Gilead strikes Hepatitis drug pricing deal in the US

Gilead Sciences has struck back against its rival AbbVie in a budding marketing war in the United States over costly hepatitis C drugs, winning exclusive access to many patients whose prescriptions are managed by CVS Health.

CVS Health, the second-largest pharmacy benefits manager in the US, said that it would make Gilead's drugs, Harvoni and Sovaldi, the exclusive option for patients on its commercial drug list, as well as for patients it manages on health care exchanges, Medicare Part D and Medicaid.

The decision partly counteracts a decision made last month by Express Scripts, the largest pharmacy benefit manager, to make AbbVie’s Viekira Pak the exclusive option for most patients in its main commercial plan covering 25 million people.

AbbVie earned that position by offering what Express Scripts characterised as a significant discount below Viekira’s list price of $83,319 for a typical 12-week course of treatment.

Express Scripts’ move caused a steep drop in Gilead’s shares and in many other biotech stocks because it suggested that pharmacy benefit managers were becoming more willing to limit patient options to procure discounts from drug companies, limiting the ability of drug manufacturers to charge high prices.

But on Monday, after CVS’ decision was announced, Gilead’s shares rose 2 per cent to $96.79 while AbbVie’s shares fell nearly 2 per cent to $64.68.

Geoffrey Porges, biotechnology analyst at Sanford Bernstein, said that, once Gilead was excluded by Express Scripts, it had a strong incentive to strike a deal with CVS “in order to ensure a reasonable level of access and also to avoid overblown negative perceptions of poor access”.

Gilead ignited protests by pricing Sovaldi, its first drug for hepatitis C, at $84,000 for a 12-week course of treatment, or $1,000 per daily pill. Gilead’s newer Harvoni has a list price of $94,500 for the 12 weeks of treatment, or $1,125 per daily pill.

While doctors have hailed both drugs as breakthroughs, some health plans, state Medicaid programs and prison systems said they could not afford to treat everyone at those prices. More than 3 million people in the United States are infected with the hepatitis C virus, which gradually destroys the liver.

The hope was that, when AbbVie won approval for Viekira Pak in December, competition would drive down prices. That appears to be happening, though to what extent is not known because pharmacy benefit managers do not reveal how much of a discount they are getting.

CVS said in a statement that it goal “was to create the lowest net-cost solution for the entire population of patients” with hepatitis C.

– Copyright New York Times 2015