Hepatitis C Drugs Radically Drop in Price to Avoid Exclusives

By John Lavitt 01/14/15

The makers of competing Hep C treatments engaged in a price war that will benefit those in need of treatment.

Strain of hepatitis C

A positive change happened at the beginning of 2015 for the estimated six million Americans infected with hepatitis C. Gilead Sciences Inc. and AbbVie Inc. fell into a price war that greatly affected the cost of the new ultra-expensive hepatitis C drugs. In order to avoid exclusive deals by one company or the other with pharmacy benefits managers, each company is offering huge discounts across the board.

As noted by Peter Wickersham of Prime Therapeutics, a St. Paul-based benefits manager that covers 25 million patients in non-profit Blue Cross and Blue Shield plans for people in 23 states, a huge reduction in the price for Gilead’s Harvoni and AbbVie’s competing Viekira Pak made it possible to give both drugs preferred status and still save more money than through an exclusive deal.

What has proven truly surprising is the speed at which the prices have been dropping and the deals that have been made. In over two decades in the pharmaceutical industry, Peter Wickersham, a senior vice president in charge of specialty drugs for Prime, said he had never seen prices for a brand-name drug category take such a nose-dive in the face of a competing drug being introduced to the marketplace.

In an interview with Bloomberg, Wickersham described how the company is "receiving market-leading rates from both companies. Neither company wanted to be left off the formulary.” But Wickersham believes this is just the beginning. Once additional drugs are introduced in the coming years, the prices should drop even further. “You could probably call this round one,” Wickersham said.

The deal breaks a pattern of major benefits managers signing exclusive deals with either Gilead or AbbVie in exchange for better pricing. As the biggest U.S. manager of pharmacy benefits, Express Scripts Holding Co. bullied AbbVie into a massive price cut by agreeing last month to make Viekira Pak the preferred choice for most patients for at least two years. In response, CVS Health Corp. and Anthem Inc. made deals with Gilead to use Harvoni after receiving huge discounts as well.

Before discounts, Gilead’s hepatitis medicine Sovaldi cost $84,000 for a 12-week course of treatment. Combining Sovaldi with another medication, but still taken as a single pill, Harvoni cost even more with an initial price of $94,500 for 12 weeks. Viekira Pak’s listed 12-week price when it first came out at the end of 2014 was $83,319, but that was quickly discounted, starting the snowball rolling down the hill. The snowball has swiftly become an avalanche, and the balmy days of Gilead’s $1,000 a pill treatment seem to be coming to an end.

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Growing up in Manhattan as a stutterer, John Lavitt discovered that writing was the best way to express himself when the words would not come. After graduating with honors from Brown University, he lived on the Greek island of Patmos, studying with his mentor, the late American poet Robert Lax. As a writer, John’s published work includes three articles in Chicken Soup For The Soul volumes and poems in multiple poetry journals and compilations. Active in recovery, John has been the Treatment Professional News Editor for The Fix. Since 2015, he has published over 500 articles on the addiction and recovery news website. Today, he lives in Los Angeles, trying his best to be happy and creative. Find John on Facebook, Twitter, and LinkedIn.