Payers vs. drug makers on HCV drug costs

Dueling reports released by groups representing drug makers on one side and payers on the other, highlight the benefit of new HCV treatments as well as the cost. Sovaldi sofosbuvir from Gilead Sciences Inc. (NASDAQ:GILD) and Olysio simeprevir from Johnson & Johnson (NYSE:JNJ) are estimated to increase 2015 federal spending on the individual Medicare Part D program by $2.9-$5.8 billion (6-11%), according to a report commissioned by the Pharmaceutical Care Management Association, which represents payers. The report does not account for savings from other medical costs associated with HCV or the potential impact from future price competition. Benefit consultancy Milliman Inc. prepared the report, which was published on Tuesday.

On the drug maker side, California Health Institute (CHI) also published a report on Tuesday showing that switching to new interferon-free regimens could save 30,000 more lives in the U.S. compared to current standard of care by 2030. Compared to no treatment, IFN-free regimens will save 67,000 lives by 2015. CHI, which represents more than 275 biotech and pharma companies, used an epidemiological model created by the Center for Disease Analysis.

Gilead and J&J have experienced continued pressure from lawmakers and PBMs to lower the price of their HCV drugs. In the U.S., the wholesale acquisition cost (WAC) for a 12-week course of Sovaldi is $84,000, while Olysio costs about $66,360 for a 12-week course. Sovaldi is approved in combination with ribavirin with or without peginterferon in patients with HCV genotypes 1, 2, 3 and 4 infections. Olysio is approved in combination with ribavirin and peginterferon in patients with HCV genotype 1b infection and with HCV genotype 1a infection without the Q80K polymorphism (see BioCentury, June 9).