Are HCV Price Wars Coming?

By: Marcus Hopkins, Blogger

Here at HEAL Blog, one of our primary concerns has been with the pricing of new HCV (Hepatitis C) treatments. As we’ve previously reported, the costs of both Sovaldi (Gilead) and Olysio (Janssen) have prompted both private insurance companies and Medicare to balk at the amount they’re expected to pay for treatment. The issue of pricing has gotten so much media attention that there was recently a Senate panel on the issue (specifically related to Sovaldi).

These prices offer a unique opportunity for AbbVie to enter the market with their own combination therapy (as-yet-unnamed), and potentially start a price war between manufacturers. While this may be good for both AbbVie and consumers, there are certain caveats that come with the company’s product:

In May of this year, AbbVie CEO Richard Gonzalez vowed not to enter a price war with Gilead and Janssen, stating that he would allow the “…attributes of [the] product [and] the performance [speak] for itself.”

Image of pennies stacked on top of each other.

While it’s true that AbbVie’s product has comparable “cure” rates with Sovaldi (hovering around the mid-90s, in terms of percentages), what it does not share is simplicity or tolerability.

Sovaldi is a single-dose daily medication, whereas as AbbVie’s combination therapy is a five-pill regimen taken over the course of a single day that includes the use of Norvir, an antiretroviral that can cause unwanted interactions with other drugs. This places extra pressure on patients who are less likely to comply with the treatment regimen if they feel that it is a hassle to do so.

Additionally, they may soon have to compete with Gilead, yet again, with Sovaldi’s second iteration – a dual-drug combo that shows promise of an eight-week treatment period, rather than the single pill’s twelve-week period.

It is difficult to fathom that AbbVie’s product, regardless of its efficacy, will be able to stand on its own merits alone without a significant reduction in price when compared to Sovaldi. If CEO Gonzalez remains true to his word, it is unlikely that AbbVie will be able to make any significant headway in the treatment market.

Treatment regimens aside, one of the primary issues facing AbbVie is the reality that they are entering a market that is all but saturated with marketing on behalf of Gilead and Janssen. As someone who has worked in event planning, whenever there’s a competing event, he who gets his marketing out, first, is the one who wins the day.

Right now, the first word in HCV treatment is “Sovaldi,” and without a memorable drug name and marketing campaign, that word is unlikely to change to “As-Yet-Unnamed AbbVie HCV Treatment.”

There is, however, some hope – if consumers, activists, medical professionals, and advocates can place enough pressure on AbbVie to compete with Sovaldi and Olysio on the pricing front, they may be able to penetrate the very lucrative HCV market. Offering a treatment regimen that, although more complicated than its rivals offers similar cure rates, at a significantly lower price point could allow AbbVie to turn the tide in its favor. The net benefit, however, is likely to better serve AbbVie and insurance providers, rather than the consumer.

This, however, is the game we play in the advocacy arena – even though a lower price will be “better,” when will “better” become “affordable?” With these drugs being so new, it is unlikely that affordability will be a concept coming to a consumer near you.

Much of the problem associated with pharmaceutical pricing comes from the fact that it is currently illegal for Medicare, the party who will likely end up enduring the brunt of these HCV prices (given the average age of HCV patients), to enter price negotiations with pharmaceutical companies. Allowing this program to do so would no doubt have a highly beneficial result for consumers; as such, Big Pharma has gone well out of its way to ensure that this will likely never come to pass.

This leave us in the lurch, hoping against hope that AbbVie’s Gonzalez will relent and enter into a pricing war. Whether or not this comes to pass, however, has yet to be seen.

Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

Portions of this article are informed by Crain’s Chicago Business authors, Andrew L. Wang and Joe Cahill. Links to their original articles are listed below:

http://www.chicagobusiness.com/article/20140510/ISSUE01/305109990/abbvies-84000-question

http://www.chicagobusiness.com/article/20140516/BLOGS10/140519840/why-abbvie-needs-to-rethink-the-price-of-its-hepatitis-c-drug

 

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