As soon as Gilead Sciences ($GILD) named a price for its highly anticipated hep C drug Sovaldi, activists pounced--and payers showed some nervousness about laying out cash for another high-dollar treatment. Not to worry, Chief Operating Officer John Milligan says. Payers understand the big picture.
"When you talk to them about the long-term benefits, they recognize they're not going to have to worry as much about liver transplants and other care they're going to have to give," Milligan told Bloomberg. A new liver costs about $300,000 in the U.S., and that's before factoring in the price of drugs to make a transplant work. "For most of these plans, the risk/benefit seems to be positive, based on our conversations."
The FDA approved Sovaldi late last year for treating hepatitis C and just days ago the company submitted an application for a combo pill that, if approved, is expected to provide an interferon-free cure for many of the patients who are infected with the serious condition. It put a price of $84,000 for 12 weeks of treatment, and analysts suggest it could generate sales of $4 billion just this year, Bloomberg reports. Activists lamented the price, but Bloomberg said that it also has pharmacy benefit managers looking for new tactics to control drug spending, like not covering all new drugs in a new generation of treatments or even bringing in outside experts to review the data, just as cost-effectiveness watchdogs in other countries do.
Gilead is expected to market its combo pill containing Sovaldi and a new hepatitis C fighter, ledipasvir, as an easier-to-take antiviral cocktail than the two-pill treatment competitor Bristol-Myers Squibb ($BMY) is working on. But payers could also say they won't pay more for convenience and pit the two drugmakers against each other on price.
Milligan gave Bloomberg no specifics about his discussions with payers but said that some big plans and HMOs have approached his company about how to get early access to the treatment. They understand that the drug's ability to cure patients would then cut the huge costs they would otherwise pay over a lifetime of treatment. "To date, without exception, those conversations have been very productive," he said.
- read the Bloomberg story
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