(Bloomberg) — AbbVie Inc. agreed to make its hepatitis C drug the exclusive treatment for most patients covered by Express Scripts Holding Co.’s main formulary, a blow against rival Gilead Sciences Inc. and a move that will escalate the debate over drug prices and insurance benefits.
Express Scripts, the biggest manager of prescriptions for U.S. insurance plans when measured by revenue, will make AbbVie’s Viekira Pak available to all patients with genotype 1, the nation’s most common form of hepatitis C. The deal includes a “significant discount” wrung from two months of negotiations, Express Scripts Chief Medical Officer Steve Miller said.
Gilead’s Sovaldi and Harvoni will be excluded starting Jan. 1 for most patients under Express Scripts’ biggest formulary, which covers about 25 million people in the U.S. Express Scripts, based in St. Louis, has waged a campaign all year against Gilead’s hepatitis C drugs, calling them part of an unsustainable trend of rising prices for specialty medicine.
“We have asked pharma companies to work with us closer and demonstrate good judgment,” Miller said. “AbbVie heard our concerns and they came to the table in a very creative way.”
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While AbbVie’s drug has proven effective in trials, it requires more pills than Gilead’s drug and sometimes must be taken with another medication with unpleasant side effects. That means the Express Scripts deal is likely to stir controversy about whether the company’s push to rein in rising drug prices is also limiting patients’ treatment options.
“Gilead has been negotiating in good faith with Express Scripts and other payers to ensure patients and health-care providers have access to our medications and can make informed treatment decisions,” Gilead said in a statement.
Stefanie Prodouz, an AbbVie spokeswoman, had no immediate comment.
Gilead’s Sovaldi costs $84,000 for a course of treatment, and the company’s Harvoni, which combined Sovaldi with another medication in a single pill, costs $94,500. Viekira Pak, approved last week by the Food and Drug Administration, sells for $83,319 before any negotiated discount.
The deal with AbbVie is for multiple years, Miller said, without providing further information. He declined to disclose the discount Express Scripts is getting for offering Viekira Pak exclusively. AbbVie Chief Executive Officer Rick Gonzalez was personally involved in the negotiations, Miller said.
The pact was the first time a specialty drugmaker agreed to a major discount off of its published price in exchange for fewer restrictions on access to the medication, he said. Gilead had been privately offering a discount of about 8 percent for its drugs to prescription benefit managers, Miller said.
In exchange for its discount, AbbVie gets a guaranteed market for its drug without limitations on the extent of liver damage patients must have before Express Scripts will approve coverage. In addition to specialists, primary-care doctors will be able to prescribe Viekira Pak under the agreement, broadening the market for AbbVie. The deal lets everyone with hepatitis C be treated, Miller said.