Blog | January 7, 2015

Has AbbVie Started A Hep C Drug Pricing Revolution?

By Anna Rose Welch, Editor, Biosimilar Development

hepatitis c

Right before the holidays, the FDA gave a nod to Viekira Pak, a new AbbVie drug cocktail credited with curing over 90 percent of those with genotype 1 hep C. Taken daily over the course of 12 weeks, Viekira Pak eliminates the need for the injectable, interferon. The regimen comprises three brand new drugs (paritaprevir, ombitasvir, and dasabuvir) taken with ritonavir, an older drug.

This is a big win for AbbVie, which ushered ombitasvir and dasabuvir through development in its own halls, making Viekira Pak the company’s first approved drug with a new active ingredient since the company’s blockbuster drug Humira was approved in 2002.

Overall, it was a considerable year for HCV treatments. 2014 saw the release of Johnson & Johnson’s Olysio+Sovaldi combo, as well as Gilead’s Harvoni, the company’s revamped version of Sovaldi combined with ledipasvir in a single pill. It was also the year of the “Great Pricing Wars.” At $84,000 for a 12-week regimen, it’s become hard to read Sovaldi without hearing “cha-ching”. Harvoni’s price is even higher than that, ringing in at $94,500 for the 12-week regimen. Then there’s J&J’s Olysio ($66K) + Sovaldi ($84K) 12-week combination that goes for a whopping $150,000, according to Bloomberg Businessweek.  

Unlike Gilead however, AbbVie doesn’t seem to be taking as much flak for Viekira Pak’s list price of $83,319 — just a stone’s throw shy of Sovaldi’s price tag. However, some recent headlines, such as Bloomberg’s “AbbVie Prices Hep C Drug 12% Below Gilead Rival [Harvoni],” make AbbVie look like a healthcare hero. And that headline doesn’t even draw attention to the most recent stop AbbVie pulled in order to win the favor of Express Scripts, which swiftly dropped Gilead’s treatments for genotype 1 patients almost immediately following Viekira Pak’s approval.

According to Reuters, in an “unprecedented” move, AbbVie agreed to significantly lower prices for the combo to have it included on Express Scripts’ National Preferred Formulary list. Though AbbVie hasn’t released a specific figure, Express Scripts says the price range is close to that of Sovaldi in Western Europe: $52,000 (France) to $66,000 (Germany).

Now, Gilead has its own pharmacy deal, recently winning the hand of CVS Health Corp, which has agreed to provide hep C patients with Sovaldi and Harvoni instead of Viekira Pak. However, there’s no word yet if Gilead lowered the price of the drug to attain this deal.

Until now, Gilead has maintained the drug’s health benefits are worth the high cost (better in the long run than liver transplants). And the company has been richly rewarded, raking in quarterly revenue of $8.5 billion from Sovaldi the first three quarters of 2014, The Wall Street Journal reports. Express Scripts will now only offer Sovaldi treatments for patients with other disease genotypes and those who are ineligible for AbbVie’s drug. 

But I’m increasingly curious about what is to come now for Gilead’s hep C regimens following Viekira Pak’s emergence in the market. I expect AbbVie’s latest move with Express Scripts will be the start of an intense drug pricing revolution in the months ahead (cue the recent Motley Fool title, “AbbVie Throws First Punch In Hep C Price War With Gilead”).

Not to mention there are other players emerging in the space that could become competitors. Merck snapped up Idenix mid-2014, effectively bolstering its hep C pipeline with 3 drugs in clinical trials — two of which are in the same class as Sovaldi and could become prime competitors. Similarly, smaller biotech firm Achillion Pharmaceuticals recently announced it too, is seeing some early, but promising results from its own NS5A inhibitor.

In the face of greater competition, will Gilead stick it out and maintain a strong business model based on the notion that price tag and clinical benefit go hand-in-hand, or will it be necessary to bow to pricing pressures to ensure that patients are able to take advantage of Sovaldi’s benefits?