At $84,000 Gilead Hepatitis C Drug Sets Off Payer Revolt


hcv_newsAs Gilead Sciences Inc. (GILD) touted its $1,000-a-pill hepatitis C cure to investors in a hotel ballroom in San Francisco, a group of about 20 protesters milled outside. “Gilead=Greed,” one sign read.

“I’m glad people have the new drugs, but I’m concerned about the prices,” said Orlando Chavez, 62, a hepatitis C and HIV counselor and one of the protesters on Jan. 13. He worries that insurers will see Gilead’s price and force patients to try a less effective, older and cheaper therapy first, he said.

Chavez has good reason to worry.

Payers face billions of dollars in new drug costs as pharmaceutical companies develop increasingly complex products in the years ahead. Express Scripts Holding Co. (ESRX), Catamaran Corp. (CCT), Aetna Inc. and CVS Caremark Corp. (CVS) among others are already pushing back against the high cost of Gilead’s drug. They’re discussing how to pit similar drugs against each other, refusing coverage for some, or subjecting treatments to more review by outside experts and refusing to pay a premium based on one drug being more convenient to take than another.

Gilead’s new drug, Sovaldi, costs $84,000 for a 12-week treatment. Such breakthrough treatments and their stratospheric price tags have “absolutely” caused insurers to reconsider covering high-priced hepatitis, diabetes and other treatments, said Sumit Dutta, chief medical officer of Catamaran, the fourth-biggest U.S. pharmacy benefit manager, or PBM.

“You can’t manage exclusively by the techniques PBMs have used in the past,” Dutta said by telephone. “We’re seeing the shift, where payers are finally going to say, ’It’s $84,000, and the other therapy is $50,000 — what am I getting?’”

At $84,000 Gilead Hepatitis C Drug Sets Off Payer Revolt – Bloomberg.

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