January 6, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Foster City, Calif.-based Gilead Sciences, Inc. , stock prices jumped more than 2 percent Monday after the company announced it inked an exclusive rights deal with CVS Health Corp. to exclusively sell Hepatitis C medications Harvoni and Sovaldi. This is the latest chapter in a pricing and distribution battle between Gilead and Chicago-based AbbVie Inc. .
On Dec. 22 Express Scripts, the largest pharmacy benefit manager in the U.S., announced it had reached an exclusive agreement with AbbVie for sales of its hepatitis C treatment Viekira Pak. Express Scripts also announced it would no longer cover Gilead’s Sovaldi and Harvoni.
None of the treatments are particularly inexpensive. Gilead’s Sovaldi treatment ran around $84,000, or about $1,000 per pill. Harvoni’s 12-week course of treatment cost around $94,5000. Viekira Park’s price for a 12-week course of treatment is $83,319.
“We have said before that a price war in the HCV market, with only two major competitors, Gilead and AbbVie, does not make sense for either competitor or for the future market potential of the category,” said Geoffrey Porges, a biotech analyst with Sanford Bernstein, in a December note. “However, it appears that AbbVie has indeed chosen to start a price battle. AbbVie is likely to have had to pay dearly for the privilege of exclusive access plus no restrictions based on fibrosis scores.”
CVS, which operates more than 7,800 retail pharmacies and 900-plus walk-in medical clinics, indicated it will fill prescriptions of Harvoni for beneficiaries on its Medicare, Medicaid and other drug benefit plans. It will make Viekira Pak available to its patients if they receive a medical exception or prior authorization.
A report published in December by the CVS Health Research Institute expressed concern that the Hepatitis C pricing battle was a sign of things to come. They “signal a growing and costly trend in treating chronic medical conditions with specialty medicines,” said Troyen Brennan, CVS chief medical officer in the report. “Hepatitis C is just the beginning, and we need to prepare now for the time when large numbers of patients could be treated effectively with high-cost medicines for a variety of common and more complex conditions.”
Currently Gilead Sciences stock is selling at $98.94 per share, up from a low of $93.39 yesterday. Despite a drop yesterday, AbbVie’s shares are currently selling for $65.48, up from a low yesterday of $63.93.
