PBMs, insurers strike deals for Hep C drugs

February 11, 2015

Discounts and rebates negotiated by some third-party payers are ensuring the place of hepatitis C drugs in their formularies.

Catamaran is the latest PBM to cut a deal for lower-priced hepatitis C treatments for its customers. At the beginning of February, Catamaran added Gilead Sciences’ hepatitis C treatments, Harvoni and Sovaldi, to its national and value formularies, making these drug therapies the exclusive options for patients with hepatitis C.

See also: Pricey hepatitis C pill approved

Catamaran’s decision came a month after CVS/Caremark struck a similar deal with Gilead Sciences to add Harvoni and Sovaldi to its formulary as exclusive options for patients with hepatitis C. Prime Therapeutics LLC has added Harvoni to its preferred drug list in January, but it has placed AbbVie’s Viekira Pak on its formulary too.

See also: FDA approves Viekira Pak to treat hepatitis C

“Prime carefully evaluated all options, including an opportunity for an exclusive agreement with each company,” said David Lassen, PharmD, chief clinical officer, Prime. “However, placing both Harvoni and Viekira on our formulary proved to be the lowest-cost option for our clients and, importantly, prevents member disruption. We are pleased with the agreements we have signed with both companies and feel we’re positioned well for the future in hepatitis C treatment.”

Price-point pushback

Express Scripts led the challenge of hepatitis C drug pricing back in April 2014. Express Scripts Chief Medical Officer Steve Miller, MD, told 400 of his largest clients that “Express Scripts would not stand for unfair drug pricing,” referring to the high price of Gilead Science’s Sovaldi, a breakthrough treatment for hepatitis C. Each tablet was priced at $1,000; when Sovaldi was used in combination with other medications, the price tag to treat one patient came close to $150,000.

See also: Sovaldi approved to treat chronic hepatitis C

“For the first time in the history of pharmaceuticals, we were seeing orphan-drug pricing for a non-orphan drug. And the total cost impact was going to be devastating for the U.S. healthcare system,” Miller said in the company’s Insights/Specialty Medications report, posted Jan. 27.

Express Scripts negotiated a contract with AbbVie, the manufacturer of Viekira Pak, which also achieved exceptional cure rates and adherence rates. “AbbVie shared our goal of finding a price that would be both sustainable and also open access to patients who previously weren’t able to be treated,” Miller said.

Discounts and rebates

Not only have the nation’s largest PBMs struck deals with the manufacturers of these breakthrough therapies for hepatitis C; so have insurance companies.

Aetna, Anthem, Humana, and UnitedHealth Group have all favored Gilead’s drugs. Blue Shield of California has chosen AbbVie’s Viekira Pak as its preferred treatment for its members. In addition, for its Medicaid beneficiaries, the state of Missouri has also decided to cut a deal with AbbVie, with savings on overall treatment costs of 30% to 40%, as reported in The Wall Street Journal. Other state Medicaid programs will also be negotiating for discounts for their patients with hepatitis C.

The New York Times reported Feb. 3 that the expected “gross-to-net adjustment, a measure of discounting from list price, would average 46 percent for [Gilead’s] hepatitis C drugs in the United States in 2015, more than double the 22 percent in 2014. For certain Medicaid programs and the Department of Veterans Affairs, [Gilead executives] said, rebates exceeded 50 percent.”

 

A question of values

John F. Milligan, PhD, Gilead’s president and chief operating officer, spoke about the remarkable improvement in patients with hepatitis C following treatment with the new therapies. He delivered his remarks during the 17th Annual BIO CEO & Investor Conference in New York.

“In HCV, we are seeing patients get remarkable improvement, not only in their liver but overall healthcare status and cognitive function,” Milligan said. “People can go back to work and regain their lives, their hobbies. That stuff isn’t valued by payers in any great way, which was surprising to me.”

He continued, “We don’t have conversations like that in oncology. Keeping someone who is 75 years old alive for five more years, there is not a value creation. We understand that is valuable to the person and that person’s family, but not necessarily valuable to society than getting a person back to work would be,” Milligan continued. “There is a disconnect between oncology products and these [hepatitis C] kinds of products. I think we need to have a different way to think about it as a healthcare system - the benefit it provides to all vs. the benefit it provides to one.”

 

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