The largest US pharmacy benefits management organisation has secured a cheaper price for AbbVie’s recently approved all-oral hepatitis C treatment at the expense of Gilead’s Sovaldi (sofosbuvir), as the drug pricing war takes on a new dimension in the United States.
On the day Viekira Pak (ombitasvir/paritaprevir/dasabuvir/ritonavir) gained FDA approval Express Scripts said it would now favour AbbVie’s cheaper pill and no longer cover Gilead’s rival treatments.
This comes after the firm tried and failed for nearly a year to win a deeper discount from Gilead for Sovaldi and its new all-oral hep C treatment Harvoni (sofosbuvir/ledipasvir).
Investors reacted badly to the news and Gilead shares dropped 13 per cent, or about $14.54, in Monday trading to $93.88.
Gilead gained US approval for Sovaldi (sofosbuvir) at the start of the year and it quickly became the fastest-selling medicine in the world, making more than $8.5bn in its first three quarters.
Its new drug Harvoni, which gained FDA approval in October, combines Sovaldi with its new NS5A inhibitor ledipasvir but does not require Roche’s injectable drug Copegus (ribavirin).
But Sovaldi costs $84,000 (£53,600) for a full 12-week course of treatment and an additional cost of around $8,000 is needed to fund the use of an injectable drug that must be used with it. Harvoni, meanwhile, comes with a $94,500 price tag.
AbbVie said its drug would cost $83,319 per patient for a standard 12-week treatment and this discount, especially when compared to Harvoni, is what prompted Express Scripts’ decision to drop Gilead’s pills.
But the firm has managed to go further and cut a deal with AbbVie for a significantly lower price than Gilead’s treatment in order to get Viekira Pak on Express Scripts’ National Preferred Formulary, a list of approved and covered drugs for 25 million Americans.
The firm did not provide a specific dollar figure, but AbbVie told Reuters that it had ‘narrowed the price gap’ to resemble what Western European countries pay for Sovaldi, which runs from $51,373 in France to $66,000 in Germany.
Gilead has caused a storm in the US over its pricing for Sovaldi and when it was first approved in January this year hundreds of patients picketed the company, claiming its pricing scheme was unethical.
The situation was more starkly laid out when Gilead agreed deals around the world that saw its price tag lowered dramatically, with the lowest cost being just $900 in Egypt.
US politicians, insurers and workers’ unions have also lambasted the price they must pay, saying it is simply unaffordable. In fact they estimate that if everyone in the US who could receive the drug did, this would cost the country $300bn – nearly the same as its total annual drugs budget.
AbbVie has understood both the controversy and the market opportunity, and seemingly has made the most of being second to market with its deal with the insurer.
But analysts still see Harvoni winning out in the end, with the drug expected to make around $10bn next year, with Viekira Pak estimated to make just $3bn, given the slightly better efficacy of its rival in clinical trials.
This new deal may however tip the balance toward AbbVie, but it will not be until the second quarter of next year that analysts can see just what Express Scripts’ switch will do for sales for both medicines.