Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Gilead's Harvoni Ads Ramp Up the "Cure" Message

Gilead's Harvoni Ads Ramp Up the "Cure" Message | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Gilead is adjusting its message in new advertising for hepatitis C drug Harvoni, replacing its two-year-old introductory ad with a spot highlighting patients' relief after treatment. Three key words: "I am cured."

 

“Let Go” replaces “I Am Ready” as the new theme in the marketing effort, which is meant to reach patients who've been diagnosed with hep C, but haven't undergone treatment, a spokeswoman for Gilead said. In a just over one week on the air, the TV ad has tallied more than $6.4 million in national media spending, with the bulk of airings occurring in primetime, according to data from real time TV ad tracker iSpot.tv.

 

In the ad, dozens of people walk through a desert carrying Chinese lanterns, which they light and release skyward as the day turns into night. The voiceover assures viewers: "I no longer live with the uncertainties of hep C, wondering what if? I let go of all those feelings because I am cured, with Harvoni."

 

Further Reading:

  • “Gilead’s New Hep C TV Campaign Urges Baby Boomers to Get Off Their Butts & Get Tested”; http://sco.lt/9KSHIn
  • “Scoop.it!
  • “Will Gilead’s Hep C Sales Implode or Just Hit Equilibrium?"; http://sco.lt/69RQUz
  • “NIH-led Study to Assess Long-Term Outcome of Harvoni for Treatment of Hep-C”; http://sco.lt/5FuPeT
Pharma Guy's insight:

This is another arm of the DTC ad campaign to tramp up flagging sales and possibly anticipating that long-term outcome NIH studies may prove that "cure" is an overstatement.

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Gilead's Investors Shed Croc Tears Despite a 69% Profit Margin for Q1 2016

Gilead's Investors Shed Croc Tears Despite a 69% Profit Margin for Q1 2016 | Pharmaguy's Insights Into Drug Industry News | Scoop.it

The drugmaker Gilead Sciences has seen its fortunes buoyed by its blockbuster hepatitis C drugs in the last two years. But that cash flow is slowing down — and it’s hitting the company’s bottom line.

 

Combined sales for the powerful drugs, sold as Sovaldi and Harvoni, were $4.3 billion in the first quarter of this year, missing the average analysts’ estimate by nearly $300 million and falling $600 million below the previous quarter, Gilead reported on Thursday. That helped drive a lower-than-expected profit margin for the company.

 

The company has said it expects its US sales of its hepatitis C drugs to flatten this year.

 

The high prices of Sovaldi and Harvoni have made the drugs flash points in the public and political uproar over drug prices. The medications are priced at $84,000 and $94,500, respectively, for a full course of treatment, though patients and their insurers generally pay far less thanks to negotiated discounts.

 

With revenue from the hepatitis C drugs slowing, some investors are clamoring for Gilead to strike new deals. Earlier this month the company said it would pay $400 million for a drug from Nimbus Therapeutics to treat fatty liver disease. CEO John Milligan said it’s open to doing more.

 

“We are actively assessing options,” he said, “and we will make moves when the right opportunities present themselves.”

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Harvoni: Huge Price Tag, Huge DTC Ad Spend, Flat Sales 

Harvoni: Huge Price Tag, Huge DTC Ad Spend, Flat Sales  | Pharmaguy's Insights Into Drug Industry News | Scoop.it

A $100 million ad blitz has whipped up patient demand for Harvoni, the $1,100-a-pill hepatitis C treatment, even as the drug’s price has drawn a barrage of lawsuits, state investigations, and sharp condemnation from members of Congress.

 

Like most drug advertisers, Gilead last year devoted the majority of its TV ad dollars for Harvoni to the big broadcast networks ABC, NBC, CBS, and FOX — which draw increasingly aging viewers, including baby boomers between the ages of about 50 to 70, who are five times more likely than other adults to have hepatitis C.

