Treating Hep C divides PBMs and worries plan sponsors

By Chris Hanson-Ehlinger
Fri, Jan, 09, 2015 @ 08:01 AM

describe the imageAdvancements in treating Hepatitis C over the past several months have been truly astounding.  Gone are the days when patients could only maintain this condition using multiple medications, frequently available only as an injectable product, with many uncomfortable side effects. Today, many patients can be treated with well tolerated, oral medications. The efficacy of the latest generation of products far exceeds what was available previously and the vast majority of patients can now be cured of Hepatitis C and not simply maintain the chronic disease.

Unfortunately, the cost of treating Hepatitis C with these newer agents is also astounding. For example, in late 2013, the Food & Drug Administration (FDA) approved Sovaldi (sofosbuvir) for use in combination with other medications for the treatment of Hepatitis C. The manufacturer, Gilead Sciences Inc. established a price of approximately $84,000 in the U.S. for a 12-week course of therapy. One year later in the fourth quarter of 2014, Gilead gained approval for Harvoni which combines Sovaldi with a second, oral antiviral agent – ledipasvir. The cost of Harvoni was established at just under $100,000 for 12 weeks of therapy (and some patients may require up to 24 weeks of treatment). The dilemma now facing plan sponsors is how to support these revolutionary products without being crushed by the manufacturer’s monopoly pricing tactics.

PBMs divided on Hep C treatment options

When the FDA approved Harvoni for use in the U.S., it was well known that other products for Hepatitis C were awaiting FDA review and approval. On December 19 the FDA approved Viekira Pak, AbbVie’s oral combination product. On December 22, Express Scripts announced its intent to exclude Harvoni from its formulary and granted Viekira Pak an exclusive position for treating genotype 1 Hepatitis C. Excluding Harvoni from coverage was actually a fulfillment of a commitment made by Express Scripts senior management months before. Express Scripts was a frequent and vocal critic of what they saw as Gilead’s abusive pricing for Sovaldi. Express Scripts promised that if a product became available that was clinically equivalent to a Gilead product and could be obtained at a lower cost, the Gilead product would be removed from the Express Scripts formulary. Negotiations with AbbVie on the net price for Viekira Pak provided Express Scripts the opportunity to live up to its promise and exclude Harvoni from the formulary.

CVS Health (aka CVS/Caremark) has also joined the contest. Several weeks ago, CVS Health announced that Harvoni and Sovaldi would be preferred products on its formulary and Viekira Pak would be excluded. CVS Health took the opposite approach from Express Scripts, a predictable response as it duplicates a pattern that has emerged in the selection of previous product exclusions. Insulins and diabetic testing supplies are examples where CVS Health and Express Scripts granted different manufacturers exclusive positions for their products.

Only the beginning

The formulary exclusion strategies announced by Express Scripts and CVS Health represent only the beginning of what is sure to be an active and uncertain time for plan sponsors when evaluating how best to provide their members access while at the same time controlling costs. Many open questions remain:

  • Express Scripts and CVS Health may be the largest PBM organizations in the industry but there remains a considerable portion of the market controlled by competing PBMs that have not declared their Hepatitis C product strategy. The battle is on as Gilead and AbbVie scramble for market share. The winner has yet to be determined.
  • Express Scripts and CVS Health have boasted about plan savings made possible by granting an exclusive position to either Viekira Pak or Harvoni, but neither has provided a specific savings target, discount, or net cost to their clients. Additionally, Express Scripts has introduced their Hepatitis Cure Value Program which offers their clients cost protection in the event a patient is required to complete an extended course of therapy or if a patient does not or is unable to complete a full course of treatment. As with cost estimates, the specifics of this program have not been shared with clients. Time will tell if either savings or cost protections will be delivered.
  • In addition to granting an exclusive formulary position to AbbVie, Express Scripts has also relaxed the criteria used to approve the use of Viekira Pak in genotype 1 Hepatitis C cases. There is a very real opportunity that Express Scripts clients may see per patient costs be reduced but total plan costs for treating Hepatitis C escalate significantly due to Express Scripts granting AbbVie access to a larger patient population.
  • Formulary exclusions are only possible if there are two or more products available that will deliver the same clinical results. Express Scripts and CVS Health have made their formulary choices specific to Hepatitis C products very quickly and their clinical review could only have been based on data generated and published during clinical trials. Trial results and those observed following use in the general population can differ because clinical trials are conducted under highly controlled protocols. One hopes not but, a side effect, a drug interaction, compliance issues, or some other previously unrecognized patient variable can emerge after the FDA approves a product. Should either Harvoni or Viekira Pak prove to be a more effective or acceptable product, the PBM may find that it ‘bet on the wrong horse.’

The products now available for managing and perhaps eradicating Hepatitis C are clearly superior to anything that was available even a year ago. This is a multi-billion dollar opportunity for pharmaceutical manufacturers and the competition will be significant. PBMs are eager to demonstrate their relevance and market influence by driving market share to their preferred pharmaceutical manufacturer.

The conversation on how to best manage patient access and cost is far from over. Benefit managers are encouraged to seek out an independent advisor to help navigate and, more importantly, understand the options presented to them in the months ahead.

Craig Oberg, RPh, is a managing consultant at The Burchfield Group. He works with national employers to develop PBM assessment and strategic management plans. For more information, please call 800-778-1359 or send a note to http://www.burchfieldgroup.com/contact/.

Copyright © 2015 The Burchfield Group. All rights reserved. No part of the content contained herein may be transmitted, redistributed, copied, stored, downloaded, abstracted, disseminated, circulated or included as part of any other service or product. For all permissions, please contact chanson-ehlinger@burchfieldgroup.com

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