Express Scripts looks to force Gilead to cut price of Sovaldi


Express Scripts (ESRX) plans to ask its clients, which include employers, health insurance plans and government agencies, to join a group that would stop using Gilead's (GILD) Sovaldi treatment for Hepatitis C once the FDA has approved rival drugs.

Express Scripts has already said it could block reimbursement for Sovaldi once other therapies are on the market, which could come next year.

Gilead has come under intense criticism for charging $84,000 for a 12-week course of Sovaldi.

Express Scripts' annual Drug Trend Report estimates that spending on specialty drugs such as Sovaldi increased 14% in 2013 and forecasts it will jump a further 63% by the end of 2016.

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Comments (23)
  • 13302632
    , contributor
    Comments (1772) | Send Message
     
    Its a cure. I really don't get it. What does chemo for cancer treatments cost? $84000 is a very effective price for a cure. Is it that express scripts doesn't want to sell something that they can't markup hugely and will make little profit because of its limited course?

     

    Competition and a natural decay of price (once investment is recovered) will both lower future price of Sovaldi without any special measures. I doubt competitors are going to sell a lot cheaper until they recover their investment as well. I think this is yet more grandstanding without substance behind it. Nevertheless, it is more bad publicity for Gilead when people should be talking about lives saved and good publicity from the release of this breakthrough drug.

     

    I believe the problem in calculating cost, is that people are not figuring future cost savings because it is a cure. Insurance funding should be able to justify borrowing against future saved monies to pay the present fee. It is like buying an annuity that will return ongoing benefits. Insurance companies are fully capable of making this tradeoff and amortizing the cost, but it is not in their interest to educate the public on this.

     

    Ironically, as it exist now if you pay even more for ongoing treatment of chronic illness for years and ultimately potential liver damage and transplant that cost is OK.
    8 Apr 2014, 08:32 AM Reply Like
  • Rondor1
    , contributor
    Comments (36) | Send Message
     
    Dont ask a politician or the person paying the bill to use logic. One only cares to remain in power and the other is nothing more than a capitalist on the buying end.
    8 Apr 2014, 08:38 AM Reply Like
  • Brunello52
    , contributor
    Comments (38) | Send Message
     
    This is just an opinion! Maybe...Express Scripts doesn't want a cure. Cure the disease, and they lose a customer. There's more greed, I mean profit, if you can sell someone a maintence drug for the rest of their lives. I know this is an appalling and disgusing theory on my part, but that's life, or should I say that's business. I remember many years ago, while in college for engineering, my professor said the automobile industry can build a car engine (titanium) that would last a life time. But the industry wants your engine to fail every 5 - 10 years; so they can sell you another one!
    8 Apr 2014, 08:45 AM Reply Like
  • Cleatus in Cleveland
    , contributor
    Comments (38) | Send Message
     
    Studies have clearly indicated cost savings by providing a >90% cure rate versus long term treatment with less effective drugs or organ transplants. Are we to assume that beyond promoting "generics" PBM will now organize boycotts of certain drugs or companies?
    8 Apr 2014, 09:04 AM Reply Like
  • moksha22
    , contributor
    Comments (54) | Send Message
     
    In my opinion that borders on blackmail. GILD should sell their product for their price of choice. That's free market. Influencing others from behind isn't, that's soviet style.

     

    Anyway:
    33,672 prescriptions for Gilead's (GILD) Hep C treatment Sovaldi were filled in the first 12 weeks of commercial availability. Sales could reach $5B the first year making it the most successful pharmaceutical product launch ever.

     

    Let's see, if other companies can develop better and cheaper therapies. I don't think so.
    8 Apr 2014, 09:07 AM Reply Like
  • sperkins55
    , contributor
    Comments (2) | Send Message
     
    $84,000 to cure Hep C is a bargain!
    8 Apr 2014, 09:11 AM Reply Like
  • badeconomy
    , contributor
    Comments (251) | Send Message
     
    This is a old news which amounted to nothing Insurance companies to reduce the price.
    8 Apr 2014, 09:20 AM Reply Like
  • onewonders
    , contributor
    Comments (4) | Send Message
     
