Payers' hep C delay tactics work: Coverage hurdles may be dampening Harvoni script growth

Gilead's ($GILD) hep C wonder combo, Harvoni, boasts cure rates as high as 99.1%, and analysts have said they expect it to rack up $10 billion a year in sales, becoming the fastest-growing drug of all time on the way there. But if all of that's the case, then why are U.S. scripts lagging behind forecasts?

Two words: Reimbursement approval.

Insurance approval is apparently limiting the rate of patients who can start the cocktail drug, Leerink Partners analyst Howard Liang wrote in a recent note to clients. At a large liver center he visited recently, one leader described it as "a very slow and tedious process requiring two full-time employees who do nothing but deal with reimbursement approvals."

While everyone gets access to the treatment eventually, he said, about 90% fail to get approval on the first attempt, and it typically takes two to four weeks for patients to actually start a regimen. In turn, the center can only start an average of 5 to 6 patients per week--10 max--on Harvoni or Sovaldi, a med that makes up half the Harvoni combo.

And that's no accident, the leader told Liang. The key opinion leader believes "there is a deliberate effort on the part of insurers to slow the pace of use," and if all barriers were removed, 20 times as many patients could be treated in the near term, he said.

No surprise there. Payers have been struggling to cope with Harvoni's $94,500-per-treatment-course price tag, as they struggled with Sovaldi's $84,000 cost before that. More and more have been looking for creative solutions to keep the therapies from sapping their budgets or dragging down their bottom lines--and delaying treatment has been among them.

Gilead's Sovaldi--Courtesy of Gilead

But in the meantime, Harvoni's script numbers are off the pace they need to meet consensus estimates this quarter, ISI Group analyst Mark Schoenebaum wrote in a note this week. The combined number of prescriptions for Harvoni and Sovaldi--whose scripts are sinking as patients instead opt for Harvoni--needs to reach about 95,000 for the quarter to hit that mark, he said, and so far they're less than a third of the way there. -- Carly Helfand (email | Twitter)