As the criticism continues over the price of Gilead Sciences’ hepatitis C treatment Sovaldi, the chief executive of the drug industry’s trade group in the USA has warned of the error in payers looking at price alone.

Across the Atlantic, insurers in particular have been queueing up to complain about the fact that a 12-week course of Sovaldi (sofosbuvir) costs $84,000. There have also been gripes that the drug, which has shown stunning cure results, is $20-$25,000 cheaper in Europe.

John Castellani of the Pharmaceutical Research and Manufacturers of America has wreathed into the debate, saying that “it is penny wise and pound foolish to focus solely on the price of a new medicine while completely ignoring the value it provides to patients and the health care system broadly”. He noted that “curing hepatitis C not only dramatically improves patients’ lives, but has the potential to save the US healthcare system as much as $9 billion per year”.

He explains this figure by noting that Sovaldi, and the other hepatitis C drugs that are moving closer to approval, are “preventing expensive hospitalisations and avoiding thousands of liver transplants that routinely cost over $500,000 each”. Mr Castellani goes on to state that the health improvements and cost savings new meds provide “explain why, despite repeated claims to the contrary, prescription drug spending continues to be a small and declining share of overall healthcare cost growth – a reality that often gets ignored in the public debate about drug costs”.

The latter “is being fueled by the fact that we have an outdated insurance model that is forcing patients to pay an ever-growing share of their prescription drug costs”, he added. “We have a Blockbuster insurance model in a Netflix world and patients are being harmed as a result.”