For the estimated 70,000 South Carolinians who suffer from chronic hepatitis C, here's some good news.

The FDA approved a drug late last year called Sovaldi that's proven more effective than anything else on the market in treating the potentially deadly virus.

Gilead Sciences Inc., the drug's manufacturer, boasts 80 to 90 percent of hepatitis C patients were cured after completing a 12-week daily course of Sovaldi pills.

But here's the hitch: Each of those pills costs $1,000. A recommended 12-week course of treatment costs an estimated $84,000 per patient. Some patients may need to take a second course, raising the price tag to $168,000.

"It's about twice as expensive as the current drug treatment," said S.C. Medicaid Director Tony Keck.

While doctors that treat chronically ill hepatitis C patients are excited by Sovaldi's results, health insurance companies around the country are trying to figure out how they can afford to cover its cost. The burden may fall even harder on state and federal budgets, particularly state Medicaid programs, than it does on the private sector because hepatitis C disproportionately effects disadvantaged populations, Keck said.

"Are you willing as a society . to pay $84,000 for that cure? It's really in-your-face cost-benefit analysis and it's making a lot of people really uncomfortable," he said.

In January, the AIDS Healthcare Foundation urged state Medicaid providers to deny coverage for the drug until Gilead agrees to lower the price. The group, which provides HIV testing and prevention services, argues that Sovaldi's price "will unnecessarily drive up health care costs and limit access to potentially lifesaving care."

"AHF believes that the price Gilead is charging for Sovaldi is not remotely justified. For one, it is exponentially more expensive than medications for other severe chronic conditions." The group noted that Sovaldi costs 1,100 percent more than Gilead's most expensive HIV drug, Stribild, which costs $80 per pill.

About 25 percent of people with HIV infections also are infected with hepatitis C.

An analysis commissioned by the S.C. Medicaid agency shows that covering the cost of Sovaldi for some of the state's Medicaid patients who have been diagnosed with hepatitis C could cost anywhere from about $17 million to $500 million.

Gilead announced in mid-April that it sold more than $2 billion worth of Sovaldi during the first quarter of 2014. The South Carolina Hepatitis C Coalition estimates 70,000 people in this state suffer from chronic hepatitis C. Between 3 and 4 million Americans live with the disease.

It is usually spread when blood from an infected person enters someone else's bloodstream, most commonly by using shared needles or other contaminated drug paraphernalia, according to the state health department. It can also be contracted through sexual intercourse.

While approximately 15 percent of all hepatitis C infections will clear on their own, 85 percent of infections will eventually develop into a chronic condition, which can cause liver disease and death, said Dr. Sean Boger, a physician at the Medical University of South Carolina.

"There are more patients dying from hep C than from AIDS," Boger said.

There are six different subtypes of hepatitis C, he explained, the most common of which does not respond well to some of the older treatments - one of the reasons he is optimistic about Sovaldi's potential.

Until late last year, the standard treatments required taking up to 12 pills a day, alongside antiviral drug injections that can cause flu-like symptoms, an approach that cured only about 75 percent of patients.

While Boger has not administered Sovaldi to any patients at MUSC, he said he understands Gilead offers a generous rebate to cover the drug to patients who cannot afford the sticker price.

Patti Embry-Tautenhan, a spokeswoman for BlueCross BlueShield of South Carolina, said the company already covers the cost of Sovaldi for pre-approved patients, but she did not know how many BlueCross patients are eligible for the treatment.

"Sovaldi falls into what's known as specialty pharmaceuticals," Embry-Tautenhan said. "We do cover it with prior authorization from the requesting physician to ensure that the member/patient meets the prescribing criteria and is a good candidate for the drug."

This benefit potentially extends to both the company's private insurance patients and some Medicaid patients who are enrolled in a BlueCross BlueShield Medicaid managed care plan, she said.

"Sovaldi is perfect example of our challenge as a health insurer," she said. "Our goal is keeping coverage as affordable as possible while maintaining access to the most current and effective treatments. It is well established that pharmaceuticals are one of the major drivers of rising health care costs, and new drugs and therapies allow us to live healthier lives, but there is cost involved."

The S.C. Medicaid agency contracts with a handful of private companies, including BlueCross BlueShield of South Carolina, to provide coverage for some Medicaid patients through a managed care plan. Keck said the agency does not intend to immediately raise the rates it pays these companies to cover Sovaldi's cost because there are still too many unknowns, including which hepatitis C patients really need this treatment.

"Obviously the drug company would like everyone diagnosed with hepatitis C to get this drug," he said. "It's really a raging debate right now."

Editor's note: An earlier version of this story reported an incorrect amount for Gilead's first quarter Sovaldi sales.

Reach Lauren Sausser at 937-5598. The Associated Press contributed to this report.