Express Scripts adds fuel to the fire in fight over Gilead Sciences' Sovaldi

Express Scripts CMO Steven Miller

Express Scripts ($ESRX) released more stunning numbers on what could happen with spending on drugs to treat hepatitis C as it builds a case against the price Gilead Sciences ($GILD) has put on a drug that can cure the disease. In a report on 2013 drug prices, the pharmacy benefits manager projected spending on hep C treatments will rise 1,800% from 2014 through 2016.

"No major therapy class has experienced this high of a rate increase in the 21 years Express Scripts has recorded drug trend data," the report said. Taking a swipe at the price of the highly anticipated and recently approved Sovaldi, it said: "With new medications costing more than $80,000 for a 12-week course of treatment," spending on hep C drugs would push up spending on all specialty products by 63% in that time period.

The big jump would come after spending on hep C treatments actually fell so much in 2013 that the category was no longer in the top 10 for specialty drug spending. But that is likely because doctors were holding off on treatment for some patients until the new, oral drugs from Gilead Sciences, AbbVie ($ABBV) and Bristol-Myers Squibb ($BMY) started to arrive on the scene. These oral treatments can cure the disease and are expected to be added into cocktails that will mean patients will no longer need to take the oft-dreaded interferon, and so it is anticipated they will be widely prescribed.

Express Scripts, which handles drug reimbursement for a big chunk of the U.S. private insurance market, has already staked out its position on the $84,000 price of Sovaldi. It is trying to form a coalition to refuse to use it after a competitor hits the market, which might be as soon as this fall. Since millions of people in the U.S. have hepatitis C, the cost of treating them could be $300 billion, Express Scripts CMO Steven Miller told Bloomberg this week, more than what the U.S. currently pays for all medications. "What they have done with this particular drug will break the country," Miller told the news service. "Companies just aren't going to be able to handle paying for this drug."

There has been pushback by others, including states that believe the cost of treating hep C patients could overwhelm their Medicaid programs. The World Health Organization is trying to figure out how to make the drug available in countries that won't be able to afford it.

Gilead Sciences has defended the price of Sovaldi as appropriate and countered by saying that if it can cure the chronic disease, it will save money for everyone in the long run. The company has claimed that payers get that and have been accepting of its price. Sovaldi is already seeing big sales.

Big sales, that is, in the U.S. But Gilead is plotting a different strategy in developing countries. The drugmaker told Reuters that it is negotiating with several Indian generic drugmakers to produce it at lower costs so that it can be sold at a fraction of the U.S. cost in 60 developing nations. That would include India, many Sub-Saharan countries in Africa and some countries in Asia. It is working on tiered pricing for other countries. Egypt has already negotiated a deal to get Sovaldi for $300 for a 28-day bottle, compared with the $28,000 that it would cost in the U.S.

While the Express Scripts report shined a spotlight on the hep C treatments, it also included information about drug spending last year. It said that spending on prescription drugs was up 5.4% in 2013, higher than in recent years, but far less than the increases seen a decade ago. It said the spending increase was pushed up by higher prices for branded drugs, and greater use of specialty drugs. Specialty drug spending grew by 14.1%.

- read the report
- here's the Bloomberg story
- get more from Reuters
- still more from PharmaPhorum