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Gilead fights back: CVS to cover its hepatitis C drugs exclusively
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http://www.cnbc.com/id/102310444
Gilead Sciences' hepatitis C drugs, Sovaldi and Harvoni, will get exclusive coverage on several plans from CVS/Caremark, the pharmacy benefits manager said Monday, taking the opposite stance from competitor Express Scripts.
Gilead shares spiked on the news Monday, driving up the entire biotech sector. Last month, shares of Gilead swooned after Express Scripts said it would exclusively offer competitor AbbVie's newly approved hepatitis C therapy on its largest plan.
"CVS/Caremark has completed a thorough evaluation of the existing and new hepatitis C therapies that are now available in the marketplace," Chris Cramer, a spokeswoman for CVS Health, said in an email statement. The news was first reported by Dow Jones. "As a result of that evaluation, effective January 7, 2015, Harvoni and Sovaldi-manufactured by Gilead Sciences Inc.-will be exclusive on the CVS/Caremark Standard Commercial, Exchange (Marketplace), Medicare Part D and Medicaid formularies. "
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Pedestrians walk by a CVS store in San Francisco.
CVS and Gilead didn't immediately respond to requests for more details on the agreement, including whether Gilead offered a discount to the list price of its drugs. At $84,000 for 12 weeks of treatment, Sovaldi set off a storm of controversy when it was approved in December 2013. Harvoni, a combination of Sovaldi and another therapy, was approved in October; it costs $94,500 for 12 weeks of treatment, though some patients are cured in just eight weeks.
Express Scripts said it negotiated a "significant discount" with AbbVie on its Viekira Pak, approved in late December.
"Our goal was to create the lowest net-cost solution for the entire population of patients with all genotypes of hepatitis C," CVS' Cramer said in the statement. "When making this decision, we evaluated a wide variety of factors including duration of therapy, relative distribution of genotype and cost of the individual agents in the category as well as the results of a comprehensive clinical review of the different hepatitis C regimens."
Some analysts questioned Express Scripts' decision, noting AbbVie's regimen consists of several pills taken each day, while Harvoni is just one daily pill. Gilead's stock was weighed down on concerns, though, that other pharmacy benefit managers would make similar agreements based on price.
"We view this as positive because it removes near-term uncertainty for many investors who feared CVS would also strike a deal with AbbVie and further put more pressure on Gilead," RBC Capital Markets analyst Michael Yee wrote in a research note Monday.
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