Gilead, AbbVie rack up new payer deals, but hep C obstacles loom across the Atlantic

The hepatitis C market is breaking new ground all over the place. As payers put the squeeze on Gilead Sciences ($GILD) and AbbVie ($ABBV) for discounts in the U.S., England's National Health Service is delaying a broad rollout of Gilead's blockbuster Sovaldi till July, citing the drug's high cost--an unprecedented move on a treatment already blessed by the country's cost-effectiveness watchdogs.

And with AbbVie's cocktail now approved in Europe and the U.K.--under the brand names Viekirax and Exviera, rather than Viekira Pak like in the U.S.--the two drugmakers will be squaring off there in country-by-country negotiations for coverage.

With two U.S. discounts announced late Friday, the latest tally in the Gilead vs. AbbVie hepatitis deal-making contest is now 7-to-3 in Gilead's favor. After Humana and Harvard Pilgrim signed on with Gilead late last week, the company rolled out news of an exclusive Aetna arrangement on its combo pill Harvoni. The deal is "competitive with other recently announced agreements for this class of therapy," the insurer said (as quoted by Reuters).

Meanwhile, AbbVie linked up with state-based drug programs for HIV patients, giving the purchasing group a "substantial discount" on its Viekira Pak cocktail. It's not an exclusive, but Gilead has so far been uninterested in negotiating, said Britten Pund, associate director of healthcare access for the National Alliance of State & Territorial AIDS Directors (as reported by Bloomberg).

That adds to Gilead's exclusive with CVS Health ($CVS) and Anthem ($ANTM), and AbbVie's Express Scripts ($ESRX) agreement, which kicked off the whole show. Prime Therapeutics decided to split the difference and cover both companies' meds, thanks to discounts on either side.

The details of each arrangement differ; for instance, Aetna's Gilead exclusive requires patients to fail on Gilead's regimen to get AbbVie's Viekira Pak, as some other payers have agreed. But Aetna will also require its patients to get prior authorization for Harvoni and Sovaldi--and a number of criteria apply. That suggests the insurer plans to restrict access to sicker patients, ISI Group analyst Mark Schoenebaum said in a Friday note to investors.

Does the NHS move to delay Sovaldi treatment mean England will be trying to pit the two companies against each other for access to its patients? The health service hasn't said, but with AbbVie's cocktail only just approved by regulators, its cost-effectiveness review is months away. The National Institute for Health and Care Excellence (NICE) hasn't ruled on Gilead's combo pill Harvoni yet, either.

It definitely means that the NHS will save some money in 2015 by delaying treatment, and that might buy some time for tougher negotiations on the combos from both companies. Patients who are severely ill can get access to Sovaldi now.

Charles Gore

Patient advocates aren't happy, that's certain, though they do acknowledge the burden of expensive meds for a widespread malady. "It feels to me as if a whole new criterion has been invented by the backdoor," Hepatitis C Trust chief Charles Gore told The Guardian. "It is undoubtedly a high cost," he went on to say. "The unfortunate thing is there are an awful lot of people who need it. We're talking about potentially hundreds of thousands of people. That becomes a massive budget-buster."

Gilead has already inked a big discount with France on Sovaldi. Health officials there are promising to tax hep C drugmakers if spending on the disease tops a certain level. But Gilead agreed to not only cut the cost of Sovaldi but also offer some guarantees in case patients don't respond to the treatment. In return, France agreed to cover the drug 100%, removing the burden of patient copays or co-insurance.

- read the Guardian piece
- get more from Bloomberg
- see the Reuters news

Special Reports: The most influential people in biopharma - Steve Miller, Express Scripts | The new drug approvals of 2014 - Harvoni - Viekira Pak

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