Hepatitis C and Specialty Pharmacy Market

Pharma/University CollaborationsExpress Scripts Plans a Specialty Drug Price War over new hepatitis C treatments reports a recent Bloomberg News story. The news follows the release of Gilead’s Sovaldi (sofosbuvir), which reportedly costs $1,000 per pill.

Express Scripts projects that Hepatitis C drug trend will grow by 168% by 2015, so employers and health plan payers are closely watching this test case. When there are multiple treatments in a therapeutic class, does a benefit professional really think that this strategy will be successful when a single oral dose therapy to Hep C with a 95+% SVR (sustained virologic rate)  becomes the standard of care?

Along with Vertex and Merck earlier products, Gilead’s Sovaldi is not the first novel oral hepatitis treatment to be released. Janssen’s Olysio (simperevir) is another new hepatitis C treatment, but is only indicated for patients with the common genotype 1 disease form.

By contrast, Sovaldi was approved to treat a significantly larger patient population—people with gentoypes 1, 2, 3, or 4, an increasingly important criteria using gene based markers when determining optimal therapy.

Although Olysio and Sovaldi are the two newest players, multiple companies are in the hepatitis market, including AbbVie that has a hepatitis C regimen in its pipeline with a 96% SVR for genotype 1.  SVR is essentially a cure rate, so AbbVie’s high success rate may make the drug regimen well-positioned to jump into the fight at any minute, pending FDA approval. These treatments do not appear to be therapeutically interchangeable, and are not generic equivalents either.

For P&Ts, the question is where should the battle lines be drawn on behalf of patients (members) and their plan sponsors?  A key issue to consider is the looming “precautionary” or preventative prescribing trends that will likely open up the flood gates for treatment because of the recent CDC Hep C guidance for >50year old adults.

Advancing technologies in drug therapy show no favorites in the marketplace, yet PBMs like ESI continue to follow old technology management patterns with saber rattling.  As one example, Express Scripts does not view more convenient dosing or administration as justification for higher pricing.

Given the history of PBM overstatements of savings, including Express Scripts own claim found in their 2013 trend report: “$329.0 billion was spent on avoidable medical and pharmacy expenses as a result of patients not being adherent to medication treatments.

There is no question that six figure prescription drug costs raise the ante for more attention by plan sponsors and patients.

However, the health care reform generated high deductible health plans, with correspondingly high cost sharing methods, puts a greater emphasis on “affordable”, while begging the question of who is really going to pay for these drug costs? And will manufacturers ever really see the expected sales forecasted by the investment community?

These are the new questions that have greater meaning in a health care reform landscape for drug, diagnostic and device manufacturers as well as third party vendors.