- The FDA has accepted Merck's application for its combined grazoprevir/elbasvir combination medication for treatment of hepattis C (HCV).
- Merck will be third to market with its next-generation oral hep C treatment. Currently, the market is dominated by Gilead with Sovaldi and Harvoni, as well as AbbVie's VieKira Pak.
- Merck is seeking approval for treatment of HCV genotypes 1, 4, and 6. It would also like to target patients with severe kidney impairment or those with severe renal insufficiency. While Sovaldi and Harvoni can be taken by patients with mild-to-moderate kidney impairment, it cannot be taken by those with severe impairment or those on dialysis.
While the hep C market is large, it is largely dominated by Gilead, which had $10.3 billion worth of Sovaldi sales in 2014. By 2017, experts estimate that Sovaldi and Harvoni will generate more than $17 billion in sales.
As Merck enters this market with a new treatment option, there will be further competitive pressures in this space. For its part, Gilead estimtes that between rebates and discounts to government agencies, such as Veteran's Affairs, it will offer an overall price discount of 46% for its blockbuster meds this year.
At this point, Merck has not disclosed its approach to pricing, which may still be in flux. But Merck's marketing gurus are anticipating a positioning strategy based on filling an unmet need in an increasingly crowded marketplace. And it appears that, rather than try to take out a giant like Gilead, Merck will be content with a piece of the market that makes up for its realtively small breadth with depth.