As Gilead Sciences gets underway with the key launch of its twice-yearly pre-exposure prophylaxis (PrEP) HIV med, the company is doing so with a key potential overhang removed.
Friday, the U.S. Supreme Court decided that appointments for members of the U.S. Preventive Services Task Force, which makes recommendations for coverage requirements under the Affordable Care Act (ACA), are made within the bounds of the U.S. Constitution. The case was heard after an employer, Braidwood Management, argued that the task force’s recommendations were invalid because its members were chosen in a way that stepped on the Appointments Clause of the Constitution.
Importantly, Braidwood—and the organizations that sided with it—were challenging the ACA’s preventive service protections, opposing coverage for HIV PrEP resources on religious grounds.
With the 6-3 ruling from the Supreme Court, a potential headwind to Gilead’s PrEP portfolio is “largely removed,” BMO Capital Markets analyst Evan David Seigerman wrote in a recent note to clients.
Gilead markets oral PrEP drugs Truvada and Descovy, but the company just won FDA approval for its twice-yearly Yeztugo. The injectable PrEP option scored FDA approval last month after demonstrating a strong ability to prevent HIV and forms a key pillar in Gilead’s plan to “redefine the PrEP market.”
As the company gets going with its much-anticipated rollout, the SCOTUS decision protects critical insurance dynamics, which are especially crucial in the early launch period, Seigerman explained in the note.
The analyst pointed out that Gilead has previously said it expects to reach about 75% patient coverage for Yeztugo at six months and about 90% by the end of its first year on the U.S. market.
“Today's decision clears the path forward for a launch with maintained protected coverage,” Siegerman wrote.
Gilead hasn’t offered specific guidance on its revenue expectations for the drug, but the company expects its new offering will help grow the PrEP market “quite rapidly,” Chief Commercial Officer Johanna Mercier previously said. The company is specifically looking to expand the 400,000-person U.S. PrEP market to more than 1 million people by the mid-2030s and touts an access strategy that’s designed to enable “broad uptake and availability for individuals with and without insurance coverage,” the company said in a recent press release.
The company’s Advancing Access medication assistance program is set up to provide the PrEP free of charge to U.S. users without insurance, while eligible commercially insured people can use Gilead’s copay savings program.
While many Wall Street analysts have placed a peak sales target of $4 billion to $5 billion on the new PrEP medicine, Mizuho analysts see the drug delivering as much as $8 billion annually at peak.
Last year, Gilead's full HIV portfolio generated $19.6 billion in sales, driven by Descovy and HIV treatment Biktarvy.
Outside of the implications for Gilead, the SCOTUS decision was applauded by HIV advocacy organizations, with a national coalition of several groups—including PrEP4All and the Equality Federation—praising that providers can now “continue offering preventive care services as before, confident that insurers must continue covering evidence-based preventive services without cost-sharing,” the coalition said in a statement.
However, advocates must still “remain prepared to call on members of Congress to demand accountability on the enforcement of the preventive service protections,” the group noted.