2015 sales: $13.9 billion
2020 projection: $7.7 billion
Gilead Sciences ($GILD) has garnered its fair share of attention since rolling out hep C combo med Harvoni last year. A treatment breakthrough, Harvoni was the first hep C cocktail in a pill, and its high cure rates coupled with manageable side effects made it instantly popular.
But the drug's $95,000 per 12-week treatment course price tag triggered pushback from the public and payers, who were already unhappy with sky-high prices for Gilead's blockbuster hep C med Sovaldi. Harvoni "threatens to impose staggering costs on our healthcare system," the National Coalition on Health Care wrote to Congress last year. And the pricing model for new therapies is "not sustainable," Steven Miller, chief medical officer at PBM Express Scripts ($ESRX), said at the time, vowing to take matters into his own hands to reduce costs.
Miller lived up to his word. Last year, Express Scripts selected AbbVie's ($ABBV) Viekira Pak for exclusive formulary coverage in return for a sizeable discount, shunning Gilead's Harvoni and Sovaldi and sparking a pricing battle between the two companies as they each inked exclusive deals with payers. The way Miller sees it, the price war could save consumers $4 billion this year alone. It has certainly cut into the per-patient cost; some analysts estimate discounts and rebates of upwards of 40%.
Gilead has defended its pricing for Harvoni and Sovaldi by pointing to their benefits, saying the drug prevents costly complications including liver transplants, liver cancer and repeat hospitalizations.
And at least some experts agreed with Gilead's assessment. In July 2014, a panel of doctors and healthcare professionals assembled by the American Association for the Study of Liver Disease (AASLD) and the Infectious Diseases Society of America (IDSA) found that Gilead and AbbVie drugs are cost-effective at their currently discounted prices.
Still, Gilead could face more pushback as patients and payers grapple with Harvoni pricing. Some state Medicaid programs are refusing to cover the treatment citing high costs. Some patients have sought the med overseas. Perhaps as a result, Harvoni scripts keep slowing--a trend that will likely continue, according to RBC Capital Markets analysts Michael Yee and Adnan Butt.
But Gilead isn't worried about the slowdown. The company has only "touched the tip of the iceberg" in assembling a patient pool for its hep C meds, CEO John Martin said during the company's Q2 conference call last year. Strong sales of the med, along with its promise of a cure, could be enough to garner blockbuster numbers in the years to come. -- Emily Wasserman (email | Twitter)
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