For the last year,
a stream of new drugs with shocking sticker prices has looked unstoppable.
There was Sovaldi, introduced last December by Gilead Sciences, priced at
$84,000 for a 12-week course of treatment. Then came Harvoni in October, also
from Gilead, priced even higher at $94,500. And last Friday, drugmaker AbbVie
received FDA approval for Viekira Pak, which the company priced at about
$83,300. All three drugs are prescribed to treat hepatitis C.
Now comes a
major pushback—and it's a significant moment in the war over drug pricing
and access.
This week, the
country's biggest drug plan manager Express Scripts said it will drop Gilead's
drugs Sovaldi and Harvoni from a list of preferred drugs covering 25
million patients and instead will only put Viekira Pak on its list.
Express Scripts said it has negotiated a significant discount with AbbVie
— perhaps between $20,000 and $30,000 per course of treatment — in return for
expanding access to patients and allowing primary care doctors to prescribe the
drug.
Insurers and
companies like Express Scripts have been sounding the alarm that the new
hepatitis C treatments hitting the market are at the forefront of a new wave of
high-priced drugs that, while offering major improvements over previous
therapies, will strain their budgets.
Over the past year,
these companies have tried to limit access to these drugs as a result.
In many cases, they'd only allow sicker patients to receive these new hepatitis
C drugs, and they limited the types of doctors that could actually prescribe
them.
"This
negotiation is a vast improvement to the current environment in which a
significant number of patients have limited or no access to curative
treatment," read a statement from Ryan Clary, executive director of the
National Viral Hepatitis Roundtable, which has pushed for widespread access to
new hepatitis C medications.
Until recently, Express
Scripts didn't exclude any drugs from its list of preferred medications. But
the exclusion list grew from 44 drugs two years ago to 66 in this past year.
The company's chief medical officer, Steven Miller, said he's been telegraphing
a move like the AbbVie deal all year.
"We need
innovation, and affordability has to be part of that innovation," Miller
said in an interview. The companies aren't disclosing the discount, but he said
the deal helps close the gap between prices in the U.S. and western Europe.
Sovaldi is priced at $57,000 in the United Kingdom and $66,000 in Germany.
Since the
Express-Scripts AbbVie deal was announced before the market opened Monday,
Gilead's stock has fallen 18 percent.
Compared to other
developed countries, in which governments set prices, there are limited tools
for pushing down the costs of brand-name medications in the United States.
Domestic government programs receive mandatory discounts (excluding Medicare),
and it's up to private payers to try to negotiate discounts with the
drugmakers.
But will the
Express Scripts deal set the tone for future expensive specialty drugs hitting
the market? Some closely watching the industry think it could.
“We believe we are
in the early innings of a transformation around specialty formulary exclusions
and believe this could play out in other competitive specialty categories over
time," JP Morgan analyst Lisa Gill said in a research note, Reuters reported.
Miller said Express
Scripts will continue to look to strike similar deals, pointing to new
advancements expected in treatments for cancer, multiple sclerosis and
rheumatoid arthritis.
Hepatitis C was an
attractive area for dealmaking because there were a few new treatments coming
onto the market in a short amount of time, and more could soon join. They all
represent major advancements over previous treatments and have showed equal
effectiveness in clinical trials. This exclusion strategy doesn't work, though,
unless there's a treatment that proves to be just as effective.
"The only way
you do exclusions," Miller said, "is you have to do drugs that
clinically have identical outcomes."
But Dana
Goldman, director of the Schaeffer Center for Health Policy and Economics at
the University of Southern California, warns this could come at the expense of
the patient since not all will respond to the same treatment. Express Scripts
says it won't limit access for hepatitis C patients who need Gilead's drugs,
but drug exclusions could still be problematic for patients, Goldman said.
"The reality
is if you put up barriers for physicians and patients, we know that people
won't have as good access," said Goldman, whose own research found that
limits on what drug availability lead to worse outcomes for psychosis patients.
The Gilead
exclusion is receiving heightened attention because of the high stakes around
treatments involving patients with hepatitis C — a liver disease more than 3
million Americans are infected with. The difference with hepatitis C drugs and
others soon to hit the market is that they can treat a much wider set of
patients than previous high-price specialty drugs have.
"The result of
that is there's enormous pressure on payers to limit access," Goldman
said. "The problem is that there are a lot of patients that would benefit
from access to open formulas." http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/24/one-companys-battle-to-stop-the-wave-of-high-priced-drugs/
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