Intended for healthcare professionals


Betting on hepatitis C: how financial speculation in drug development influences access to medicines

BMJ 2016; 354 doi: (Published 27 July 2016) Cite this as: BMJ 2016;354:i3718
  1. Victor Roy, doctoral researcher,
  2. Lawrence King, professor of sociology and political economy
  1. Department of Sociology, University of Cambridge, Cambridge, UK
  1. Correspondence to: V Roy vr260{at}

Victor Roy and Lawrence King argue that the acquisition strategies of drug companies magnify development costs and leave the public paying twice—for research and high priced medicines

Sofosbuvir based medicines have marked an important breakthrough for patients with hepatitis C infection, offering cure rates of over 90%. The virus is a leading infectious killer globally, disproportionately affecting vulnerable groups such as people who inject drugs or have HIV/AIDS.1 Even after discounts offered from a US list price of about $90 000 (£70 000; €80 000) per three month treatment course, however, the cost of these drugs, manufactured by Gilead Sciences, has challenged government budgets and led to rationing. Sofosbuvir’s pricing has been at the centre of a global debate over the affordability of prevailing systems of drug development, and the US Senate conducted an 18 month investigation into Gilead’s pricing strategy and its consequences for health budgets and patient access.2

One argument for the high prices has been that the curative drugs represent a major advance in value to patients and health systems. They are indeed more cost effective than many expensive medicines that provide only marginal benefit. Yet the company’s ability to charge high prices ultimately relies on monopoly protections via patents, which the industry has long argued are necessary to encourage costly research and development. Critics, however, charge that these costs are exaggerated.3 4 5

We use the case of hepatitis C to highlight another dynamic missing from the debate: the financial model driving large companies and their shareholders. To maximise growth in earnings, large companies like Gilead often enter expensive bidding contests to acquire companies with promising compounds. Subsequent profits are then directed back to shareholders rather than invested in early stage research. This speculative cycle propels the prices of medicines and impedes affordable access for both …

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