U.K. gatekeepers nix hep C drug Sovaldi till Gilead ponies up more evidence

Gilead's Sovaldi--Courtesy of Gilead

Should the British health service pay for the expensive-yet-effective hepatitis C treatment Sovaldi? The U.K.'s cost-effectiveness gatekeepers say they're not convinced.

With an $84,000 price tag in the U.S., Sovaldi has touched off a vociferous debate about cost and coverage, with top PBMs and insurers balking at the idea of spending billions on the drug, no matter how effective. Their bottom lines are at stake. But U.S. gatekeepers can't simply bar Sovaldi from their formularies.

The National Institute for Health and Care Excellence (NICE) can. And in this early appraisal, NICE said it's "minded not to recommend" the drug for routine use by the National Health Service. The agency took issue with data on patients with particular genotypes of hepatitis C, and picked at the company's cost-effectiveness analysis.

"The available evidence shows that sofosbuvir is an effective treatment for chronic hepatitis C in certain patients," Carole Longson, director of NICE's health evaluation center, said in a statement. "However, evidence is lacking for some subgroups of patients with chronic hepatitis C, and there are also substantial uncertainties in the evidence base presented by the manufacturer."

It's an early guidance, with final word expected in October. In the realm of NICE's "not minded to" decisions, it's fairly positive. Chances are that Gilead ($GILD) can sway the outcome with additional evidence and number-crunching. But NICE's evaluation could spur price negotiations; often, the agency presses drugmakers for discounts or other cost-cutting schemes, and successfully. Already, Gilead has priced Sovaldi much lower in the U.K. than in the U.S., at about $57,000.

Meanwhile, in the U.S., pharmacy benefits managers are casting about for ways to limit Sovaldi use, at least until the FDA approves other drugs in a much-anticipated new generation of hep C treatments. Some payers figure they can pit rival drugmakers against one another to gain price concessions.

In the meantime, they're trying to reserve the drug for the sickest patients. Medicaid providers are demanding more state funding to cover the drug. But Sovaldi sales are flooding in, with more than $2 billion in the first quarter, and probably more than that for Q2.

Analysts are skeptical that U.S. payers can squeeze big cost concessions out of hep C drugmakers even after competition heats up. But the fact that FDA is on the verge of approving a raft of new drugs is giving some PBMs a bit of a reprieve: As ISI Group analyst Mark Schoenebaum points out in a new note to investors, evidence is mounting that doctors are "warehousing" patients till the newest meds hit the market. Of course that's a temporary respite for payers--but it might give them time to strike deals with AbbVie ($ABBV) and Bristol-Myers ($BMY), if not Gilead.

- get the release from NICE
- read the NICE appraisal report

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