Gilead profits from hep C drugs
Gilead has had enormous success on the back of its high priced hepatitis C drugs Sovaldi and Harvoni in 2014, but now faces competition from drugs like AbbVie's Viekira Pak and is cutting its prices to maintain market share.
Gilead reported yesterday that sales in 2014 more than doubled, hitting $24.5 billion – an increase of 127 per cent year-on-year, with its antivirals accounting for $22.8 billion of the total. However, the company has warned that it is having to make substantial price cuts this year to secure deals with insurers in the US.
Launched in 2014, rival Viekira Pak is as effective as Gilead's once-a-day treatments, but is less convenient, requiring patients to take between three and six pills a day. However, AbbVie put pressure on Gilead when it signed an exclusive deal with US insurer Express Scripts last December.
Gilead retaliated in January by cutting its own deals with Express Scripts' chief competitor CVS/Caremark and the largest US health insurer, UnitedHealth.
As a result of the price battle, another insurer, Prime Therapeutics, decided the prices of both companies' drugs were low enough that it would stock both Harvoni and Viekira Pak.
Gilead maintains that the lower prices will be offset by higher volume sales, but with Merck set to introduce its own once-daily hepatitis C pill later this year and generics waiting in the wings, the heady $84,000 opening price for a 12-week course of Sovaldi looks set to plummet further.
Though the company did better than analysts expected in Q4, it has put its net product sales forecast at $26-$27 billion for 2015 – down on the $28 billion the market had projected.
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