayers will pay the full cost of drugs used to treat prisoners and many others who are chronically infected, a high percentage of whom are infected because of needle use and blood transfusions. Meanwhile Gilead pockets tens of billions.

Not angry yet?

Since manufacturing costs for a 12-week course of Sovaldi are estimated at only $136, Gilead sells at nearly half the price in Canada, a country that pays a lot more attention than the U.S. to drug company exploitation. India, with its 12 million hepatitis C patients, will pay only $900 for a 12-week course.

Solvadi is a typical “your money or your life,” story all too common under our current form of capitalism. Where “shareholder value” trumps all other considerations, exploiting taxpayer research, gaming the tax system, milking the health market for every dollar, peso or drachma is considered sharp business management.

Under these rules it’s okay for pharmaceutical companies to stop U.S. citizens from buying drugs at half the cost in Canada because of “health and safety” considerations, but it’s okay for those same companies to manufacture their products in every other continent using the cheapest labor force they can find.

Solvadi is not an isolated case. An estimated half of the scientifically innovative drugs now on our pharmacy shelves were developed from research at universities and biotech firms, not drug giants. Yet we tolerate the myth that the Medicare can’t use its massive bulk negotiating power to lower U.S. drug costs because it would result in less money for research.

Our public conversation is ripe with discussions about how extreme our politics have become. But what about our corporate business systems? They’ve become just as extreme and more dangerous. When “shareholder value” is the beginning and end of the conversation, what happens to employee value, consumer value, societal values?

Maybe the next big thing in drug making to come out of a university research center should be a pill that helps those in corporate America remember that “We the People of the United States” has meaning beyond their own quarterly profits.

(Joe Rothstein can be contacted at

Joe Rothstein is a political strategist and media producer who worked in more than 200 campaigns for political office and political causes. He also has served as editor of the Pulitzer Prize-winning Anchorage Daily News and adjunct professor at George Washington University's Graduate School of Political Management. He has a master's degree in journalism from UCLA. Mr. Rothstein is the author of award-winning political thrillers, "The Latina President and the Conspiracy to Destroy Her," and "The Salvation Project."