11 August 2015 - While the high cost of new drugs is worrisome, those responsible for drug benefit plans in the U.S. are especially concerned. When a cure for a hepatitis C drug, Sovaldi, was launched by Gilead at a cost of $84,000 for a 12-week cost of therapy, payers were outraged. Typical was last year’s comment by Ms. Karen Ignagni, the President of America’s Health Insurance Plans, the insurance industry’s trade association:

The company in this case is asking for a blank check which, if granted, will blow up employer benefit costs….and wreak havoc on the federal debt.

However, these concerns abated when a competitor to Sovaldi, AbbVie’s Viekira Pak, was approved and launched in the U.S. While AbbVie ABBV +0.00% priced Viekira Pak at $83,319 per cost of therapy, insurance giants like Express Scripts ESRX +0.00% and CVS Health Corp. now were in a position to negotiate pricing, resulting in steep discounts for exclusive listing of these drugs on their list of covered medicines. Neither Express Scripts, which crafted a deal with AbbVie, nor CVS, which dealt with Gilead, have made public the price negotiated with their respective partners as to the cost they are paying for these hepatitis C treatments, but it is believed that they are in the $60,000 per patient range, far lower than the original list price and in line with the price of $55,000 set in places like England and Germany.

For more details, go to: http://www.forbes.com/sites/johnlamattina/2015/08/11/once-disparaged-me-too-drugs-crucial-for-lower-costs-of-cholesterol-hepatitis-c-and-cancer-drugs/