Dive Brief:
- Gilead and Mass Health, Massachusetts' state Medicaid program, on Thursday reached a rebate deal for the drugmaker's hepatitis C drugs Harvoni and Sovaldi, after the state had threatened to file a complaint against the pharmaceutical company for its high hepatitis C medication prices.
- Starting Aug. 1, MassHealth will receive rebates for the Gilead drugs, which can cost up to $94,000. In exchange, coverage will be extended to roughly 80 percent of MassHealth members for Gilead's Harvoni.
- The agreement is a big win for Massachusetts: the state's Medicaid agency announced it would lift coverage restrictions thanks to the deal. Meanwhile, Gilead averted a potential lawsuit and secured exclusive coverage for Harvoni for most Masshealth members.
Dive Insight:
It's a good week for Gilead, despite having to increase the rebates paid to MassHealth.
First, the company's pan-genotypic hepatitis C drug Epclusa won approval from the Food and Drug Administration on Tuesday. Now, the rebate deal with Massachusetts secures much needed positive press given rising public scrutiny on drug prices.
Maura Healey, Massachusetts' Attorney General, had threatened to file a legal complaint against Gilead over its hepatitis C drugs Harvoni and Sovaldi, claiming the company's list prices for these medications were creating an unsustainable crunch on the state's Medicaid and healthcare budget. Federal law requires Medicaid to cover any drugs deemed safe and effective by the FDA, but the high prices were forcing states to restrict coverage to only patients with the most advanced forms of the disease.
After agreeing to the deal, MassHealth announced it would extend hepatitis C coverage to another 3,400 residents, reports the Boston Globe. The exact financial details of the deal have not been disclosed.
"This rebate agreement will expand access to much-needed medication for people suffering from Hepatitis C, and it will save millions in taxpayer dollars," said Healey.
The boon for Gilead is that MassHealth committed to treating 80 percent of hepatitis C cases with the company's Harvoni.The remaining 20 percent would be treated with either Gilead's Sovaldi or Bristol-Myers Squibb's Daklinza, listed at $84,000 or $63,000 respectively.
The Massachusetts deal provides a model for the nine other states that are in the process of listing restrictions on hepatitis C restrictions, according to the Boston Globe.
The deal may also help ease analysts' concerns over lower sales of Harvoni, as the company recorded a sharp drop in U.S. sales of the drug. Given the high cure rates for Harvoni, some analysts predict the market for Gilead will shrink considerably as the easiest-to-treat patients are cured.
Newly-approved Epclusa, which the FDA cleared to treat all genotypes of the liver disease, should also help shore up Gilead revenues.