By: Marcus J. Hopkins, Blogger
Gilead Sciences, makers of the breakthrough Hepatitis C (HCV) drugs, Sovaldi, Harvoni, Epclusa, and Vosevi, have announced that they will be releasing authorized generic versions of its two most popular drugs, Harvoni and Epclusa, in the United States (Hee Han, 2018). The drugs will be introduced into the U.S. market beginning in January 2019 at a list price of $24,000.
If this seems counterintuitive to Gilead’s business model, consider the following: their most recent drug for treatment-naïve patients, Epclusa, was released in 2016 at a Wholesale Acquisition Cost (WAC) of $74,760 for a 12-week regimen or $890 per pill. In 2017, Merck introduced its own pangenotypic drug, Mavyret, at $39,600 for a 12-week regimen, with the recommended dosage for most patients being eight weeks at $26,400. Essentially, Merck came in at a little over 1/3 the cost of Gilead’s pangenotypic drug and became the fastest adopted drug for both Medicaid programs and AIDS Drug Assistance Programs (ADAPs) in just four months (Hopkins, 2018).
This decision comes on the heels of a rough couple of years for Gilead’s HCV market. The company managed to weather near-unrelenting attacks following the October 2014 release of Harvoni at a WAC of $94,500, quickly dubbed “The $1,000 Pill” by media outlets and advocates who were outraged at what they considered to be an outlandish price point despite the medication’s efficacy. So great was the furor that Congress convened hearings on the matter, reigniting the smoldering embers of rage against pharmaceutical company drug pricing. The optics weren’t great for Gilead, but despite that, Gilead’s stock price and profits skyrocketed as they essentially cornered the growing HCV market both in the U.S. and abroad.
Gilead is no stranger to authorized generics. Four years ago, Gilead struck a deal with seven Indian pharmaceutical manufacturers to develop authorized generics to be sold in poor countries roughly $10 per pill, roughly 1% of the U.S. list price (Harris, 2014). This further enraged Western critics who accused Gilead of price gouging. Gilead’s response, at the time, was that they were only charging “…what the market could bear.” Essentially, they were price gouging with the understanding that, regardless of the list price or any pricing negotiations, rebates, or 340B pricing, they were going to dominate the HCV treatment market with their superior product, and the U.S. healthcare system had no real systems in place to combat them.
In 2018, private insurers and public payors alike have quickly switched their preferred drug over to Mavyret from Epclusa. With the introduction of the similarly priced generics from Gilead in 2019, depending upon the uptake by insurers and public payors, it could potentially mean that Gilead could recapture lost ground in the HCV drug marketplace…assuming that other pharmaceutical companies don’t follow suit (they might).
- Harris, G. (2014, September 15). Maker of Costly Hepatitis C Drug Sovaldi Strikes Deal on Generics for Poor Countries. New York, NY: The New York Times: Business: International. Retrieved from: https://www.nytimes.com/2014/09/16/business/international/maker-of-hepatitis-c-drug-strikes-deal-on-generics-for-poor-countries.html
- Hee Han, D. (2018, September 24). Authorized Generics of Epclusa, Harvoni Will Soon Be Available for HCV Treatment. New York, NY: Haymarket Media, Inc.: Monthly Prescribing Reference: News: Generic News. Retrieved from; https://www.empr.com/generics-news/harvoni-epclusa-authorized-generics-available-soon-hepatitis-c-virus-infection-hcv/article/802033/
- Hopkins, M.J. (2018, September 18). HIV/HCV Co-Infection Watch: 2018 Annual Monitoring Report. Washington, DC: Community Access National Network: HIV/HCV Co-Infection Watch. Retrieved from: http://www.tiicann.org/urls/CANN-PPT-1-Hopkins.pptx
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.