The healthcare spending landscape shifted again Monday when Express Scripts, the nation's largest pharmacy benefits manager (PBM), said it will provide only one brand of hepatitis C medication to most new patients in its employer-sponsored health plans, effectively choosing sides between competing pharmaceutical companies hoping to make big money in this area.
St. Louis-based Express Scripts said it will only provide AbbVie's Viekira Pak - after negotiating a discount on the list price - to new patients with genotype 1, the most common form of the disease. About three million Americans have hepatitis C, with estimates reaching 200 million worldwide.
The deal is a loss for California-based Gilead and New Jersey-based Johnson & Johnson, which make competing hepatitis C medication. Some patients and doctors are likely to complain about having their choices and prescribing preferences limited by Express Scripts.
PBMs such as Express Scripts and CVS Health are paid by employers and other organizations to manage the drug portion of health insurance plans. Many patients' only contact with PBMS are through mail order pharmacies. Lower prices negotiated by a PBM don't necessarily transfer to patients.
After years of no changes to medications for hepatitis C, several new treatments emerged in the last three years. The latest batch has shifted the situation from maintenance to cure for a disease that attacks the liver and can be deadly. By negating the need for expensive liver transplants, drug companies argued for high prices. Still, Gilead came under fire for listing its Sovaldi medication at $84,000 for a 12-week treatment. Then it released a second medication called Harvoni for $94,500.
Insurers - and by extension, employers - balked at the prices and restricted it to those with advanced-stage liver disease. Earlier in December, SEPTA filed suit against Gilead in federal court in Philadelphia, alleging price gouging.
But on Friday, AbbVie's hepatitis C medication, Viekira Pak, was approved by the U.S. Food and Drug Administration. Express Scripts said its committee of doctors and pharmacists found the AbbVie product functionally equivalent to the others, and after negotiating a lower price, made it the exclusive treatment for future patients.
Express Scripts said Gilead's Sovaldi and Harvoni, and J&J's Olysio will continue to be available for patients who have already started treatment and Sovaldi will be available for patients with other hepatitis C genotypes who have advanced liver disease.
But beginning Jan. 1, new patients with genotype 1, covered by plans using Express Scripts, will need to use AbbVie's product.
Express Script will deflect some criticism for taking the choice away from doctors and patients by making it available to all patients with genotype 1, not just those with advanced stages of liver disease.
"For the first time, a pharmaceutical manufacturer and a pharmacy benefit manager have created an agreement to deliver on the promise of a curative therapy for hepatitis C patients," Express Scripts said in a statement. "Pharmaceutical innovation must be rewarded based on the value it brings to patients and payers. This agreement marks a fundamental change in how sustainable access and affordability will be delivered to hepatitis C patients."