Express Scripts strikes a deal with AbbVie to provide its hepatitis C treatment to members at a discounted rate. But will this deal end up costing more in the end?
I remember when I decided to play general contractor. We were putting an addition on our home, and I thought it would be fun to get bids on all aspects of the work myself. So that’s what I did, getting a minimum of 3 quotes for every job (materials, framing, electric, plumbing, etc). The problem, however, is that a low bidder isn’t always the best person for the job — and I learned quickly that some projects (including being a contractor) are best left to the experts.
That experience comes to mind as I reflect on what is happening in the managed care world with respect to the expensive hepatitis C treatment options that have become available this year.
Recently, Express Scripts has made the headlines over the “low bid” deal it struck with AbbVie to provide the newly approved Viekira Pak to members with hepatitis C. Shares for Gilead, the market leader offering Solvaldi and Harvoni, plummeted as they have been effectively excluded for a significant number of potential patients. Given the $84,000 price tag on Sovaldi and $95,000 for Harvoni, it is no surprise to me and others that competition would eventually have to drive down the price.
There is no debate about the fact that in several ways the AbbVie product is inferior to the treatment options available from Gilead. I agree with Dr. Jonathan Fenkel, as quoted in the The Wall Street Journal article by Peter Loftus: “It seems like a step backward in science when physicians are told they have to prescribe more drugs and manage more side effects and drug interactions to get the same result as they could with one pill per day.” But I also appreciate the challenge facing insurers who have, almost overnight, been forced to manage paying an unprecedented price to treat their hepatitis C members, a cost that has been called "astronomical and unsustainable."
What do I, as a pharmacist, make of all this?
In my opinion, Express Scripts is taking a dangerous roll of the dice. In fact, I would bet dollars to donuts that it was really hoping that Gilead would cave in and offer a deeper discount so that it could offer Sovaldi and Harvoni to more members. But it didn’t. And now Express Scripts has to follow through on a plan that could, in the end, cost more.
The reason the Express Scripts deal could ultimately cost the number 1 insurer more money is the fact that it may ultimately have to pay for the more expensive treatment anyway if patients fail to be cured on the Viekira Pak regimen. The AbbVie product involves taking 4 tablets daily in addition to a ribavirin regimen that could easily add another 4 pills per day. Harvoni, on the other hand, for the appropriate hepatitis C patient, is 1 pill per day. That’s it. If compliance with Viekira Pak proves to result in significant treatment failure (as we know often happens), Express Scripts will be facing the costs associated with treating patients again.
It’s easy to be an armchair critic though. At the end of the day, this is not my circus and these are not my monkeys. I’m not personally facing the challenge of managing a specialty market that is expected to climb to over 400 billion by 2020. But on the other hand, we are all in this game together. Cost-sharing through member premiums spreads the price tag for disease treatment around to all of us, whether or not we have hepatitis C. Therefore, we all, to some degree or another, have a vested interest in hoping that large PBMs like Express Scripts make wise choices.
I’m not trying to tell Express Scripts how to run its business. But my own experience as a contractor taught me that low-ball deals sometimes cost more in the end. For the sake of these patients and our premiums, I hope Express Scripts doesn’t have to learn that lesson the hard way.