Harvoni ads also target more niche audiences. Consider the $600,000 worth of Harvoni ads last year in the magazine of the American Association of Retired Persons. Or the $3 million Gilead spent advertising on Black Entertainment Television and in Ebony magazine — which makes sense given that African-American baby boomers are twice as likely as others in that age group to have hepatitis C.

Men are also disproportionately likely to have hep C, which may explain Gilead’s investment last year in a collective $13 million worth of ads on ESPN and the Golf Channel and in Sports Illustrated and Men’s Journal.

Gilead is wooing patients directly at a time when both private insurers and Medicaid programs are balking at the high price of Harvoni. In some cases, they’re only agreeing to pay for treatment for the sickest patients, leaving those with relatively healthy livers unable to get treated. Other insurers will only pay for a competitor’s lower-priced drug.

Doctors, too, have proved a barrier; some are encouraging patients to hold out for cheaper therapies.

“A lot of physicians are taking a wait-and-see attitude,” said John Mack, who publishes Pharma Marketing News. As a result, he said, Gilead is going directly to patients, trying to “push them” into talking with their doctors and requesting the medication by name.

Dieterich, of Mount Sinai Hospital, said that physicians sometimes have to “do a little fast-talking” to reassure patients that other medications can work just as well as the brand-name drug they’ve seen so often on TV. Competing hepatitis C drugs Viekira Pak and Zepatier aren’t being advertised, so Gilead has the field to itself.

“We’re battling their successful direct-to-consumer advertising,” Dieterich said.

Gilead has said it’s expecting sales from Sovaldi and Harvoni to flatten this year, but the ads may well continue.

Pharma Guy's insight:

Gilead's "Ready" DTC advertising theme is meant to encourage "diagnosed patients who are ready to seek treatment and ready to be cured" to talk to their doctors, David Johnson, Gilead VP, U.S. sales and marketing for liver diseases, said.

  

The ads feature "cure" in large font-size text and audio several times, but points out in small type (not audio), "Cure means no virus detected in blood 3 months after treatment ends."

 

I wonder, however, are there any data about detection AFTER 3 months? Note that the NIH is leading a Study to Assess Long-Term (10 years) Outcome of Harvoni for Treatment of Hep-C; http://sco.lt/5FuPeT Unfortunately, by the time that study is complete, the Harvoni sales cycle will have ended.

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Many Hep C Patients Who Really Need Sovaldi Are Not Getting It

Many Hep C Patients Who Really Need Sovaldi Are Not Getting It | Pharmaguy's Insights Into Drug Industry News | Scoop.it

While Congress and payors have been quick to sermonize Gilead on the price of Sovaldi, the Foster City, CA, drugmaker's earnings report suggests those lectures have fallen on deaf ears, and have done little to keep the drug off formularies or slow down its sales.


For the second quarter of 2014, Gilead's total product sales in the US were slightly over $4.8 billion—Sovaldi total sales reached $3.4 billion with $3 billion in the US alone—meaning nearly three-quarters of the drugmaker's domestic revenue comes from that one, thousand-dollar pill. Gilead estimates that 9,000 Sovaldi patients have been cured of hepatitis C—a total they believe will grow rapidly as the drug gains traction.


Physician penetration, too, proved strong. Seventy percent of targeted doctors have written a script for Sovaldi, according to the drugmaker. As a comparison, Biogen's blockbuster MS pill Tecfidera saw 62% penetration after launch.


Despite AHIP (American Health Insurance Plans) calling for the drugmaker to lower the price, and Kaiser Permanente calling the price “outrageous,” only three states are currently not covering Sovaldi, and of those remaining 47 states half require prior authorization and half require a certain level of fibrosis (i.e. liver damage).


However, of the patients treated so far, 60% had “low fibrosis scores,” Schoenebaum wrote, which could signal that the hard-to-treat patient is still a pressing unmet need.


Also of note was how, and to whom, the drug has been prescribed. Sixty percent of patients treated had genotype 1 (the most common subset of the disease), and 70% of usage was for interferon-free regimens, including combination with J&J's Olysio.

