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Hepatitis Drug Prices Fall

Formulary managers reap benefits of price war

Gilead Sciences and AbbVie, engaged in a price war over hepatitis C drugs, are offering such substantial discounts that one benefit manager has decided to cover both medications rather than get a lower price for one through an exclusive deal, according to a new Bloomberg report.

A “substantial reduction” in the price for Gilead’s Harvoni (ledipasvir/sofosbuvir) and AbbVie’s competing Viekira Pak (ombitasvir, paritaprevir, and ritonavir tablets; dasabuvir tablets) made it possible to give both drugs preferred status and still save more money than through an exclusive deal, said Prime Therapeutics LLC, based in St. Paul Minnesota. Prime covers 25 million patients in nonprofit Blue Cross and Blue Shield plans for people in 23 states.

“We are receiving market-leading rates from both companies,” said Peter Wickersham, a senior vice president in charge of specialty drugs for Prime. “Neither company wanted to be left off the formulary.”

The agreement breaks a pattern of major benefits managers signing exclusive deals with either Gilead or AbbVie in exchange for better pricing. Express Scripts Holding Co., the biggest U.S. manager of pharmacy benefits, said it received a price discount from AbbVie by agreeing last month to make Viekira Pak the preferred choice for most patients for at least 2 years.

Soon after, CVS Health Corp. and Anthem Inc. made deals with Gilead to use Harvoni, blocking AbbVie. Anthem got price discounts in return.

Wickersham told Bloomberg that Prime’s initial inclination was to do an exclusive deal to give preferred status to only one of the two competing drugs. Yet after it asked Gilead and AbbVie what discounts they would give if both drugs were equally covered, then projected its likely costs, Prime realized it could save more money by covering both drugs.

AbbVie’s Viekira Pak requires most patients to take four to six pills a day for 12 weeks, compared with one pill a day for Harvoni. Nonetheless, Wickersham said that AbbVie’s drug is likely to capture some market share because sometimes patients respond better to one medication than another.

Hefty price tags for new drugs have recently drawn criticism from insurers, lawmakers, and doctors. Before discounts, Gilead’s hepatitis drug Sovaldi (sofosbuvir) costs $84,000 for a 12-week course of treatment, and Harvoni, which combines Sovaldi with ledipasvir, taken as a single pill, costs $94,500 for 12 weeks. The listed 12-week price for Viekira Pak is $83,319.

Source: Bloomberg; January 12, 2015.

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