    Bless your hearts, commenter's. Ever been seriously ill? Ever been priced out of treatment? I'm guessing no. What could possibly be more important than money in your pocket? Believe it or not you and your loved ones will be sick one day and even eventually die. I hope it's not too costly for you to get treatment. Medicare funding is fragile and maybe the costs will prove to be too much or the system will crash. Judging by your logic here, you will all eschew costly treatment as an impractical waste of money. As Ebenezer Scrooge once said when speaking of the needy, let them die and decrease the surplus population. It just makes good business sense.
    8 Apr 2014, 09:34 AM Reply Like
  • 13302632
    , contributor
    Comments (1772) | Send Message
     
    Gilead has a need based program where they subsidize hugely the medicine through charity. One of the big selling points about Obamacare was to lessen future costs by current preventive care. GILD news Hep C wonder drug does just that. It reduces cost of health care (when long term implications are included). GILD bought Pharmassett for 11B to spur fast development of this drug. Their total investment is of course much larger. If they don't get approval all that money is lost. If competitor beats them to the punch or more efficacious they lose money. If they are not paid for the risk undertaken to develop this drug the whole drug development industry fails and many will die that wouldn't have otherwise. This drug will be eventually genericized and also competitive pressures will lower price naturally. If there was a cancer cure do you think people would pay $84000 instead of chemo? This will reduce transplants, hospital stays, and chronic care. Trying to take one price in isolation without considering alternative treatment costs is greater fodder for low information voters and others, but things are not that simple.

     

    Our drug development industry is based on capitalism and many many drugs that save lives are only around because of capitalism. The idea that not everyone can't afford the very best treatment available is no different from not everyone being to afford the very best new electronic item. But the beauty of capitalism is new products get commoditized over time and eventually everyone can afford them (e.g. computers, TV, etc). Whereas with socialistic systems the products are never invented and they afford what they can import or copy. If you look around the world, the more efficient the economy the better off everyone is the society is (all boats raised). When you lower efficiency through bad attempts at redistribution and regulation then all boats are lowered except possibly the super rich (including the poor). If you took all the money from the super rich it would not last long and you would find everything is even worse, because at least they invest more efficiently than the government.
    8 Apr 2014, 10:20 AM Reply Like
  • Rasna
    , contributor
    Comments (104) | Send Message
     
    A study needs to be done or an analysis needs to be performed comparing the Sovaldi treatment for Hepatitis C at $84K for 12 weeks with a 90% cure rate to the existing treatments that might include transplants, hospital stay ongoing care and how long that takes costs and cure rate with side effects.

     

    C'mon 1299741! Do you really think that the regimen before the Sovaldi treatment for Hepatitis C was more efficacious, took as much or less time, total cost was a lot less, had as high a cure rate and had fewer side effects? The fact that there were as many prescriptions written since its launch a few weeks ago is an indication that doctors who know a lot more than you or I believe that Sovaldi is a significant step forward for their patients.

     

    The cost argument is a "red herring" used by politicians and companies to promote agenda's that have nothing to do with curing patients and improving the quality of their lives quickly compared to the alternatives.

     

    I hate American politics and dumb arguments. Solvadi appears to be a good drug that will help people with a terrible disease.
    8 Apr 2014, 11:00 AM Reply Like
  • 7777777 angels
    , contributor
    Comments (246) | Send Message
     
    Now this is intelligent logic. Thank you.
    8 Apr 2014, 12:46 PM Reply Like
  • onewonders
    , contributor
    Comments (4) | Send Message
     
    13302632 wrote: Gilead has a need based program where they subsidize hugely the medicine through charity. Gilead's program, like all charity, has limits.

     

    Response: I am aware of the program. It will cover the costs for some who cannot afford the cost of staying alive.

     

    13302632 said: GILD bought Pharmassett for 11B to spur fast development of this drug.

     

    Response: Gilead bought Pharmasset because Pharmasset developed PS-7977 (now sovaldi) because the company could see the potential of this breakthrough product. Gilead is developing ledivaspir as a companion. Gilead was widely criticized for the 11B purchase. The prevailing sentiment is that Gilead over payed.

     

    13302632 wrote: If competitor beats them to the punch or more efficacious they lose money.

     

    Response: Abbvie, Merck and Bristol Meyers Squibb will cause them to lose money when their drugs hit the market within the next year if their pricing is more affordable.

     

    13302632 wrote: If they are not paid for the risk undertaken to develop this drug the whole drug development industry fails and many will die that wouldn't have otherwise.

     

    Response: Abbvie, Merck and Bristol Meyers Squibb will cause them to lose money when their drugs hit the market within the next year. The whole drug development industry will not then fail or cause untold death and destruction.

     

    13302632 wrote: This drug will be eventually genericized...

