Gilead Sciences has scored a rights deal with CVS Health Corp. for its two hepatitis C drugs.
Gilead Sciences' Sovaldi was made commercially available in September 2013 and Harvoni in October 2014. Both the drugs are separate treatments for hepatitis C and each drug carries a steep price tag.
Christine Cramer, a spokeswoman for CVS, suggests that even though both Sovaldi and Harvoni are expensive, both the drugs are highly effective against hepatitis C and are the best available option for patients.
"Our goal was to create the lowest net-cost solution for the entire population of patients with all genotypes of Hepatitis C," says Cramer. "When making this decision, we evaluated a wide variety of factors including duration of therapy, relative distribution of genotype and cost of the individual agents in the category as well as the results of a comprehensive clinical review of the different Hepatitis C regimens."
Treatment from Sovaldi for 12 weeks costs $84,000, or $1,000 per pill. Similarly, Harvoni costs about $1,125 for each pill. However, treatment for some patients may finish within eight weeks.
The latest partnership between Gilead and CVS means that Sovaldi and Harvoni will be the only pills that will be covered under CVS' main list of drugs. Both the drugs will also be available of CVS' list for health plans via Medicare Part D, the Affordable Care Act and Medicaid.
The recent deal will also block AbbVie's hepatitis treatment called Viekira Pak that will be available only to patients who have been given approval due to medical exceptions or via a process called prior authorization. Patients who are currently using Viekira Pak will also be allowed to finish their treatment.
Gilead's latest deal with CVS Health may affect rival companies such as AbbVie that produce hepatitis C drugs. However, pharmacy benefit manager Express Scripts Holding gave preferred formulary status to Viekira Pak in December 2014, which caused rival Gilead Sciences' shares to plummet over concerns that AbbVie's drug will become a cheaper alternative Harvoni and Sovaldi.
The list price of Viekira Pak is now $83,320 for a treatment lasting for 12 weeks, which is similar in price to Gilead's Sovaldi.
Micheal Yee, an analyst with RBC Capital Markets, revealed that investors were concerned that if AbbVie strikes a deal with CVS, it will put further pressure on Gilead. However, Gilead's deal with CVS will now remove uncertainties from the market and Yee sees Gilead's share prices to increase in the near term.
