Federal Medicaid officials lectured Gilead Sciences and other hep C drugmakers last year on the need to find ways to cut prices on their pricey meds for state Medicaid programs. Now, Massachusetts says it has a deal for rebates from Gilead in exchange for an exclusive on its hep C cure Harvoni.
Following the lead of private payers, Massachusetts has extracted a promise of savings from Gilead ($GILD) in exchange for making its hep C cure Harvoni, “the exclusive therapy” for about 80% of the the members of its MassHealth members infected with the hepatitis C virus. The other 20% are expected to get Gilead’s Sovaldi and Bristol-Myers Squibb’s Daklinza, for which the state said it also has worked special deals.
Officials gave no specifics on savings, saying only that the program, which kicks in Aug. 1, “significantly lowers the cost of their Hepatitis C drug.” Havroni’s sticker price is $94,500 for 8 weeks. The state said it has spent $318 million on hep C drugs between January of this year and December 2013, when Sovaldi hit the market for about 4,430 patients.
“This drug saves lives, but its very high price has kept a cure out of the hands of people who need it,” Attorney General Maura Healey said in a statement. “We are working hard with Gilead to improve the affordability of Sovaldi and Harvoni, and we are pleased the company has shown a commitment to increasing access to these drugs.”
The Centers for Medicare and Medicaid Services (CMS) in November responded to pleas from state Medicaid programs that were overwhelmed by the cost of the new drugs, which can cure hepatitis C, but cost way more than most programs are used to. Many programs were limiting coverage, providing the drugs only to the sickest patients, despite evidence that in the long run more money would be saved curing the disease in patients early.
It sent letters to Gilead, AbbVie ($ABBV) and Johnson & Johnson ($JNJ) reminding them that they were required to offer Medicaid programs their "best price" for hep C meds. It asked them to lay out some pricing options that could help expand coverage for patients. It also sent letters state Medicaid programs saying they needed to ensure that poor people with hep C have access to potentially lifesaving meds.
Gilead from the git-got has been criticized for having priced Sovaldi and Harvoni so high for drugs that offer a cure and are needed by so many patients in the U.S. The Centers for Disease Control estimates that 1% to 1.5% of the U.S. population is infected with the disease which can lead to liver failure and death. Before Sovaldi, a once-a-day drug that cures more than 95% of those with the disease, the side effects of treating hep C were so arduous for patients that many did not stay on the regimen.
Sovaldi hit the market with a sticker price of $84,000, a $1,000 a pill for the 12 weeks. While that price was seen as exorbitant by payers, the price of Harvoni, which could treat a wider variety of infected patients and in 8 weeks, topped that. As soon as competition hit the market with the introduction of AbbVie’s hep C competitor Viekira Pak, payers began playing one drugmaker off another, offering exclusivity deals in exchange discounts.
That practice worked, as evidenced by slowing hep C sales for Gilead in recent quarters, although the drugmaker has still made huge profits from the drugs compared to other launches, $19 billion from Sovaldi and Harvoni last year.
Then Gilead surprised some observers this week with the price of its newest drug, Epclusa, a combo med that can treat all major hep C genotypes. It gave it a sticker price of $74,760 for a 12-week regimen. The drug, however, will not supplant Harvoni as the gold standard in care for genotype 1, the most common and therefore lucrative category, in part because Harvoni requires only 8 weeks of treatment. Gilead officials said Epclusa should be particularly important in areas of the world where genotype testing is not easily available.
- here’s the MassHealth release
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