January 9, 2015
By Mark Terry, BioSpace.com Breaking News Staff
The price war for pricy hepatitis C treatments took another turn today with Gilead Sciences, Inc. signing a definitive agreement with health insurance company Anthem, Inc. Anthem has agreed that Gilead’s Harvoni will be the primary treatment for genotype 1 hepatitis C, citing better pricing compared to AbbVie ’s Viekira Pak.
“We were able to achieve a very competitive rate and a freeze on retail pricing for 2015,” an Anthem spokesperson said in a statement. “That does favorably impact plan costs for 2015.” Both treatments are enormously expensive: Gilead’s Sovaldi treatment ran around $84,000, or about $1,000 per pill. Harvoni’s 12-week course of treatment cost around $94,500. Viekira Pak’s price for a 12-week course of treatment is $83,310.
This follows a Jan. 7 announcement that Forest City, Calif.-based Gilead had completed an exclusive rights deal with CVS Health Corp. to exclusively sell its hepatitis C treatments Harvoni and Sovaldi.
On Dec. 22 Express Scripts, the largest pharmacy benefit manager in the U.S., inked an exclusive agreement with AbbVie for its hepatitis C treatment, Viekira Pak. In addition, Express Scripts announced it would no longer cover Gilead’s Sovaldi and Harvoni.
Anthem also cited specific clinical aspects of Harvoni that they felt were better than the Viekira Pak. Harvoni is a once-a-day treatment. The Viekira Pak is typically a pill that needs to be taken four to six times daily. In addition, Harvoni is a standalone medication that does not require the use of interferon or ribavirin. Both can cause serious side effects.
It is notable that Express Scripts Holding Company runs Anthem’s list of covered drugs. Employers that use Anthem have around 30 million people on the coverage plan in the U.S., making it one of Express Scripts’ largest customers. Analysts estimate that Express Scripts covers about 8.5 to 13.5 million customers for Anthem.
“We see the Anthem deal as positive,” wrote Deutsche Bank analyst Robyn Karnauskas in a research note, “however note that discounts are now key to play in the HCV space.”
“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 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.”