     

    Response: When the patent runs out in about 15 years it will.

     

    13302632 wrote: If there was a cancer cure do you think people would pay $84000 instead of chemo?

     

    Response: Those who could afford to would and those who have insurance companies that can't evade paying for the treatments. By the way, people who cannot afford chemo die every day. Over pricing of pharmaceuticals is a serious problem that is putting a strain on Medicare and private health insurance costs alike.

     

    13302632 wrote: Trying to take one price in isolation without considering alternative treatment costs is greater fodder for low information voters and others, but things are not that simple... When you lower efficiency through bad attempts at redistribution and regulation then all boats are lowered except possibly the super rich (including the poor). If you took all the money from the super rich it would not last long and you would find everything is even worse, because at least they invest more efficiently than the government.

     

    Response: 13302632 wrote: Rationalizing extortive pricing without considering alternatives and presenting middle school level lectures featuring romanticized notions capitalism vs. socialism is boring and irrelevant to this discussion.

     

    13302632 wrote: The idea that not everyone can't afford the very best treatment available is no different from not everyone being to afford the very best new electronic item.

     

    Response: Yes, it is very different. I'm sorry you are not able to see the difference.

     

    FULL DISCLOSURE: I own quite a bit of Gilead stock.
    8 Apr 2014, 12:55 PM Reply Like
  • onewonders
    , contributor
    Comments (4) | Send Message
     
    Express Scripts (ESRX) plans to ask its clients, which include employers, health insurance plans and government agencies, to join a group that would stop using Gilead's (GILD) Sovaldi treatment for Hepatitis C once the FDA has approved rival drugs. I read this as putting Gilead on notice that extortive pricing can only last until the competitors catch up. BTW, Olysio, a protease inhibitor by J&J is also wildy over priced. It is nearly as expensive as Sovaldi.
    8 Apr 2014, 12:55 PM Reply Like
  • 13302632
    , contributor
    Comments (1772) | Send Message
     
    Other competitors have also invested a lot of money. It remains to be seen whether their drug pricing will be manifestly different in a true competitive sense (efficacy vs cost) than Sovaldi. I suspect they won't for a while because they will need to recover costs as well. All drug prices come down over time as costs are recovered and new competitors/alternativ... generics arrive.

     

    The cost curve reduction curve is not different from electronics. I'm sorry your emotions can't handle truth. What was the cost of CAT scans, transplants, and many other modern medical advances when they were first developed? The rich essentially paid for many advances and get the first use, but then the costs invariably come down and it becomes accessible to all.

     

    I have very complex notions of capitalism, socialism, libertarianism, etc. I could debate for days on these issues. However, these forums are not conducive for that debate. I am and engineer, and I try to dispassionately figure out the greater good of various policies. I strongly believe most of the socialistic redistribution cures are worse than the disease (cost vs benefit analysis). An accelerating growth economy improves quality of life and provides the treasure to support our charitable desires. Clearly, there can be extremes and injustices in any system, but to think that government committees are going to solve problems than markets shows a lack of insight and history. There are plenty of examples of attempts by committee run societies to compete against more free market and they have failed miserably (cold war). The socialistic philosophy ends up by limiting the whole society and there are still plenty of people (government elites) that end up more equal than others. And the bad news is they split a smaller pie.
    8 Apr 2014, 02:26 PM Reply Like
  • goneskuba
    , contributor
    Comments (138) | Send Message
     
    I couldn't agree more, If you want cheaper meds, make research and development cheaper. In a free market economy, everyone along the way will try to make a profit. So, don't pay for it in the US and the wealthy will just travel elsewhere to get it, akin to Jobs getting his liver in China.

     

    Didn't really see much fanfare or Congressman sending a letter to Apple for unethical/moral turpitude when it came to Jobs buying and transplanting his liver in China.

     

    As for the poor and unable to get their hands on this medication, I would 1st check their respective blood toxicologically to ascertain recent narcotic intake. If so, bye bye cure, coz they will reinfect! If not, then government subsidies in the more Democratic states then the more Republican states

     

    Cure = Not Forever if you still play in a dirty sandbox
    8 Apr 2014, 04:17 PM Reply Like
  • onewonders
    , contributor
    Comments (4) | Send Message
     
