5. Epclusa and Harvoni

Gilead Sciences, under pressure from big rebates, launched authorized generics to its own hep C drugs. (Gilead China)

Epclusa and Harvoni
Gilead Sciences
Combined 2018 U.S. sales: $1.736 billion
Disease: Hepatitis C
Generics launched: January

Thanks to high rebates and payer hardball, Gilead is in a tough spot with its hepatitis C drugs, including its all-genotype treatment Epclusa and the once-high-flying Harvoni. In response, the company did something previously unheard of in pharma: Gilead chose to launch generics to its own branded meds only a few years after their FDA approvals.

Gilead’s stable of hep C meds roared out of the gate after launches in 2014, 2015 and 2016, but more recently—thanks to competition from other drugmakers and tough negotiating by payers—their sales have cratered. Epclusa won FDA approval in 2016 and has generated nearly $9 billion in the U.S. so far, according to Evaluate. Harvoni, for its part, launched in 2015 and pulled in a whopping $4.9 billion in U.S. sales the next year.

Last year, Epclusa brought in $934 million in the U.S. last year, while Harvoni delivered $802 million.

So, Gilead is approaching the situation with an unusual solution. The company launched a subsidiary called Asegua Therapeutics that rolled out authorized generics to Epclusa and Harvoni at list prices of $24,000 per course. The authorized generic price represents a huge discount to Epclusa’s $76,740 list price and Harvoni’s $94,500 sticker. 

RELATED: With its hepatitis C franchise tumbling, Gilead plots knockoffs of its own drugs 

As the company points out, Gilead’s net prices in hep C have tumbled by 60% in recent years, so those generic prices aren't all that far short of its brand prices after discounts. Executives figure the authorized generics may actually pump up sales by increasing volume—whether by gaining better access through payers or opening up new sales avenues. And while they'll yield about the same amount per patients as the brands now do after discounts, they'll cost patients less out of pocket.

The hep C meds aren't the only drugs Gilead is expecting to go generic this year, though. Letairis and Ranexa copies—from generics makers, not Gilead itself—are set to roll. Adding $930 million in U.S. sales from Letairis and $758 million from Ranexa to the hep C drugs' 2018 revenue means generics will be targeting a total of $3.4 billion of Gilead's U.S. sales.

As its hep C business has suffered, Gilead has had to look elsewhere for growth, partly via M&A. The company's new CAR-T drug Yescarta generated $264 million last year after the drugmaker's $12 billion buyout of Kite Pharma in 2017, for instance.

But a new top executive will guide Gilead's future forays toward growth—and that may well involve more cancer drugs. Former Roche Pharma chief Dan O'Day will take command as Gilead CEO March 1 and market watchers figured O'Day's appointment is a signal that Gilead will look to oncology to help it expand.

5. Epclusa and Harvoni