Competition for treating America's hepatitis C population is intensifying among pharmaceutical companies and benefits management firms, suggesting a thaw in the $1,000 per-pill price of last year's blockbuster.
Gilead Sciences has crafted an arrangement to distribute its breakthrough hepatitis C medication Sovaldi through CVS Health, whose drug plans cover some 60 million in Medicare, Medicaid and private insurance.
Effective January 7, Sovaldi and its all-oral version Harvoni, will be "exclusive on the CVS Caremark Standard Commercial, Exchange (Marketplace), Medicare Part D and Medicaid formularies," said Christine Cramer, senior public relations director at CVS Health.
The Gilead-CVS deal comes after a year of Gilead selling Sovaldi for more than $80,000 per course of treatment in the U.S. and weeks after another drugmaker AbbVie won approval for the hepatitis C breakthrough Viekira Pak, and crafted an exclusive formulary deal with the nation's largest pharmacy benefits manager, Express Scripts.
Sovaldi has set off its own boom in drug spend, hitting hard some public health plan budgets and private insurers alike, even leading to losses for some.
Prescription drug costs are a relatively small part of private insurance spending, but new data from Truven Health Analytics found that drug spending is now growing faster than hospital and professional spending, at a recent of 9.6 percent between summer 2013 and 2014.
"This is a direct result" of the introduction of Sovaldi and a companion drug, Johnson & Johnson's Olysio, according to Truven's senior vice president William D. Marder. Together, the two drugs accounted for 3.3 percent of total prescription drug spending between the fourth quarter of 2013 and the second quarter of 2014.
The high price of Sovaldi set off a fractious debate about the pharmaceutical business model, with Karen Ignagni, CEO of America's Health Insurance Plans, calling for "transparency in the relationship between the price of a drug and the cost of its development."
Another argument is that Sovaldi, though high priced, avoids the costs of the largely unsuccessful previous standard therapy, the end result of liver cancer and the need for transplants. It is actually a cure, unlike so many new high cost pharmaceuticals being approved for cancer and other complex diseases.
Either way, the U.S. hepatitis C population is estimated at more than 3 million, and there is now competition to cure those patients, many of whom are stable, asymptomatic and yet to be treated with Sovaldi.
"Our goal was to create the lowest net-cost solution for the entire population of patients with all genotypes of Hepatitis C," said CVS spokesperson Cramer. "When we made this decision, we evaluated a wide variety of factors including duration of therapy, relative distribution of genotype and cost of the individual agents in the category as well as the results of a comprehensive clinical review of the different hepatitis C regimens."
The efficacy of AbbVie's Viekira Pak -- combination of ombitasvir, paritaprevir and ritonavir tablets co-packaged with dasabuvir -- is quite similar to Sovaldi. Across six trials of 2,308 participants with chronic hepatitis C infection, including those with cirrhosis, about 90 percent of participants receiving Viekira Pak were free of the infection at the end of the 12-week course.
AbbVie's list price for a 12-week Viekira Pak course is rather similar to Sovaldi as well -- $83,319, not much less than $84,000 -- although no doubt Express Scripts secured a discount to get Viekira Pak as the preferred treatment on its formulary.
Express Scripts described the multi-year deal with AbbVie is an "unprecedented solution to an unprecedented healthcare challenge." The agreement "marks a fundamental change in how sustainable access and affordability will be delivered to hepatitis C patients," said Steve Miller, MD, Express Scripts' senior vice president and chief medical officer.