Coca Cola Economics Health Economics Healthcare Equity Hepatitis C Public health Policy

What can Big Pharma learn from Coca Cola?

Growing up in Ghana I always knew Coca Cola was a Ghanaian Company and would have continued to believe that until Coca Cola refused to honor economic sanctions on the Apartheid South African government. The big Beverage Company continued business in South African amid protests in Africa and pressure from Black Activist in the US. That was when I learned that Coca Cola Company was a big multinational Company with subsidiaries across the world. Coca Cola is so good at this local integration that many immigrants to the US would tell you that Coca Cola from their country of origin tasted different and was somehow special. There is actually a thriving market for Mexican Coca Cola in the US today.

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For the purpose of this post I am not really interested in the political stance of the company nor the taste of Mexican Coca Cola. I would like to talk about an accident of fate that may have contributed to Coca Cola’s worldwide success; pricing. Most of us maybe too young to remember this, but for 70 years the price of a bottle of coke was 5 cents. This was due to a fixed contract between Asa Candler the founder of the Coca Cola Company and the Bottling Plant.  This fixed contract meant that the only way Coca Coca could increase its’ revenue was to increase marketshare. In fact the company was so successful in that venture that even after the contract was renegotiated they still maintained the nickel for a coke bottle for several years.

The current average cost for a treatment course of Hepatitis C treatment in the United States today ranges from $26,400 to $94,500. This translates to about $414 a pill for Mavyret to $1125 a pill for Harvoni. The wide variability in cost being partly related to the pharmaceutical companies who developed these drugs. This is a situation that I must admit I have never understood,!how did these drug companies come up with their prices? I know some would start talking about Research and Development costs but that is just not the whole story.

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Source: Hepatitis C Online; University of Wisconsin

On the pricing of Direct Acting Antivirals for Hepatitis C called DAAs by most providers in the field most believe that pharmaceutical company pricing had very little to do with cost of research and development and more to do with profit. The development of these medications owe a lot to the development of Antiretrovirals for HIV and some of these agents were developed from already available platform for known antiretrovirals. The impact of the extremely high cost of these medications which are currently believed to be among the most expensive oral medications in history are reflected by the different barriers that some insurance companies utilize to limit treatment. Whilst access to these medications continues to be difficult in most states there are many who still believe that even at these high prices treatment of chronic hepatitis C is still cost saving.

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Source: Hepatitis C Online; University of Wisconsin

As more individuals who have chronic hepatitis C are treated many researchers are realizing that conditions like Diabetes and heart attacks are less likely to occur in those who are successfully treated compared to the untreated. It is not clear whether these differences are directly related to the hepatitis virus but that is what most clinicians believe. We already know that risk of progression to cirrhosis and liver cancer is significantly reduced and is almost non-existent for those treated in early stage disease.

Whilst the quoted public prices of these agents stay high there are various contracts and agreements that most pharmaceutical companies have established with insurance companies, the US Department of Veterans Affairs and different nations that govern the prices paid by these groups. In most cases the terms of these agreements are not available to the public. Countries like Australia, Mongolia and the former Soviet Republic of Georgia have agreements that have allowed these countries to treat many of their people afflicted with Hepatitis C. The VA in the US has utilized multiple contracts with different pharmaceutical companies to enable them treat almost all their patients with Hepatitis C that are willing to receive treatment. Louisiana and Washington State are currently in the process of developing deals described as Netflix Style contracts with specified pharmaceutical companies to have unlimited access to Hepatitis C drugs to treat their patients.

Whilst all these agreements are good and allow access to various sectors of the market, if these companies focussed on volume they would most probably reduce their production costs and still make a tidy profit from a worldwide roll out of medications to low and middle income countries who harbor most of the global Hepatitis C burden.

The World Health Organization has targeted 2030 for elimination of viral Hepatitis. To achieve this goal access to medications must be better than what pertains currently and more primary care providers should be involved in the treatment of Hepatitis C.

By Dr. Leonard Sowah, a Physician based in Baltimore, Maryland.

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holisticphysician
A physician providing primary medical care to patients across the lifespan

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