Pharma Guy's insight:


Aside from who gets Sovaldi and who doesn't, Gilead is claiming that 9,000 patients have been "cured," which means "a fully suppressed viral load." Remember the baby who was supposedly "cured" of HIV because no viruses could be detected? What if the same thing happens for Hep C patients who are "cured" by Sovaldi? Will they have to undergo another $84,000 round of treatment with the drug? I don't think the clinical trail was designed to detect that scenario. Only use in the real world will answer my question.

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Will Patent Cases Prevent Sovaldi from Yielding an Expected 20-to-1 ROI?

The intense rivalry to grab a dominating share of the lucrative market for hepatitis C treatments has largely focused on potential pricing and clinical research showing which medicines can cure the largest number of patients in the shortest amount of time. But there is another intriguing aspect to this classic pharmaceutical horse race – a series of lawsuits filed over patents.


Specifically, Gilead Sciences, which was first out of the gate with the expensive and successful Sovaldi treatment, is fighting no fewer than three other drug makers in court – Merck, AbbVie and Roche – over valuable patent rights.


As The Wall Street Journal notes in an interesting overview of this multi-faceted battle, patent skirmishes in the pharmaceutical industry usually involved brand-name drug makers trying to block generic rivals from selling cheap copies of their medicines.


But the litigation over the hepatitis C patents is unusual because this pits brand-name drug maker against brand-name drug maker in disputes that, the paper writes, are more typical of smart phone manufacturers and other tech companies.


The litigation “speaks to the blockbuster aspect of this drug [Sovaldi], both from a scientitic standpoint and obviously from a monetary standpoint, that we’re seeing very involved litigation from many different players,” says Theresa Kavanaugh, a patent lawyer at Goodwin Procter, who has represented drug makers, but is not involved in the hepatitis C litigation.

Pharma Guy's insight:


Gilead has racked up $5 billion in Sovaldi sales in the first half of 2014.  According to a JAMA viewpoint article, it may have cost Gilead $11 billion to "develop" Sovaldi - this is based on the price Gilead paid to acquire Pharmasset, which discovered and initially tested Sovaldi. If all of the approximately 3 million HCV carriers in the United States were treated with Sovaldi at current prices, Gilead would net more than $250 billion dollars, or better than a 20-to-1 return on its investment, suggesting that pricing is inappropriately high.


But at the current rate of sales, Gilead will recoup its initial $11 billion investment  by the end of the year and Sovaldi will be profitable in 2015 -- that is, unless Gilead loses its patent battles in court. But even if that were to happen, it's not likely to affect 2015 sales.

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What Impact Will Hepatitis C Drugs Have on Medical Costs?

What Impact Will Hepatitis C Drugs Have on Medical Costs? | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Just what impact will hepatitis C treatments have on medical spending over the next few years? A new estimate suggests that, for private insurers, the impact of new hepatitis C treatments – including Sovaldi and any forthcoming medications – on medical costs will eventually decline, as will the impact on the growth in spending on overall health care.
Pharma Guy's insight:


Good to know that burden on insurers will "eventually decline," but one issue remains: even with private insurance, many privately-insured Hep C patients won't be able to afford the co-pay for Sovaldi (& many simply do not have insurance). I'd be surprised if more than 10% of the 3.2 million Hep C patients in the U.S. will receive this drug -- something I do not think this analysis takes into account. For more on that, read: 

Sovaldi - A Cure for the One to Ten Percenters
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Report questions safety of the newest hepatitis C drugs

Report questions safety of the newest hepatitis C drugs | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Over the past few years, billions of dollars have been spent on new hepatitis C medicines because they could eliminate the virus in 90 percent or more of patients. But a new report (http://www.ismp.org/QuarterWatch/pdfs/2016Q2.pdf) finds that hundreds of cases of liver failure were associated with the drugs, and the authors suggest that regulators may have been too quick to embrace the treatments as a panacea.

