Gilead's hepatitis C drugs Harvoni, Sovaldi given preferred status by CVS Health

Gilead Sciences reached an agreement under which its hepatitis C drugs Harvoni (ledipasvir/sofosbuvir) and Sovaldi (sofosbuvir) will be given exclusive coverage by CVS Health, the pharmacy benefit manager said Monday. Starting January 7, the two drugs will be the only hepatitis C treatments available via CVS' standard commercial plans, health exchange marketplaces and Medicare Part D and Medicaid formularies.

"Our goal was to create the lowest net-cost solution for the entire population of patients with all genotypes of Hepatitis C," remarked CVS spokeswoman Christine Cramer, adding "when making this decision, we evaluated a wide variety of factors including duration of therapy, relative distribution of genotype and cost of the individual agents in the category as well as the results of a comprehensive clinical review of the different Hepatitis C regimens." CVS did not clarify whether pricing concessions were won from Gilead.

The drugmaker has received intense criticism for the prices of its hepatitis C drugs, with US lawmakers asking Gilead to clarify how it determined the price of Sovaldi. The medicine, which was approved in December 2013 by the FDA, was launched at a price of $84 000 for a 12-week course of treatment. Meanwhile, Harvoni, which was granted FDA approval in October last year, was priced at $94 500 for a standard 12-week course of treatment, although the company noted that some patients could be cured after an eight-week course at a price of about $63 000.

Further, under the agreement, AbbVie's hepatitis C treatment Viekira Pak, which combines Viekira (ombitasvir/paritaprevir/ritonavir) and Exviera (dasabuvir) in an all-oral, interferon-free regimen, will only be available through CVS in cases of a medical exception or prior authorisation. In December, AbbVie's therapy was given preferential status by pharmacy benefits manager Express Scripts over Harvoni after receiving a "significant discount" from the drugmaker. Viekira Pak, which was cleared by the FDA in December, has been priced at $83 319 for a 12-week regimen.

Commenting on the news, RBC Capital Markets analyst Michael Yee stated "we view this as positive because it removes near-term uncertainty for many investors who feared CVS would also strike a deal with [AbbVie] and further put more pressure on [Gilead]." After AbbVie's deal agreement with Express Scripts, "people were worried that Gilead's market share was at risk," Yee said, continuing "now we've moved back to comfort and confidence."

In addition, BMO Capital Markets analyst Alex Arfaei noted "the fact that Gilead is fighting back with rebates is incrementally negative for AbbVie," adding "it tells you that they're going to fight back, and what they have going for them is a better product and volume" of patients.

For related analysis, see ViewPoints: Gilead hits back in HCV price war – but at what cost? and ViewPoints: This means war! Impact of AbbVie's HCV deal with Express Scripts goes well beyond Gilead.

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