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The price war over new hepatitis C drugs just heated up.
The nation's largest pharmacy benefits manager, Express Scripts, said its largest plan will cover only AbbVie's newly approved hepatitis C regimen for patients with the most common form of the virus. Starting Jan. 1, it will exclude drugs from Gilead Sciences and Johnson & Johnson for that indication.
AbbVie's Viekira Pak was approved Friday, and the company said it will have a price of $83,319. In an interview on CNBC's "Squawk Box," Express Scripts Chief Medical Officer Steve Miller declined to disclose the terms of the deal but said Abbvie's discount was big enough to allow Express Scripts to recommend treating all patients with genotype 1 hepatitis C.
"We think when we find partners like this. We can really move drug prices and get more patients treated and more patients cured," he said.
Asked whether Express Scripts would form similar deals in other therapeutic areas including diabetes and cancer where there are high drug costs and multiple drugs on the market, Miller said he saw opportunities in those categories. He added that companies must do something because drug prices have become unsustainable.
Gilead's Sovaldi sparked a fierce debate over the cost of drugs after it was approved in December 2013 and its price set at $84,000 for 12 weeks of treatment, or about $1,000 a day. The drug, along with Johnson & Johnson's Olysio and Gilead's combination medicine, Harvoni, represent a significant improvement over previous therapies, which didn't cure all patients, were given by injection and came with side effects that could make them difficult to take.
The ease of use and higher cure rates drove swift uptake of the drugs; Sovaldi brought in $8.6 billion in revenue in the first three quarters of 2014. Harvoni, a combination of Sovaldi and another drug, costs $94,500 for 12 weeks, or about $63,000 for patients who only require eight weeks of treatment. Analysts estimate the drug may draw $2.8 billion to $3 billion in fourth quarter revenue for Gilead, after approval on Oct. 10.
AbbVie's regimen includes several pills a day, taken at different times, while Gilead's Harvoni is one pill taken once a day. Some patients on AbbVie's therapy may also require ribavirin, another drug that can carry unpleasant side effects.
Express Scripts said its independent Pharmacy & Therapeutics Committee determined AbbVie's Viekira Pak to be "at least clinically equivalent" to Harvoni and Sovaldi, and that it would make the therapy the exclusive option for genotype 1 patients with hepatitis C on its National Preferred Formulary, which covers about 25 million Americans.
Sovaldi and Harvoni, as well as J&J's Olysio, will be excluded from the National Preferred Formulary, though patients who have already begun treatment before Jan. 1 will continue to receive coverage. Sovaldi will remain on the formulary for patients with other kinds of the virus who have advanced liver disease, Express Scripts said.
About 3.2 million people in the U.S. have hepatitis C, according to the Centers for Disease Control and Prevention. Three-quarters of those have genotype 1, Express Scripts said. The viral infection affects as many as 150 million people worldwide; it is spread through the blood and can lead to liver failure and liver cancer. As many as 500,000 people worldwide die of hepatitis C-related liver diseases each year, according to the World Health Organization.