 

Specifically, 524 cases of liver failure were found, along with another 1,058 reports of severe liver injury, according to side effects reports that were filed with the US Food and Drug Administration and reviewed by the Institute for Safe Medicine Practices. The nonprofit group also noted 761 instances in which the reported side effect was a failure of the medicines to combat the virus. The report arrives just three months after the FDA issued a warning that the drugs could reactivate hepatitis B.

 

…The study authors maintain their findings should be seen as a warning about the “negative consequences” of the drugs. The medicines “should be ranked as a major medical advance, [but] the large number of cases of liver failure and death, as well as antiviral failure, show the need for further investigation of the serious adverse effects of this expensive new class of drugs.”

 

Indeed, the latest generation of hepatitis C treatments has been revolutionary, offering a desirable combination of high cure rates and manageable side effects. They include the Sovaldi and Harvoni treatments sold by Gilead Sciences. But the drugs come at a cost, literally. List prices range from $54,600 to $94,500, depending upon dosing and regimens, although these do not reflect rebates or discounts.

 

Spending per patient has ranged from $55,000 to $125,000 per patient, according to the ISMP report, citing data from QuintilesIMS, and about 250,000 patients were treated in 2015. The study authors noted that list-price spending for the drugs exceeded similar spending for antibiotics, and cholesterol and blood pressure drugs, each with patient populations measured in tens of millions.

 

“These new data raise more questions than they resolve about the adverse effects of direct-acting antiviral drugs…. The FDA and pharmaceutical companies were also overoptimistic in labeling as a ‘cure’ the results of a laboratory assay at 12 weeks indicating undetectable levels” of the virus.

 

“This is an example of the price we pay for faster drug approval with reduced clinical testing,” said Thomas Moore, a senior scientist at ISMP and one of the study authors. “Don’t we really want to know more than this about a new drug treatment on which we spent more than $10 billion to $20 billion in 2015 alone? We spent more than twice as much on these direct-acting antivirals for about 250,000 patients as the NIH did on all research into all infectious diseases in one year.”

 

Not everyone is convinced, however, that the report should alter medical practice.

 

More here…

 

Further Reading:

  • “What's Gilead & FDA Hiding? Advocacy Groups Sue to Access Hepatitis C Trial Data”; http://sco.lt/8R5T7J
Pharma Guy's insight:

I'm on record for wondering if, in the long run, the claims of enduring cure of Hepatitis C may be over optimistic. Now, in addition, there are serious side effects associated with these drugs.

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Drug Spending Growth Surges Again in 2015

Drug Spending Growth Surges Again in 2015 | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Total spending on medicines in the U.S. reached $310 billion in 2015 on an estimated net price basis, up 8.5 percent from the previous year, according to a new report issued today by the IMS Institute for Healthcare Informatics.

Invoice spending is based on IMS Health reported values from wholesaler transactions measured at trade/invoice prices and exclude off-invoice discounts and rebates that reduce net revenue received by manufacturers. Net spending reflects company recognized revenue after off-invoice discounts, rebates and price concessions are applied.


According to IMS, the increase was driven primarily by a wave of "innovative" new medicines. Take a closer look at the data here.

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ThePlanetaryArchives - BlackHorseMedia - San Francisco's curator insight, April 16, 2016 10:53 AM
"Innovative" drugs? There are no drugs that actually cure any disease, and America is sicker and fatter than ever. One day these people will be revealed for the snake-oil salesmen that they are. Except snake-oil actually works.....
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AbbVie aims to truck ahead with hep C testing promo campaign

AbbVie aims to truck ahead with hep C testing promo campaign | Pharmaguy's Insights Into Drug Industry News | Scoop.it

AbbVie's  waiting for FDA approval on a hepatitis C combo therapy. OraSure makes a rapid test to detect the virus. And professional truck drivers in the U.S. are more than 5 times as likely as other Americans to have it.


