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January 13, 2015 at 08:04 AM
(Bloomberg) — Gilead Sciences Inc. and AbbVie Inc., engaged in a price war over hepatitis C drugs, are offering such substantial discounts that one benefit manager has decided to cover both medicines rather than get a lower price for one through an exclusive deal.
A “substantial reduction” in the price for Gilead’s Harvoni and AbbVie’s competing Viekira Pak made it possible to give both drugs preferred status and still save more money than through an exclusive deal, said Prime Therapeutics L.L.C. Prime covers 25 million patients in non-profit Blue Cross and Blue Shield plans for people in 23 states.
“We are receiving market-leading rates from both companies,” said Peter Wickersham, a senior vice president in charge of specialty drugs for Prime, in a telephone interview. “Neither company wanted to be left off the formulary.”
Wickersham said in his 20 years in the industry he had never seen prices for a brand-name drug category plummet so quickly after a competing drug was introduced.
The deal breaks a pattern of major benefits managers signing exclusive deals with either Gilead or AbbVie in exchange for better pricing. Express Scripts Holding Co., the biggest U.S. manager of pharmacy benefits, said it wrung a price discount from AbbVie by agreeing last month to make Viekira Pak the preferred choice for most patients for at least two years.
Soon after, CVS Health Corp. and Anthem Inc. made deals with Gilead to use Harvoni, blocking AbbVie. Anthem said last week said it got price discounts in return.
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