With next-gen HIV fighters to sell, Gilead hikes prices on older meds

Gilead Pills

Hiking prices on older meds to prod patients toward newer ones is a time-honored pharma tactic. And Gilead Sciences is using it, now that it has launched a new generation of HIV fighters.

The Big Biotech raised the prices on a range of older meds by 7% to 10%, Cowen & Co. analysts report. The new hikes follow Gilead’s annual increases, which went into effect in January this year.

Stribild, the much-anticipated four-in-one pill launched just four years ago, is one of them, with a 7% boost to wholesale acquisition cost. Complera, another big performer for Gilead, went up by 7%. That’s on top of the January increases of 5% and 7%, respectively.

With the new hikes, Stribild’s wholesale cost now runs at $2,890 a month, while Complera’s WAC now stands at $2,508.

That makes both drugs more expensive than Gilead’s brand-new HIV meds, Cowen points out. Complera now sells for more than Odefsy, a follow-up pill, and Stribild costs more than its successor, Genvoya.

Both new combination pills are designed to reduce the originals’ side effects by substituting tenofovir alafenamide (TAF) for a previous version of that drug, tenofovir disoproxil fumarate (TDF).

Because Gilead typically increases prices once a year, Cowen pointed out, these latest hikes “deviate from the historical pattern.”

Something different must be going on, then, and the new launches offer an explanation. “We suspect that these increases were taken on the TDF-based regimens to help accelerate the switch from TDF to TAF in advance of TDF patent expirations beginning in 2018,” the analysts said in a recent investor note.

The price-hike strategy isn’t only a way to grab sales for recent launches, but collect as much revenue as possible from aging brands before they go off patent.

Gilead has been a perennial target for AIDS activists, which famously protested the costs of its earlier meds with sit-ins and other events. More recently, the Los Angeles-based AIDS Healthcare Foundation launched a “Gilead Greed Kills!” campaign with an elaborate protest at the Goldman Sachs Healthcare Conference. The foundation sued Gilead earlier this year, claiming the company delayed its TAF development in “a calculated, anticompetitive manner” to prevent generics-makers from snapping up market share when the TDF meds go off patent. Since then, it has asked lawmakers and the FDA to investigate the company for patent manipulation and antitrust violations.

And aside from its HIV pricing, Gilead has caught plenty of flak for the $1,000-per-day pricing on its debut hep C pill, Sovaldi--$84,000 per treatment course--and $94,500 for its follow-up combo Harvoni. The company quickly reaped billions in sales from both, while many patients couldn’t afford treatment because their insurers refused to cover the pricey meds.

The two drugs brought in a combined $19 billion last year, and they rated as the fastest drug launches ever.

Payer discounts have since cut significantly into Gilead’s hep C pricing, with some analysts estimating cuts of 40% or more. Gilead took a different strategy with its most recent debut into the field, Epclusa; rather than slapping on a list price on par with Harvoni and Sovaldi, Gilead set Epclusa’s sticker at $74,760.

Gilead’s latest price increases don’t reflect any discounts or rebate deals with payers, of course. But though payers have grown more aggressive about pricing, they’re most successful in categories where multiple, direct competitors are jockeying for market share. Gilead’s closest competitor, ViiV Healthcare, has its own next-gen med, Tivicay, but whether the two companies will get more aggressive on pricing remains to be seen.

In any case, Gilead’s latest round of TAF approvals will help the company "maintain a leading position in the HIV market" even as ViiV presents some “formidable competition,” GlobalData analyst David Fratoni recently told FiercePharmaMarketing. The TAF lineup now includes Descovy along with Genvoya and Odefsey, and the trio will help Gilead “face ViiV’s aggressive strategy to further strengthen its already large HIV portfolio,” Fratoni said.

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