Reports: ESI may start 'price war' over new hepatitis C drugs

NEW YORK — Pharmacy benefit manager Express Scripts hopes to drive down the cost of new drugs to treat hepatitis C by pitting their manufacturers against each other, according to published reports.

Bloomberg News reported that ESI would pit companies like Gilead Sciences against others such as AbbVie when the new treatments become available in 2014 or 2015. The Food and Drug Administration announced last week the approval of Gilead's new drug, Sovaldi (sofosbuvir), which is designed to cut by three quarters the time needed for treatment.

Still, the drugs also are incredibly expensive, with the full 12- to 24-week course of Sovaldi costing $84,000, a cost that ESI chief medical officer Steven Miller told Bloomberg would strain the healthcare system, saying the PBM would "make some really tough formulary decisions." This would mean dropping Sovaldi from its formulary if Gilead's competitors are willing to sell their drugs for less.

In a post Friday on his Drug Channels blog in response to the Bloomberg story, Pembroke Consulting president Adam Fein wrote that "Put another way, Express Scripts does not view more convenient dosing or administration as justification for higher pricing." Drugs from the new generation of hepatitis C treatments like Sovaldi, Johnson & Johnson's Olysio (simeprevir) and AbbVie's experimental three direct-acting-antiviral regimen may be superior to existing treatments — which often require patients to take several medications, including for the depression that's a common side effect of interferon drugs — but they're simply too expensive for payers, in other words. In a post in October, Fein noted that interchangeability with cheaper products, rapid price increases, a willingness by payers to trade off choice for cost savings and the presence of co-pay cards explained by Express Scripts excluded 48 drugs from its 2014 formulary.