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Physician Views: The Hepatitis C Pricing War - What Impact On Prescribers?

Physician Views: The Hepatitis C Pricing War - What Impact On Prescribers?

Introduction

Scope

In a surprise move, AbbVie agreed last month to provide its newly approved hepatitis C drug Viekira Pak to Express Scripts at an undisclosed discount in exchange for exclusive access to the pharmacy benefit manager's (PBM) national formulary, touching off a battle for market share with entrenched market leader Gilead Sciences, which has fought back aggressively and secured exclusive access for Harvoni in a slew of recent deals.

Express Scripts has boasted that the price war will end up saving payors and employers a total of $4 billion this year, including $1 billion in savings for its US customers alone, which is based on the PBM's estimate that 170 000 patients will be treated for HCV in the country this year. Deutsche Bank analyst Robyn Karnauskas believes this may be a conservative estimate, and suggests the number treated in the US is likely to pass 200 000 in 2015, which would result in both more spending and additional savings.

On the flipside, Gilead and fast-following HCV drugmakers like Merck & Co. (among others) will be none too pleased with the apparent success of Express Scripts' cost-management strategy, as price competition will take a bite out of their profits while also feeding into more general concerns about the unsustainability of drug pricing that had, until recently anyway, been bubbling away largely beneath the surface.

An important aspect of the evolving HCV marketplace that is not being discussed, however, is how the various agreements (and resulting formulary exclusions) are viewed by the doctors, who will play a critical role as all-important prescribers of the medicines. Physician surveys and recently updated guidelines published by professional organisations have consistently suggested that doctors favour use of Harvoni based on its perceived benefits on convenience and tolerability relative to Viekira Pak, while analysts like Leerink's David Larsen suggest Gilead may be headed for a higher share of the market than the 70/30 split that the Street is currently expecting.

But now that both drugs are actually available, and with various plan managers stumping for Harvoni (eg, CVS, Aetna, Anthem, Humana and Harvard Pilgrim) or Viekira Pak (Express Scripts) – or both, as was the case for Prime Therapeutics – it is up to doctors to make the ultimate decision about prescribing which drug to which patient. Thus, important issues will be how closely they decide to stick to the preferred formulary guidelines, as well as how many hoops they would be willing to jump through in order to achieve reimbursement for the other drug (ostensibly Harvoni, given its perceived advantages).

Indeed, Evercore ISI analyst Mark Schoenebaum estimates that up to 20 percent of HCV patients might be ineligible for Viekira Pak due to things like drug-drug interactions, an inability to take ribavirin (which is co-administered with AbbVie's regimen) or HIV co-infection. This could be a boon for Gilead, as patients covered by plans that have chosen AbbVie as an exclusive partner – such as those using Express Scripts' national formulary – will be treated with Harvoni at full price.

Reasons to Purchase

To gain further insight into physicians' opinions of the formulary exclusions and how the deals might affect how they treat patients with HCV, FirstWord is polling gastroenterologists, hepatologists and infectious disease specialists in the US and asking them...

  • Regarding well-publicised agreements recently made between drug manufacturers and formulary managers (payors and PBMs) that provide exclusive formulary access to either Harvoni or Viekira Pak, which statement best reflects your view?
  • How familiar are you with what insurance provider (i.e. formulary manager) a patient has and which HCV drug – Harvoni, Viekira Pak or both – is covered when you prescribe them an HCV drug?
  • Have formulary exclusions, which have been going into effect over the past month since the approval of AbbVie's Viekira Pak, changed your prescribing habits?
  • In an instance where a patient's insurance restricts coverage to EITHER Harvoni or Viekira Pak, there is still an opportunity for the other drug to be covered in the case of drug-drug interactions and/or contraindications, though it may involve additional legwork. How willing are you to jump through some extra hoops?
  • Harvoni and Viekira Pak achieved similar cure (SVR) rates in clinical trials. However, do you believe the convenience advantages of Harvoni will result in superior REAL WORLD cure rates compared to Viekira Pak?


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