UPDATE: On Friday, the third-largest insurer in the country, Aetna, announced that it had also struck a deal with Gilead for its hepatitis C medications in exchange for a discount. That means that Sovaldi/Harvoni will be the preferred option for the approximately 20 million health plan members serviced by Aetna.
The insurer didn't provide details on just how steep the discount will be, but analysts say that AbbVie and Gilead have been offering discounts approaching 30% to insurers and benefits managers.
- The largest provider of health coverage to U.S. businesses, insurer Anthem, has chosen to favor Gilead hep C drug Harvoni over AbbVie's Viekira Pak, citing a sizable discount and a simple dosing regimen as two motivating factors.
- Anthem, which serves about 30 million people through its employer plans, is among the companies that has intentionally tried to pit Gilead and AbbVie against each other in an effort to procure the lowest possible prices for pricey new hep C medications.
- Anthem uses the pharmacy benefits manager ExpressScripts to run its formularies, which is why the company's decision to favor Harvoni is all the more intriguing. Express Scripts struck a deal to use AbbVie's hep C treatment for most of its other health plans. The second-largest benefits manager in the U.S., CVS, has struck an exclusive deal with Gilead.
After an initial period of heralding the advent of an actual cure for the previously uncurable hepatitis C virus, the media has now turned its attention to pricing issues surrounding Gilead's treatment options---$1,000 per pill for Sovaldi and $94,500 for a 12-week course of its combo hep C formulation, Harvoni.
However, payers are starting to exercise real leverage in the market place, using their buying power to exact lower prices for Gilead's drugs and AbbVie's combo hep C treatment, much to the benefit of both payers and patients. But there are some "losers" in this scenario: biotech investors who were counting on price stability at the high end.
It appears increasingly likely that Gilead will win out in the hep C marketing wars. The company has several things in its favor, including: a treatment regimen that only requires a single pill per day; a significant first-to-market head start; and now, preferential treatment by both CVS and Anthem.