By Marcus J. Hopkins, Blogger
On January 28th, 2016, the Food and Drug Administration (FDA) announced the approval of Merck’s new HCV drug, Zepatier (elbasvir and grazoprevir) at the introductory price of only $54,000 for a twelve-week treatment. That’s roughly a 42% discount to market leader Gilead’s $13 billion-a-year blockbuster, Harvoni, and a slightly smaller discount to AbbVie’s Viekira Pak (Nisen, 2016).
That’s right! For only just above the annual median income for an American in the U.S., you, too, can treat Hepatitis C!
Although it’s fantastic news that a pharmaceutical company has finally had the gumption to release a cheaper HCV drug to serve in direct competition with Gilead, AbbVie, and Bristol-Myers Squibb (BMS), it’s equally sad that twelve weeks of treatment can ostensibly cost more money than most Americans make in a single year. Essentially, while Gilead’s sticker shock is like being punched in the stomach, Merck’s price point is like being punched in the stomach while wearing a large pillow over your front.
Zepatier is seventh HCV-specific drug to come onto the market since 2013, which is virtually unheard of, in terms of treatment options. Outside of HIV, very few diseases receive this much attention in the way of research and development. It seems like a new drug or two is approved and released in the market every other quarter, or so, which creates the guise of competition in the pharmaceutical market. Still, a $54,000 price point serves as a dinner bell to other competitors that Merck is truly trying to undercut Gilead, AbbVie, and BMS, hoping that their significantly lower price (and virtually identical Sustained Virologic Response (SVR) with 95% success rate) will convince physicians and payers to push patients into their treatment regimen in lieu of the more established brands.
So, will the other drug manufacturers tacitly agree to play ball with Merck in relation to their drug pricing? My gut instinct says, “Sadly, no.” On Gilead’s part, they have the home court advantage; Harvoni’s success rate is already well established in the medical field, and its low incidence of side effects and intolerability speaks highly in its favor. In their view, it’s unlikely the doctors will opt for Zepatier over their product, because it’s a known entity.
Even though Zepatier has an arguably as good and potentially better safety factor, patients need to undergo some testing to check for polymorphisms (genetic differences) with which Zepatier doesn’t work as a well. That’s a potential hurdle in an otherwise equal product.
Another pin in Gilead’s cap is that Zepatier has been approved only for treatment of HCV Genotypes 1 and 4; Gilead is gearing for yet another drug approval in the second or third quarter of 2016, and this new drug will be pan-genotypic – it can be used to treat all genotypes of HCV. What does that mean for consumers? An eighth treatment option, for certain, but there’s no guarantee that this new product will be any cheaper than Sovaldi and Harvoni. One really can’t blame Gilead for their high prices – the first horse out of the gate gets to set the pace, and for the most part, other competitors have followed their lead.
Issues of pricing are complicated. Honestly, the Wholesale Acquisition Cost (WAC), is essentially a useless metric, because manufacturers aren’t transparent in how they arrive at that price and they also regularly enter pricing agreements with payers. So, who, exactly, is paying the WAC? Some payers receive rebates and discounts up to 50% of the WAC, so what’s the point of even having a WAC, in the first place, if you’re going to make the price of the drug a sliding scale?
Good on Merck for deciding to enter the race at a much reduced price point. It remains to be seen, however, if they can break into an already crowded field.
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.