[Ip-health] WSJ: CVS Gives Preferred Status to Gilead¹s Hepatitis C Drugs

Baker, Brook b.baker at neu.edu
Thu Jan 8 05:37:55 PST 2015

Companies also do it on the basis of stringent secrecy so that they can
continue to extort higher prices from smaller insurers and consumers.  The
lack of transparency between Gilead's new price and AbbVie's also means
that analysts and advocates will not be able to measure the level and
conditionalities of price discounts and there are reduced opportunities
for additional price pressure and open competition between the drug
company oligopolies.

It is a common misperception that price secrecy leads to better deals from
drug companies.  Their executives laugh all the way to the bank in the
wake of this big lie.  Especially in the context of global HIV and
comprehensive reporting of the price of antiretrovirals, we have seen much
more price uniformity (except where patents status differentiate access)
and much lower prices.  Of course, most of price reductions have resulted
from robust generic competition and the assured purchasing power of the
Global Fund and PEPFAR.

Professor Brook K. Baker
Northeastern U. School of Law
Affiliate, Program on Human Rights and the Global Economy
416 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
Senior Policy Analyst Health GAP (Global Access Project)
NGOs Board Member UNITAID
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
skype: brook_baker
b.baker at neu.edu

On 1/8/15 5:20 AM, "Dean Baker" <Dean.Baker1 at verizon.net> wrote:

