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How Gilead arrived at US$1,000 a pill price

What sets pricing is not R&D costs but potential insurer reaction and the chance to set a price benchmark: report

New York

FROM the start, the miracle drug was expected to carry a high price tag: US$36,000 to treat each patient.

Over the two years leading up to the medicine's 2013 launch, Gilead Sciences Inc executives and advisers inched the number higher, to about US$65,000, then to US$81,000, then to US$84,000 - or US$1,000 a pill for the 12-week treatment - as they homed in on a price that was just below where they thought insurers would add restrictions for the breakthrough hepatitis C remedy.

One Gilead vice-president indicated he knew the company was courting controversy. "Let's hold our position whatever competitors do," he wrote, "or whatever the headlines". They misjudged the reaction from insurers,...

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