    Gilead over payed for acquisition of Pharmassett. They are over charging to justify that gamble. Your opinions about socialism have nothing to do with this discussion. AbbVie will beat Gilead's price and their drug combination has a 97% cure rate (but a slight larger pill burden). Most patients will take the lower priced drug with a higher cure rate regardless of the fact that they will have to take more pills. Side effect profiles are similar and mild compared to standard of care. Bristol Meyers and Merck are also developing HCV drug with cure rates in the upper 90 percentiles. I know you want to frame this as a discussion of free markets, liberty and whatever, but that is not issue here. I'm sorry your desire to pontification make you unable to handle the truth.
    9 Apr 2014, 12:23 AM Reply Like
  • 13302632
    , contributor
    Comments (1772) | Send Message
     
    I own ABBV as well as GILD. I am aware of the ABBV drug status. But I believe they have spent at least 5B in development and they are late to market. I doubt they will charge much less but I do expect they will of course get significant (up to 30%) market share after a while. There is room for both to make money and I doubt either will sacrifice themselves to undercut the other.

     

    You are actually making my point for me. Why does the government need to get involved? As competition arrives (because this is big market and everyone wants a piece) the price will become more competitive. That works without committees and grandstanding by congressman.

     

    Gilead already provides discounts to entities such as VA and adjusts price based to per capita income in other countries BTW. I don't know what the "proper" price is or even if there is such a thing. Pricing is an inexact science and there are many tradeoffs.

     

    I think Gilead's sovaldi price is certainly not out of the normal pricing for high development cost drugs. As others have stated, current drug treatments (much less efficacious) are in the same price range.

     

    You keep saying they overpaid (11B), but they look to bring in 5-9B just this year before other competition arrives which will then leave them with approximately same investment costs as ABBV. Many thought at the time that they overpaid for Pharmassett, but now most analysts see it as a brilliant move.

     

    It appears that a number of lives were also saved by the accelerated development. But don't let that get in the way of your thinking. The sickest patients will be treated first and I suspect by the time it gets to the infected showing few symptoms the price of treatment will be way down forestalling the impending doom of the healthcare system by these drugs.
    9 Apr 2014, 02:30 PM Reply Like
  • virgo349
    , contributor
    Comments (209) | Send Message
     
    Esrx wants a rebate, and not just a run of the mill one.... Secret behind the scene rebates are common for brand name medications... they average around $30+/month for maintenance prescriptions... the PBM (esrx) usually pockets most of the rebate (they claim to pass this on to employers, but the whole thing is done in secret so no one really knows except esrx) My guess is that the rebate negotiations haven't gone the way express scripts wants; they want a bigger piece of the HepC space... At the end of the day, Sovaldi's savings comes from the MEDICAL side by preventing cirrhosis, cancer, transplant, etc... Sorry esrx, you do not have a choice in this... have fun when employers drop you for PBMs that actually understand Sovaldi's savings. HepC cure rates & complication rates are not that difficult to understand
    8 Apr 2014, 10:36 AM Reply Like
  • bjk413
    , contributor
    Comments (14) | Send Message
     
    Awesome, maybe ESRX should decide what medication you should take. Why do you even need a Dr.? what do they know? Let ESRX devise the most cost effective drug regimen for you. Because that's good medicine!

     

    Also ESRX doesn't pay for liver transplants, or your long hospital/hospice stay while your liver degrades into a useless scarred hunk. Gee, I wonder why they don't see the cost benefit of this treatment.
    8 Apr 2014, 10:58 AM Reply Like
  • duhaus
    , contributor
    Comments (320) | Send Message
     
    It's selective perception . . they don't see what they don't want to see. There's a certain reality that must exist for ESRX to maintain their status quo (i.e. the profits they want) so they simply create, delete or manipulate facts to support that reality, just like religions.
    8 Apr 2014, 11:05 AM Reply Like
  • Snapcap
    , contributor
    Comments (191) | Send Message
     
    I wonder what the liability cost is, when refusing a patient life saving medicines because they cost too much. Looks like a fertile field for lawyers.
    8 Apr 2014, 03:17 PM Reply Like
  • dragoncave
    , contributor
    Comment (1) | Send Message
     
    I am one of many HVC patients that are in a holding pattern, waiting for approval of Gilead's one pill therapy. If I were to agree to the present treatment, my co-pay would be $10,500. Not much is ever mentioned about the high cost of that.
    9 Apr 2014, 09:25 AM Reply Like
  • marxrx
    , contributor
    Comments (3) | Send Message
     
    Looking for more stable income and capital preservation through a diversified portfolio because depending on employers doesn't work.
    9 Apr 2014, 02:25 PM Reply Like
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