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U.S. lawmakers have asked Gilead Sciences Inc to explain the $84,000 hefty price tag of its new hepatitis C Drug named Sovaldi. Reportedly, the drug is encountering resistance from health insurers and state Medicaid programs. 

Although in some cases the treatment has been shown to cure many patients, agencies are balking as the therapy would cost them in billions of dollars if they agreed to cover it for their clients. 

In response, the company has proposed a system of worldwide tiered pricing based on country's per capita gross national income. For instance the treatment in U.K. would cost about $57,000 while in Germany the same treatment will be of around $66,000.

Reports claim that Sovaldi has been a breakthrough in the treatment of the serious liver disease and it has managed to raise cure rates but cutting treatment duration with fewer side effects. However, critics are skeptical about the price of $1,000 each.

"The costs are likely too high for many patients, both those with public insurance and private insurance," the committee letter, addressed to Gilead Chief Executive John Martin, said, according to Reuters. It added, "The extraordinarily high cost of your drug raises additional concerns because of the role of the federal government in speeding up its approval."

Meanwhile, Gilead on Friday confirmed that it had agreed to supply the new drug in Egypt - which has the world's highest prevalence of the virus due to use of contaminated needles in the 1970s - at around $900 for a 12-week course of therapy, or about 1 percent of the U.S. price, reported Reuters.