Close Close

Life Health > Health Insurance > Health Insurance

Gilead to Sell Cheaper Versions of Ultra-High-Cost Hepatitis Drugs

Your article was successfully shared with the contacts you provided.

Gilead Sciences Inc. will sell cheaper versions of its blockbuster hepatitis C drugs, the original versions of which sparked widespread debate about U.S. pharmaceutical costs when they were introduced at a price of more than $1,000 a pill.

The new, cheaper versions of Gilead’s Epclusa and Harvoni will cost $24,000 for a course of treatment, the Foster City, California-based company said in a statement on Monday. When Harvoni came on the market in 2014, Gilead set a list price of $94,500. Epclusa was approved for sale in 2016, with a price of $74,760.

(Related: Middlemen Play Gatekeeper in Battle to Curb Soaring Drug Costs)

Gilead, like almost all pharmaceutical companies, already offers discounts on the sticker price of its treatments, but those discounts aren’t always passed on to patients. The company said that dynamic and complicated insurance contracts were the reason it was forming a new business unit to offer versions of the drug at lower list prices.

Gilead’s hepatitis C drugs remain among the best-selling pharmaceutical products in history, and have helped boost the company’s market valuation to almost $100 billion. The drugs also made Gilead the subject of congressional hearings and accusations of pharmaceutical greed.

Breakthrough Treatments

The therapies were the first to market among a new class of hepatitis C drugs that cure patients of the illness, with fewer side effects than older therapies. Despite their effectiveness, some insurance companies and government health programs limited early access to the drugs because of the cost.

After Gilead’s drugs came to market, subsequent rival treatments from AbbVie Inc. and other companies arrived and down the price of the therapies. Express Scripts Holding Co., a pharmacy-benefit manager that negotiates drug coverage on behalf of large employers and insurers, struck a deal with one of Gilead’s rival after criticizing the company’s aggressive pricing strategies. On Monday, it praised Gilead’s move.

“We are encouraged that a drugmaker is finally taking meaningful action to bring prices down for cash-paying customers,” Express Scripts said in a statement.

Gilead’s new drugs will be sold through a new subsidiary called Asegua Therapeutics. They are what’s known as authorized generics, which are cheaper versions of brand-name drugs typically sold by the original manufacturer.

How Does the Hepatitis Fight Affect Agents?

Drug makers, employers, health insurers, and pharmacy benefits managers have used the hepatitis fight as a test case for the fight over the cost of all kinds of new, high-tech prescription drugs.

Eventually, the lessons insurers and PBMs have learned from the hepatitis fight could help bring typical drug price increases down from the stratosphere.

— Read The Hepatitis C Market Is Worse Than Wall Street Thinkson ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.