Provided by Bloomberg News
By Drew Armstrong Dec 10, 2013 4:07 PM ET
The biggest U.S. drug benefits manager plans to start a price war over a new generation of hepatitis C treatments that will cost $1,000 a pill, in a bid to drive down spending on the medicines.
Express Scripts Holding Co. (ESRX) will pit Gilead Sciences Inc. againstAbbVie Inc. (ABBV) and other drugmakers when the new treatments come to market next year or early in 2015. The new hepatitis C pills are projected to be among the biggest pharmaceutical sellers ever. While Gilead’s once-a-day drug may be the easiest to use, Express Scripts might block the pill from reimbursement if the competitors accept lower pricing.
“We will identify which drugs can be pitted against each other and make some really tough formulary decisions,” Steven Miller, chief medical officer of St. Louis-based Express Scripts, said in a telephone interview. “If the difference in convenience cannot be demonstrated to have a difference in outcomes, we often recommend coverage of the equally effective, less-convenient product.”
Miller spoke in part of an interview yesterday focused on the new hepatitis C medications, their cost, and how the benefits manager would approach covering the new drugs.
Gilead (GILD)’s drug Sovaldi may generate $9.5 billion in 2017, according to the average of six analysts’ estimates compiled by Bloomberg. Sovaldi is half of a two-drug combination pill expected to reach the market by early 2015. AbbVie is developing a treatment of four pills to be taken daily that may be approved for sale about the same time. Bristol-Myers Squibb Co. (BMY) and Achillion Pharmaceuticals Inc. also are developing medicines.
$84,000 Price
Gilead’s Sovaldi was approved Dec. 6 by U.S. regulators to be used with current medicines for patients with certain types of hepatitis C. Its $84,000 cost for a course of therapy will strain the health-care system, said Express Scripts’ Miller.
“When you look at the price of many new products coming to the marketplace, it’s just not going to be sustainable,” he said.
Pharmacy benefit managers like Express Scripts control the list of covered drugs, or formularies, that get reimbursed or are subject to lower co-payments for patients. The companies force drugmakers to compete in an effort to gain discounts in return for making it on to their list, or for having lower co-pays to drive patients to the drugs.
About 4 million Americans have hepatitis C, which attacks the liver and can cause cancer. The disease is passed through infected blood or body fluids and can be carried for years without symptoms. The U.S. Centers for Disease Control and Prevention recommends that baby boomers, defined by the agency as those born from 1945 to 1965, get tested for the infection.
Similar Benefits
The new medicines act faster than current therapies and eliminate weeks of injections that cause side effects such as the flu. Most have shown similar levels of effectiveness, said Mark Schoenebaum, an analyst with International Strategy & Investment Group LLC.
“They’re basically comparable,” he said in a telephone interview. “Wall Street is expecting price parity, but AbbVie might be more willing to wheel and deal.”
A more convenient dosing may not be enough to get preferred reimbursement, Miller said, especially with the high prices. “If a company is just relying on a convenience factor to get that product covered, they may end up being disappointed,” he said.
Gilead shares declined 3.2 percent to 72.81 at 4 p.m. New York time, the most since October. The Foster City, California-based company’s stock has almost doubled this year. AbbVie gained 1.8 percent to $52.14, its highest closing price this year. Express Scripts increased less than 1 percent to $67.73.
Cara Miller, a Gilead spokeswoman, didn’t respond to an interview request to discuss Miller’s remarks. Elizabeth Hoff, a spokeswoman for North Chicago, Illinois-based AbbVie, didn’t immediately provide a comment.
AbbVie released results today from a final-stage trial of 394 previously treated hepatitis C patients showing that its treatment cleared all signs of the virus in 96 percent of patients. In the second of three studies generally needed for U.S. approval, Gilead’s one-pill, two-drug treatment showed viral clearance rates of 95 percent to 100 percent.
To contact the reporter on this story: Drew Armstrong in New York atdarmstrong17@bloomberg.net
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net
Also See: Gilead HCV Drug May Face Price War; Rival AbbVie Up
No comments:
Post a Comment