The $4 Billion Return on a Promise Kept

Jan 27, 2015
Because of our initial action, follow-up negotiations will ultimately lower the national spend on hepatitis C drugs by more than $4 billion annually.
  • Hepatitis C

Dr. Miller

As a physician, nothing is more important to me than being able to provide the best possible treatment for every patient who needs it. And this past year I’ve been worried – and even angry – that the price of hepatitis C medication had become so high that payers were being forced to only cover treatment for their sickest patients.

That’s why I am so pleased that our recent agreement with AbbVie significantly lowers the cost to cure hep C, and finally makes it possible for plan sponsors to treat all of their patients.

As a result of our decision, we have transformed both the financial and clinical landscape for treating this disease in the U.S. Our clients will save more than $1 billion this year on hepatitis C medications, and we will financially guarantee that their patients will adhere to their therapy. Due to the industry-wide ripple effect of our decision, the U.S. healthcare system will save more than $4 billion this year. Most importantly, more patients infected with this virus will receive the medication and the specialized clinical support that they desperately need.

Because in the battle to beat hepatitis C, you can’t just provide for the sickest and call it a day.

The Promise That Brought Us Here

On April 9, 2014, I stood before 400 of our largest clients and made a promise that Express Scripts would not stand for unfair drug pricing. It was a promise to the manufacturers who develop innovative medicines, a promise to patients who need these treatments, and a promise to all the employers and taxpayers who ultimately pay the bill. It was a promise to the country.

And a promise we intended to keep.

High Prices Eroding Patient Access

Four months earlier, Gilead Sciences had introduced Sovaldi® (sofosbuvir), a breakthrough treatment to cure hepatitis C. It is a truly innovative product that could significantly improve the lives of the estimated 3.2 million Americans currently infected with the hepatitis C virus. However, the manufacturer set an unprecedented price for this medication – $1,000 per tablet – that was higher than any price we’ve ever seen for a disease as common as hepatitis C. Since Sovaldi needs to be taken in combination with other medications, the total treatment price approached $150,000 per patient. For the first time in the history of pharmaceuticals, we were seeing orphan-drug pricing for a non-orphan drug. And the total cost impact was going to be devastating for the U.S. healthcare system.

This wasn't just an issue impacting these patients and their employers. It was going to affect all taxpayers. At Sovaldi's initial price, state governments were looking at a potential expenditure of $55 billion to treat the hepatitis C patients currently on Medicaid or in the state prison system. Think of the teacher salaries and infrastructure projects that money could otherwise be funding.

The unsustainable price for Sovaldi put payers in the precarious position of having to triage their hepatitis C patients and only provide medication for those whose liver was already scarring. Affordability breeds access, and in 2014, American hepatitis C patients had neither.

After the promise I made to our clients on April 9, we engaged the country in a serious dialogue about the threats that this drug pricing mentality posed to patient access and payer solvency. We presented at dozens of industry events, consulted with countless physicians and patients, and continued our negotiations with drugmakers. Our message was crystal clear: pharmaceutical innovation should be rewarded, but pricing must be fair. Patient advocacy groups and plan sponsors – including many who aren't our clients – applauded our position and our promise.

For anyone who thought we may have been bluffing, we demonstrated in December that we most definitely were not.

A Like-Minded Partner for an Unprecedented Solution

On December 19, the FDA approved a new hepatitis C medication, Viekira PakTM (ombitasvir/paritaprevir/ritonavir; dasabuvir), which independent physicians determined to be at least clinically equivalent to Sovaldi and its $94,000 successor, Harvoni® (ledipasvir/sofosbuvir). In clinical trials, both Viekira Pak and Harvoni achieved exceptional cure rates and adherence rates.

There was one key difference, however. The manufacturer of Viekira Pak, AbbVie, shared our goal of finding a price that would be both sustainable and also open access to patients who previously weren't able to be treated. And so we negotiated a deal that would fulfill our promise to deliver fair drug pricing to our clients, and to expand access to our patients.

In exchange for making Viekira Pak the exclusive option on our formulary, AbbVie provided such a significant discount to our clients and patients that now it is financially feasible to treat all patients, not just the sickest. Further, for our patients who fill their prescriptions at our Accredo Specialty Pharmacy – where 50% fewer hep C patients fail therapy than at other specialty pharmacies – we are financially guaranteeing that patients will remain adherent, and that costs will be capped if patients require additional treatment beyond the typical 12-week regimen.

Due to the industry-wide ripple effect of our decision, the U.S. healthcare system will save more than $4 billion this year. 

It’s an unprecedented solution to an unprecedented challenge. We call it the Hepatitis Cure Value ProgramSM.

Keeping a Promise, and Saving the U.S. Healthcare System Billions

So often, when a new drug comes to market that is similarly effective and tolerated as a drug already on the market, we see “shadow pricing.” And sure enough, Viekira Pak’s list price for the industry is $83,390 – just a few hundred dollars less than Sovaldi’s list price.

However, we had already made a promise to our clients that we were not going to make them pay $84,000 for a hepatitis C cure. And we delivered on this promise. The discount we received off of the Viekira Pak list price will save our clients and patients more than $1 billion in 2015 alone.

Even more importantly, our unprecedented agreement with AbbVie transformed the pricing landscape for both hepatitis C products and for all U.S. payers. After our deal, other payers have begun to follow suit and negotiate their own arrangements with either AbbVie or Gilead. Because of our initial action, these follow-up negotiations will ultimately lower the national spend on hepatitis C drugs by more than $4 billion annually.

Without Express Scripts taking a stand – and keeping our promise – none of this would have happened. We felt the pharmaceutical industry had wronged plan sponsors and hepatitis C patients, and we were compelled to make it right.

Aligned With Those We Serve, Unafraid to Act on Their Behalf

Hepatitis C treatments represent just the tip of the iceberg. The emerging pipeline of drugs in development indicates this excessive pricing may soon be coming to even more prevalent therapy classes like high cholesterol and cancer. If and when that happens, we’re not afraid to take action and prefer more affordable, clinically equivalent therapies.

Aligned with the best interests of our clients and members, we have an unbreakable will to do whatever it takes to provide the best care and value. A best-in-class PBM fights for those it serves.

We keep our promises.

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