Put it all together, and you've got the makings for a brand-new marketing campaign, "Truckers Rolling Against Hepatitis C." Together, AbbVie and OraSure--parties to a copromotion agreement focused on testing individuals with the latter's OraQuick HCV Test--have teamed with the Healthy Trucking Association of America to educate drivers about HCV and encourage them to get tested.


The campaign will kick off at--where else?--The Great American Trucking Show, coming up later this week in Dallas. From there, the companies will keep it going with local HCV testing events across the country.

Pharma Guy's insight:


#1: I did not know truckers were 5X as likely to have Hep C. Keep on Truckin' indeed!


#2: Just because there will be competition to Sovaldi doesn't mean that prices for these treatments will drop:


From: Don't worry about a hep C pricing war, analysts tell Gilead-watchers


No price war on hepatitis C drugs? That would be a disappointment to payers worried about the cost of treating millions of patients with super-expensive, yet highly effective drugs. But to investors, that reassurance sounds really good.


As Barron's points out today, Bernstein analysts issued a report to assuage fears of an all-out pricing competition when Gilead Sciences' Sovaldi is joined on the market by new treatments from AbbVie, Bristol-Myers, and Merck.


"One of the near-term bear arguments is the expected approval of a competitive all-oral HCV regimen from AbbVie, and the potential for aggressive pricing tactics by AbbVie," Bernstein's Geoffrey Porges and Wen Shi wrote in a note to investors.


Obviously, major undercutting of Sovaldi's notorious $84,000-per-treatment-course price could either force Gilead to slash the cost of its own meds, or relinquish market share to AbbVie. And as the analysts point out, payers are encouraging AbbVie and its fellows to do just that.


"However, we believe the risk of a price war hurting Gilead's HCV revenue in the next 1-2 years is overblown," they wrote.


For three reasons, basically. Even if AbbVie's regimen is cheaper, payers have "limited tools" to use to restrict access to Gilead's therapy, which will probably include a new combo pill by year's end. AbbVie has said--and recently--that it's not interested in a price war. That sort of competition isn't necessarily a good move in the hep C market, where awareness is growing and diagnosis is expected to increase, which means the entire pie is bigger for everyone.


And besides, if Gilead were to face lower-priced rivals, the company "has counter strategies to mitigate the impact of any potential price war by AbbVie on a payer-by-payer basis," the analysts write. Behind-closed-doors negotiations, maybe?

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Defending Big Pharma [i.e., Gilead] is a Full-Time Job for PhRMA

Defending Big Pharma [i.e., Gilead] is a Full-Time Job for PhRMA | Pharmaguy's Insights Into Drug Industry News | Scoop.it

For Lori Reilly, vice president for policy and research at the Pharmaceutical Research and Manufacturers of America (PhRMA), 

her job is to develop federal legislative, regulatory and political strategies. She not only fights criticism of the pharmaceutical industry on multiple fronts, but also promotes healthcare reforms that reflect the industry’s interests.


One current fight involves Gilead’s $1,000-a-pill Hepatitis C drug Sovaldi, which lawmakers, insurance companies and pharmacy benefit management companies say could bankrupt families and the healthcare system.


Even though Gilead isn’t a PhRMA client, the lobby group has come to its defense, saying Sovaldi might sound pricey but in the long run it actually saves money.


While Sovaldi may cost $84,000 or more for an individual patient’s 12-week treatment, Reilly argues it will save money by decreasing the need for liver transplants for patients whose organs fail.

Pharma Guy's insight:


"Reilly argues it will save money by decreasing the need for liver transplants for patients whose organs fail."


Let's do the math on Sovaldi, using some numbers from the C. Everett Koop Institute, which may or may not receive funding from Gilead and/or PhRMA:


According to the Institute's data (see Hepatitis C: The Facts) the "average lifetime cost for hepatitis C, in the absence of liver transplant, has been estimated to be about $100,000 for individual patients. Assuming that 80% of the 4.5 million Americans believed to be infected develop chronic liver disease, the total lifetime cost for this group (3.6 million) will be a staggering $360 billion in today's dollars. Assuming an estimated survival of 40 years, the annual health care costs for the affected U.S. population with chronic hepatitis C may be as high as $9 billion."


