January 9, 2015 / 4:35 PM / 3 years ago

CORRECTED-UPDATE 1-Anthem selects Gilead as primary supplier of hepatitis C drugs

(Corrects Anthem ticker symbol in text)

By Deena Beasley

Jan 8 (Reuters) - Health insurer Anthem Inc on Thursday said it reached a deal under which Gilead Sciences Inc’s hepatitis C drug Harvoni will be the primary treatment for patients infected with the most common strain of the liver-destroying virus.

Anthem said the deal effectively lowers its hepatitis C treatment costs. “We were able to achieve a very competitive rate and a freeze on retail pricing for 2015,” the insurer said in an emailed statement. “That does favorably impact plan costs for 2015.”

Gilead has come under fire for the high cost of Harvoni, as well as predecessor drug Sovaldi, which was launched in late 2013 at a price of $1,000 per pill. Harvoni has a list price of $94,500 for 12 weeks of treatment, or $1,125 per daily pill.

Last month, AbbVie Inc began sales of a competing drug, Viekira Pak, at a similar list price. Express Scripts Holding Co, the largest manager of prescription drug plans for U.S. employers, subsequently chose AbbVie’s drug as the exclusive option for patients in its largest commercial plan, covering 25 million people.

Anthem said Harvoni is covered for members of its affiliated health plans who are infected with genotype 1 hepatitis C, the strain that accounts for around 75 percent of all chronic hepatitis C infections in the United States.

The insurer attributed its decision to favorable pricing and clinical differences, including the fact that Harvoni does not require additional medication, and offers a less complex treatment regimen than the AbbVie drug.

CVS Health Corp, the nation’s second-largest pharmacy benefit manager, said this week it had selected Gilead’s drugs as its exclusive option for patients on commercial plans as well as those covered under its healthcare exchange plans, Medicare and Medicaid.

Anthem declined to comment on the number of customers affected by its deal with Gilead but said it affects patients covered under its commercial/employer-based plan. Anthem said hepatitis C drugs sit on the highest coverage tiers, which means patients are required to pay for a certain percentage of the drug cost.

Deutsche Bank analyst Robyn Karnauskas said Anthem is a client of Express Scripts, covering between 8.5 million and 13.5 million patients.

“We see the Anthem deal as positive, however note that discounts are now key to play in the HCV space,” Karnauskas said in a research note. She models hepatitis C sales for Gilead using a 30 percent discount to list prices.

Shares of Gilead, which rose nearly 3 percent in regular trading, were up another 2.1 percent at $104.49 after hours.

More than three million people in the United States are believed to be infected with hepatitis C. (Reporting by Deena Beasley; Editing by James Dalgleish)

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