>yes, insurers do it all the time
>On 1/8/2015 3:41 AM, Céline Grillon wrote:
>> Hello,
>> Does someone know if this kind of preferred status agreement is common
>>in the US ?
>> Thanks
>> Céline Grillon
>> Harm Reduction, HCV & HIV
>> Advocacy Officer /Chargée de plaidoyer
>> Réduction des Risques, VHC et VIH
>> celine.grillon at medecinsdumonde.net
>> Médecins du Monde
>> 62 rue Marcadet 75018 PARIS
>> t. + 33 (0) 1 44 92 13 02
>> m: + 33 (0) 6 50 01 39 10
>> www.hepCoalition.org
>> -----Message d'origine-----
>> De : Ip-health [mailto:ip-health-bounces at lists.keionline.org] De la
>>part de Steven Knievel
>> Envoyé : mercredi 7 janvier 2015 17:14
>> À : Ip-health at lists.keionline.org
>> Objet : [Ip-health] WSJ: CVS Gives Preferred Status to Gilead¹s
>>Hepatitis C Drugs
>> CVS Gives Preferred Status to Gilead¹s Hepatitis C Drugs AbbVie¹s
>>Viekira Pak Will be Available If a Patient Receives Medical Exception or
>>Prior Authorization
>> AbbVie¹s Viekira Pak isn¹t included on CVS Health¹s drug formulary.
>>Bloomberg News By Joseph Walker Updated Jan. 5, 2015 12:27 p.m. ET
>> The battle for supremacy in one of the fastest-growing pharmaceutical
>>markets intensified on Monday, with CVS Health Corp. saying it will make
>>Gilead Sciences Inc. ¹s drugs Sovaldi and Harvoni the exclusive options
>>for patients with hepatitis C.
>> A competing treatment made by AbbVie Inc., called Viekira Pak, will be
>>excluded from CVS¹s drug formulary of approved medications, except in
>>cases when it is medically necessary, CVS said in a letter sent to
>>employment-benefit consultants that was reviewed by The Wall Street
>> The letter from CVS, a retail chain and pharmacy-benefits manager,
>>doesn¹t indicate whether Gilead gave CVS a discount on the expensive
>>hepatitis C drugs. Sovaldi costs $84,000 per patient and Harvoni $94,500
>>per patient in the U.S. for 12-week treatments. Gilead and CVS declined
>>to comment on specifics of the deal.
>> ³Our goal was to create the lowest net-cost solution for the entire
>>population of patients with all genotypes of hepatitis C,² Christine K.
>>Cramer, a CVS spokeswoman, said in an email. CVS made its decision based
>>on a clinical review of the different hepatitis C regimens and their
>>costs, she said.
>> AbbVie¹s Viekira Pak costs $83,319 per patient in the U.S. for a
>>12-week regimen.
>> World-wide sales of new hepatitis C drugs, which have higher cure rates
>>and fewer side effects than older therapies for the viral liver disease,
>>are estimated to have reached $13 billion in 2014, according to RBC
>>Capital Markets. The hepatitis C drug market is expected to grow 42% to
>>$18.5 billion this year, RBC said.
>> Doctors and patients have praised the drugs¹ cure rates, but insurers
>>and state health officials have criticized their pricing, calling it
>>unsustainable. Many state Medicaid programs have limited access to the
>>drugs because of the cost.
>> Express Scripts Holding Co. , the largest U.S. pharmacy benefit
>>manager, said in December it had agreed to give preferred formulary
>>status to AbbVie¹s Viekira Pak in exchange for a discount from AbbVie.
>>Express Scripts, which has been among the most vocal critics of Gilead¹s
>>pricing of hepatitis C drugs, said it would exclude from its formularies
>>Gilead¹s drugs for hepatitis C patients with the most common form of the
>>disease, known as genotype 1. Express Scripts also said it would make
>>AbbVie¹s drug available to all patients, regardless of their disease
>> Gilead shares fell 13% through the end of December after the agreement
>>between Express Scripts and AbbVie was announced, with some investors
>>worried AbbVie would use price discounting to gain a larger share of the
>>hepatitis C drug market than anticipated. The Nasdaq Biotechnology Index
>>fell 4.1% over the same period as some analysts worried of increased
>>pressure from pharmacy-benefit managers and health insurers on drug
>> On Monday, shares of Gilead were up 2% to $96.79. AbbVie shares fell
>>1.9% to $64.65.
>> CVS¹s policy will go into effect Jan. 7 and will apply to all hepatitis
>>C genotypes. The company¹s policy will apply to Medicare and Medicaid
>>patients who receive drug benefits through CVS, as well as beneficiaries
>>covered under health plans sold through marketplace exchanges and CVS¹s
>>standard commercial formulary. The change won¹t necessarily apply to CVS
>>customers who use custom formularies, the CVS letter said.
>> Sales of Gilead¹s Sovaldi, approved in late 2013, were $8.55 billion in
>>the first three quarters of 2014 in what is thought to be the most
>>successful drug launch ever. Harvoni was approved by the Food and Drug
>>Administration this past October as the first treatment for genotype 1
>>cases of hepatitis C that doesn¹t require two older drugs known to cause
>>serious side effects.
>> AbbVie received approval for its Viekira Pak on Dec. 19.
>> ³Gilead is very pleased to have reached an agreement with CVS that will
>>enable access to Harvoni for people living with HCV,² Amy Flood, a
>>Gilead spokeswoman, said in an email.
>> Viekira Pak is thought to be as effective as Gilead¹s drugs in genotype
>>1 patients, though not as convenient because it requires patients to
>>take more pills at one time.
>> ³Our multiyear agreement with Express Scripts is an example of how we
>>will ensure all hepatitis C patients beyond just the very sickestŠgain
>>access to treatment,² David Freundel, an AbbVie spokesman, said in an
>> ³We welcome others to follow our lead,² Brian Henry, an Express Scripts
>>spokesman, said of CVS¹s agreement with Gilead.
>> ‹Peter Loftus contributed to this article.
>> Write to Joseph Walker at joseph.walker at wsj.com
>> Steven Knievel
>> Organizer | Global Access to Medicines Program Public Citizen |
>>Protecting Health, Safety and Democracy
>> TEL: +1 202-588-7769
>> 1600 20th St. NW, Washington, DC 20009
>> URL: http://www.citizen.org/access
>> Twitter: @PCMedsAccess
>> Public Citizen Foundation participates in the Combined Federal Campaign
>>with the CFC Code 11168.
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>Dean Baker (baker at cepr.net)
>Center for Economic and Policy Research 1611 Connecticut Ave., NW
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