The introduction of AbbVie’s hepatitis C drugs in 2014 forced Gilead’s hand in the fight for market dominance in hepatitis C. A similar dynamic is now playing out between Eli Lilly and Novo Nordisk in the obesity space, with some key differences.
Almost 10 years before Novo Nordisk and Eli Lilly’s cutthroat battle for control of the obesity market, AbbVie and Gilead duked it out over a highly effective class of hepatitis C drugs.
As Novo and Lilly’s drug prices come on full display in the deal announced at the White House earlier this month. This unprecedented moment, where Lilly and Novo are slashing the price of their GLP-1 drugs well before they have generic competition, had some experts looking back on the moment with Gilead and AbbVie—a same but different moment from the recent past.
“It’s the closest analogy we have to this. But there’s some important differences,” Sarah Emond, CEO of drug pricing watchdog the Institute for Clinical and Economic Review (ICER), told BioSpace.
So let’s go back to 2013.
First on the scene in December of that year was Gilead with Sovaldi, which included the active ingredient sofosbuvir and showed high cure rates over a 12-week treatment course. The wholesale acquisition cost of the drug was $28,000 for a 28-pill bottle.
“That was a situation where you had a $1,000 pill—$1,000 a day,” Morningstar analyst Karen Andersen remembered. (Gilead did offer an assistance program with a $5 co-pay for eligible patients.)
The FDA approved a second Gilead hep C treatment just under a year later in October 2014. Harvoni, a combination of sofosbuvir and ledipasvir, offered a shorter treatment time for patients with certain genotypes of the virus. Gilead did not announce the price at the time, but ICER said a 12-week course had a list price of $95,000.
Gilead enjoyed wild market success—and blowback for the cost of the treatment. Then came AbbVie. AbbVie launched Viekira Pak months after Haravoni.
“The minute you had a viable competitor—Gilead started seeing competition from AbbVie—that pricing went from . . . $80,000 or so to $20,000 for a cure,” Andersen said.
In announcing the U.S. market approval of Viekira in December 2014, AbbVie noted the drug’s high cure rates and shorter duration of treatment. While a price was not named, Bloomberg News reported a list price of $83,319, a 12% discount to Gilead’s Harvoni. (Like Gilead, AbbVie offered patient assistance, promising access to Viekira Pak for just $5 a month.)
Insurers quickly took note. A few days after the FDA’s greenlight, Express Scripts secured a discount to that price with AbbVie and offered to carry Viekira Pak over Harvoni, which would be dropped for most patients at the start of 2015.
At the time, Express Scripts Chief Medical Officer Steve Miller noted that patients in France were paying $51,373 for Sovaldi, according to a report from FirstWord Pharma. Analysts projected $2.9 billion in first-year sales for Viekira Pak, which requires patients to take six pills a day instead of one.
Gilead agreed to bring the price of Sovaldi and Harvoni down in February 2015, offering a 46% discount off the original list price. ICER revised its rating for the drugs to “high value” for most healthcare systems.
Then-Gilead CEO John Milligan touted Harvoni’s superiority early on. “The market doesn’t think they are comparable. There’s a clear preference for Harvoni over the Viekira Pak,” Milligan said at a conference in June 2015.
But trouble emerged in AbbVie’s franchise. One of Viekira Pak’s active ingredients, ribavirin, proved to be difficult for patients to tolerate. Common side effects included hemolytic anemia, itchiness, fatigue and upper respiratory symptoms. The ingredient was quickly recommended to be used only for the most severe cases of hep C. AbbVie updated the label for Viekira Pak in October 2015 to warn of liver risks and recommend closer patient monitoring.
Meanwhile, the company kept working in the clinic on a better drug. AbbVie’s Mavyret, which dropped ribavirin in favor of a cocktail of an NS3/4A protease inhibitor glecaprevir and an NS5A inhibitor pibrentasvir, was approved in August 2017. The drug, which rendered the virus undetectable in clinical trials, was developed with Enanta Pharmaceuticals. AbbVie listed the drug at $26,400 for an eight-week treatment.
