Gilead Inks Exclusive Deal with CVS Health for Hepatitis C Drugs

Gilead Sciences Inc.’s shares were up more than two percent Monday following news that the company gained exclusive coverage from CVS Health Corp.

CVS Health, the nation’s second-largest pharmacy benefit managers (PBM), said that it would make Gilead’s drugs, Harvoni and Sovaldi, the exclusive option for patients on its commercial drug list, as well as patients it manages on health care exchanges, Medicare Part D and Medicaid. CVS Health said that competing drug, AbbVie’s Viekira Pak, will only be available to patients given approval due to medical exceptions or through prior authorization.

The deal with CVS helps Gilead rebound from Express Scripts’ decision to make AbbVie’s Viekira Pak its exclusive hepatitis C drug on preferred formulary. Since Express Scripts is the nation’s largest PBM, the decision caused Gilead’s share price to drop significantly. Express Scripts said that it had negotiated a significant discount with AbbVie on its Viekira Pak, which was approved by the US Food and Drug Administration (FDA) in late December.

In December 2013, the FDA approved Gilead’s Sovaldi, a first-generation hepatitis C drug. The drug generated more than $8.5 billion in sales in the first nine months of 2014. However, the drug’s price shocked the industry, particularly payers. Gilead’s Sovaldi costs $84,000 for a 12-week treatment course.  The company then priced Harvoni, approved in October, at $94,500 for a full 12-week treatment. AbbVie’s Viekira Pak is priced at $83,319 for a 12-week treatment. Although Gilead’s drug is priced higher than AbbVie’s, it comes with the convenience of a one-pill, once-daily treatment with cure rates well above 90 percent. Viekira Pak requires patients to take three pills in the morning and another in the evening.

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