PBM deal on new hep.-C cocktail highlights drugmaker tolerance for discounts
Thanks to a discounting assist from AbbVie, Express Scripts wasted no time following through on a pledge to favor the company's hepatitis C cocktail, assuming efficacy and costs comparable to Gilead's Sovaldi and Harvoni.
Just a working day after FDA's approval of Viekira Pak Friday, the benefits manager announced the treatment will be the exclusive choice for hep.-C patients with genotype 1 on its National Preferred Formulary (NPF), effective January 1.
The PBM and drugmaker negotiated a “significant” discount off the $83,000 price for a standard 12-week treatment that AbbVie had announced Friday. The favorable pricing will allow plan sponsors “to treat all genotype 1 patients, not just the sickest,” an Express Scripts spokesperson told MM&M.
The spokesperson declined to quantify the discount, but Evercore ISI analyst Mark Schoenebaum put it in the 10% to 20% range, “based on historical PBM discounts.”
The agreement is being seen as a seismic shift in the joint development by PBMs and drugmakers of cost effective therapies, and comes in the wake of an uproar over health system costs fueled by the high prices of Gilead's HCV drugs Sovaldi and Harvoni.
Speaking of which, Express Scripts will exclude Sovaldi and Harvoni from the its formulary, which affects some 25 million patients, effective Jan. 1, though Sovaldi will be reimbursed for patients with other genotypes and advanced liver disease. J&J's Olysio is also off the list, though all three drugs will be available for patients that have started treatment on them.
About 75% of hep. C patients are genotype 1. In response to questions from MM&M, the PBM said it could not provide a specific figure for how many of the 25 million members on the NPF have that form of the virus.
In a webinar Monday, Evercore ISI's Schoenebaum noted that getting the PBM's indirectly covered clients to include the AbbVie regimen in their formularies will be critical, predicting that “10% to 20% is likely, but we need to wait 6 to 12 months for clarity.”
In the end, AbbVie played ball on price on a four-drug therapy for which it has projected blockbuster status, propelled by an expanding market as more patients are prescribed the efficacious next-gen hep. C treatments.
While the AbbVie regimen is less convenient than Harvoni, requiring patients to swallow four pills vs. one for Harvoni, “The value for payers and patients is in the entire Hepatitis Cure Value Program that we offer through our Accredo specialty pharmacy,” the Express Scripts spokesman continued. “The agreement allows clients to provide important, curative treatment to more patients at a more affordable cost than what was previously available.”
“Pharmaceutical innovation must be rewarded based on the value it brings to patients and payers,” added Express Scripts SVP and chief medical officer Steve Miller, in a statement. “This agreement marks a fundamental change in how sustainable access and affordability will be delivered to hepatitis C patients.”
How much the deal slows the record-breaking sales of Harvoni and Sovaldi, and captures share for AbbVie, will now depend on physicians' response to the newly available treatment, payers' evaluations of the therapies' pros and cons, and Gilead's willingness to engage in some discounting of its own.
“(Express Scripts) is using this move as a step in the negotiating process. Gilead believes that there is room to renegotiate the contract,” Schoenebaum noted.
Analysts have projected blockbuster sales for the Viekira Pak regimen, partly based on AbbVie's potential to expand the HCV market as more patients with the virus get treated.
Such optimism is bolstered by a CVS Health report this month evaluating Sovaldi and Harvoni sales rates. Despite the swift uptake of Harvoni after launch, Sovaldi has incurred only a modest reduction in use, suggesting “ an increase in the eligible patients now being treated,” the report states.
The reports adds that almost 1.5 million patients diagnosed with hep. C in the US are untreated, with an estimated 1.5 million more infected but not yet diagnosed.