The drug decimated Gilead’s hep C sales, causing the company to lower its profit guidance for the franchise, according to a February 2018 report in Fierce Pharma. The price for Sovaldi was about $28,000 per month and Harvoni was $31,500, compared to Mavyret’s $13,500.
The hep C franchise combined collected $3.7 billion, down from 9.1 billion the year prior, according to Gilead’s year-end 2018 earnings report. The company attributed the decline to lower average net selling price and lower volume of sales for Harvoni and other medicines in the portfolio “as a result of increased competition and lower patient starts.” By 2019, the company stopped reporting sales of the two drugs individually.
AbbVie’s hep C franchise never reached anywhere near the heights of Gilead’s, with Mavyret peaking at $3.4 billion in 2018.
Back to 2025
The hep C battle is the only time in recent memory that Andersen or Emond can remember price coming into play so early in a drug’s lifecycle. The typical path is for a branded medication to enjoy years of exclusive market success with a high price—unless, of course, a better rival drug comes along and supplants it. But typically, efficacy or some enhancement in the treatment paradigm is what changes the market, not price.
These same dynamics are playing out right now between Novo and Lilly—two mega pharmas that aren’t strangers to mutual competition, Andersen said. But this time is different.
Two weeks ago, both Novo and Lilly’s CEOs appeared at the White House to announce a drug pricing deal with President Donald Trump that would bring their GLP-1 medications down to around $350 per month. It wasn’t a huge change, as both companies have been offered direct-to-consumer (DTC) options for months that provide the drugs at a steep discount to the list prices.
Lilly’s Zepbound initially had a list price of $1,059.87 per month when it launched at the end of 2023. Single-dose vials can now be purchased at Walmart through LillyDirect for $349 per month, according to a recent announcement.
The current list price for Wegovy in the U.S. is $1,349.02 for a 28-day supply, according to Novo. But the manufacturer offers rebates that can bring down the cost to about $499 a month. As is typical for such DTC platforms, patients must pay out of pocket. While not all commercial insurance covers the weight loss medication, Novo says that through payers that do, patients may pay just $224 per month, or nothing at all.
Emond said that the two markets are fairly similar, in that hep C and obesity are both public health priorities. Both market battles started with high list and net prices, with Novo enjoying first-entrant advantage early on. Even when Lilly entered the picture, the prices stayed high.
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“Both drugs are wildly cost effective. And a similar thing happened with the hepatitis C drugs, as we saw competition come in,” Emond said.
But with GLP-1s, both the U.S. government and private insurance companies are largely declining to cover treatment for the weight loss treatments, leading to a fast-moving consumer market where patients self-pay for access. Meanwhile, the pharmas have been contending with significant pressure from the Trump administration to lower prices across their portfolios, with the president particularly targeting the weight loss drugs.
“For years they’ve been competing in diabetes and they’ve been competing in obesity. So there’s already in the backdrop that typical competition for them,” Andersen said. “But the more policy side of this, and just the lack of insurance coverage, I think, are the things that made this very primed for significant reform of the direct-to-consumer side and seeing these lower prices.”
Hep C is also a one-time treatment that is potentially curative, whereas GLP-1s require long-term maintenance dosing.
“These obesity medicines are for a chronic condition likely needing to be taken for a lifetime and so that represents a little bit different math when you think about budget impact,” Emond said. At ICER, he added, “that’s where we’re all spending our time, trying to think about how to introduce these drugs in an affordable way.”
ICER has determined that the obesity drugs are cost-effective—a strong vote of confidence for any treatment in pharma. The problem is that the potential market is just so huge that affordability means something completely different when it comes to weight loss medications.
“It’s not that they’re not priced to value—they are. It’s just that the number of eligible patients makes it really hard to introduce them in an affordable way,” Emond said. “We continue to just have a lot of firsts when it comes to the obesity medicines for us as a drug pricing ecosystem.”
