Express Scripts executive requests Gilead lower price of Sovaldi, Harvoni

A recent interview with a Gilead Sciences executive pointing fingers for drug costs at pharmacy benefit managers spurred a formal letter from Express Scripts requesting a lower price for the company’s popular hepatitis C medications.

In an interview with Bloomberg, Gilead’s executive vice president, Jim Meyers, stated that pharmacy benefit managers would refuse to cover company products if prices were significantly lowered. “If we just lowered the cost of Sovaldi from $85,000 to $50,000, every payer would rip up our contract,” Meyers said to Bloomberg.

He referenced Zepatier (grazoprevir/elbasvir, Merck) entering the market in 2016 at a lower list price than Sovaldi (sofosbuvir, Gilead Sciences) and Harvoni (sofosbuvir/ledipasvir, Gilead Sciences), as an example of pharmacy benefit managers’ rebate-based economic incentives. “You would have predicted there would be a tremendous uptake, but their share has been capped,” he said.

Express Scripts’ senior vice president, Everett Neville, responded to Meyers’ comments directly in his letter to Gilead CEO John Milligan, writing that Express Scripts would not only welcome a lower price, but asked Gilead to offer one. “We are happy to honor all the terms of our contract and expect you to do so as well. A lower price does not affect that,” he wrote.

Neville concluded his letter with four formal requests based on the assumption that Sovaldi is worth $50,000. He requests that Gilead repay all costs above $50,000 per course of treatment that clients and federal and state governments have incurred since the drug’s launch; cut the wholesale acquisition cost of Harvoni and Sovaldi to $50,000, effective immediately; make the wholesale acquisition cost for Epclusa (sofosbuvir/velpatasvir, Gilead Sciences) $50,000; and waive all penalties for including Zepatier on Express Script’s formulary.

“You’ve led us to believe that the reason Harvoni and Sovaldi have greater market share is because they are superior products. So, does it turn out that, in your view, Zepatier and Harvoni are basically the same? That was the consensus of our independent expert panel of reviewers, and we’re pleased to read that you agree. Since that’s the case, we would also expect no penalty to us for including Zepatier on the formulary,” Neville wrote.

Healio.com/Hepatology reached out to Gilead and Express Scripts. Gilead did not respond immediately to the inquiry and Express Scripts’ spokesperson said there were no more comments at this time.Talitha Bennett

References:

Chen C, Langreth R. Gilead executive says pharmacy benefit managers keep prices high. Bloomberg. March 3, 2017. Available at: https://www.bloomberg.com/news/articles/2017-03-03/gilead-executive-says-pharmacy-benefit-managers-keep-prices-high. Accessed March 13, 2017.

Ramsey L. The healthcare industry is starting to turn on itself as pressure over drug prices heats up. Business Insider. March 7, 2017. Available at: http://www.businessinsider.com/express-scripts-responds-to-gilead-drug-pricing-comments-2017-3. Accessed March 13, 2017.

A recent interview with a Gilead Sciences executive pointing fingers for drug costs at pharmacy benefit managers spurred a formal letter from Express Scripts requesting a lower price for the company’s popular hepatitis C medications.

In an interview with Bloomberg, Gilead’s executive vice president, Jim Meyers, stated that pharmacy benefit managers would refuse to cover company products if prices were significantly lowered. “If we just lowered the cost of Sovaldi from $85,000 to $50,000, every payer would rip up our contract,” Meyers said to Bloomberg.

He referenced Zepatier (grazoprevir/elbasvir, Merck) entering the market in 2016 at a lower list price than Sovaldi (sofosbuvir, Gilead Sciences) and Harvoni (sofosbuvir/ledipasvir, Gilead Sciences), as an example of pharmacy benefit managers’ rebate-based economic incentives. “You would have predicted there would be a tremendous uptake, but their share has been capped,” he said.

Express Scripts’ senior vice president, Everett Neville, responded to Meyers’ comments directly in his letter to Gilead CEO John Milligan, writing that Express Scripts would not only welcome a lower price, but asked Gilead to offer one. “We are happy to honor all the terms of our contract and expect you to do so as well. A lower price does not affect that,” he wrote.

Neville concluded his letter with four formal requests based on the assumption that Sovaldi is worth $50,000. He requests that Gilead repay all costs above $50,000 per course of treatment that clients and federal and state governments have incurred since the drug’s launch; cut the wholesale acquisition cost of Harvoni and Sovaldi to $50,000, effective immediately; make the wholesale acquisition cost for Epclusa (sofosbuvir/velpatasvir, Gilead Sciences) $50,000; and waive all penalties for including Zepatier on Express Script’s formulary.

“You’ve led us to believe that the reason Harvoni and Sovaldi have greater market share is because they are superior products. So, does it turn out that, in your view, Zepatier and Harvoni are basically the same? That was the consensus of our independent expert panel of reviewers, and we’re pleased to read that you agree. Since that’s the case, we would also expect no penalty to us for including Zepatier on the formulary,” Neville wrote.

Healio.com/Hepatology reached out to Gilead and Express Scripts. Gilead did not respond immediately to the inquiry and Express Scripts’ spokesperson said there were no more comments at this time.Talitha Bennett

References:

Chen C, Langreth R. Gilead executive says pharmacy benefit managers keep prices high. Bloomberg. March 3, 2017. Available at: https://www.bloomberg.com/news/articles/2017-03-03/gilead-executive-says-pharmacy-benefit-managers-keep-prices-high. Accessed March 13, 2017.

Ramsey L. The healthcare industry is starting to turn on itself as pressure over drug prices heats up. Business Insider. March 7, 2017. Available at: http://www.businessinsider.com/express-scripts-responds-to-gilead-drug-pricing-comments-2017-3. Accessed March 13, 2017.