Saving $360 billion sounds like good news, right? But does the math add up to a savings for payers; e.g., Medicaid, Insurers, States, and patients?

To save that $360 billion, ALL 4.5 million people with Hep C must be treated because doctors can't determine who among the 4.5 million patients will develop chronic liver disease and who won't. At $84,000 "or more" per treatment, the total cost is at least $378 billion! So it's a wash, more or less. Or is it?

On the one hand, Gilead offers discounts to big payers like Medicaid, so the total cost is likely to be much less than $378 billion to treat ALL Hep C patients.

On the other hand, at such a high cost per treatment, it's not likely that ALL Hep C patients will be able to afford treatment and will opt not to take Sovaldi -- especially those patients that do not have and may never have chronic liver disease. Also, we know that even for treatment of life-threatening diseases, patients often (maybe up to 50% of the time) do not comply with the treatment regimen. This may be even more so for drugs like Sovaldi, which are likely to have serious side effects.

So, as far as saving payers money, the Sovaldi math says "maybe." For payers, "maybe" just isn't good enough from a financial, return-on-investment (ROI) standpoint.

Reilly also argues that drugmakers also need a good ROI: "if drugmakers aren’t able to recoup their research and development dollars for diseases like cancer and Alzheimer’s, new drugs won’t come to the market."

Gilead has racked up $5 billion in Sovaldi sales in the first half of 2014. According to a JAMA viewpoint article, it may have cost Gilead $11 billion to "develop" Sovaldi - this is based on the price Gilead paid to acquire Pharmasset, which discovered and initially tested Sovaldi. If all of the approximately 3.6 million Hep C patients with chronic liver disease in the United States were treated with Sovaldi at current prices, Gilead would net more than $300 billion dollars, or better than a 27-to-1 return on its investment, "suggesting that pricing is inappropriately high." 

At the current rate of sales, Gilead will recoup its initial $11 billion investment by the end of the year and Sovaldi will be profitable in 2015. That's about the time that competition may enter the marketplace. So, Gilead decided price not on what the market will bear, but on how quickly it can recoup its investment before it loses market share and is forced to reduce prices.

Why is PhRMA defending Gilead, which isn't even a member organization?

Here's what Reilly says about that: 

"Reilly pushes back against congressional leaders who are challenging the rising cost of specialty drugs and want the Department of Health and Human Services (HHS) to negotiate down the price of treatments like Sovaldi in Medicare Part D plans. 

"Reilly warns the fight isn’t just about one Hepatitis C drug but future drugs that could save the healthcare system billions of dollars by reducing costs such as chronic care and hospital bills. 

"Reilly also says if drugmakers aren’t able to recoup their research and development dollars for diseases like cancer and Alzheimer’s, new drugs won’t come to the market."

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Oregon Medicaid Hopes to Pit One Pharma Company Against Another For a "Sweet" Deal on Hepatitis C Drugs

Oregon Medicaid Hopes to Pit One Pharma Company Against Another For a "Sweet" Deal on Hepatitis C Drugs | Pharmaguy's Insights Into Drug Industry News | Scoop.it
The head of pharmaceutical drug purchasing for Oregon’s Medicaid program has a message to hepatitis C drug makers: Let’s make a deal. Oregon is seeking to severely restrict use of Sovaldi – the $84,000 hepatitis C pill sold by Gilead Sciences - among Medicaid beneficiaries and expects competing treatments to come on the U.S. market in the next year. And when one or more of those new treatments does become available, Oregon will start bargaining for a deep discount.
Pharma Guy's insight:


Oregon already receives a 23.1% discount on Sovaldi by way of a rebate from Gilead, which is mandated by federal law.


So, kind of deal is Oregon hoping for?  To bring the negotiated price down to $40,000 or $50,000. Sweet or Not Sweet?

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