In January 2016, Merck joined the Hepatitis C treatment market with the launch of Zepatier, a new and effective Hepatitis C treatment. While the Zepatier's cure rates for genotypes 1 and 4 are very comparable with other existing treatments such as Harvoni and Viekira Pak, Zepatier has one thing going for it - a lower price point for treatment. Will the lower Zepatier cost be enough to bring down the cost of other Hepatitis C treatments?
Zepatier cost vs the cost of other Hepatitis C treatmentsIf the voices of patients, doctors and even the US Senate have no effect on how big pharma is pricing Hepatitis C treatments - because this is how capitalism works - will the introduction of Zepatier decrease these prices by presenting major competition? According to general capitalistic economics, the added competition will have a net effect on lowering the prices across the board. But this is pharmaceutical industry with its specifics - can we still count on economic laws to work here?
Let us take a look at the Hepatitis C treatment prices.
As we see from the graph, the first treatment Sovaldi's price point is $80,000, followed by Harvoni's $94,500 price point - to date, Harvoni cost of standard treatment is the highest. When AbbVie introduced Viekira Pak at $83,319 per treatment, the price of Harvoni didn't decrease - primarily because Harvoni has an advantage over Viekira Pak due to simpler regimen.
Daklinza, introduced by BMS, also didn't manage to decrease the prices of other Hepatitis C treatments. However, the introduction of Zepatier with the lowest price point for modern Hepatitis C treatment at $54,600 might at least do something to decrease the costs. As we see, Zepatier cost is more than 40% lower than that of Harvoni, while the medications can arguably considered as very similar in effect.
What has been done thus far to decrease Hepatitis C treatment costs?Gilead Sciences, producer of Sovaldi and Harvoni, and the main player in Hepatitis C treatment market has thus far take two measures to react to the overwhelming pressure from all sides as far as the treatment cost reduction is concerned.
1. Gilead offers co-pay program for Hepatitis C patients covering 25% of Harvoni cost
2. Gilead gave licences to several Indian companies to produce generic Sovaldi and Harvoni to be sold in the third world countries
A good news is that majority of Hepatitis C patients can qualify for the Harvoni co-pay program. The price is reduced but it is still more than $70,000 per treatment. Generic Sovaldi and Harvoni are sold for less than $2,000 in India but one has to travel there to get them - this is where FixHepC Buyers Club steps in and helps patients to get it in a convienent way without the need to travel to India and bargain with the doctors and sellers there.
How can Zepatier lower cost effect Hepatitis C treatment prices in the near future?After Harvoni, Viekira Pak and Daklinza, two very successful Hepatitis C treatments were launched with a notably lower price point. However, Gilead remained unyielding and did nothing about the existing price of Sovaldi and Harvoni, despite the introduction of competition. This may be because Sovaldi and Harvoni have a strategical advantage over the new competition - Viekira Pak has a complex regimen (a patient has to take multiple pills per day) and Daklinza usually involves the use of sofosbuvir (an active ingredient in both Harvoni and Sovaldi), making both of them a tad bit inferior competitors.
Zepatier is the one we have been waiting for that can change the game. Not only does Zepatier offer a high cure rate for naive patients, the clinical research has revealed that in some patients who were already being unsuccessfully treated with interferon, Zepatier might have better clinical results than both Sovaldi and Harvoni - making Zepatier a contender to be reckoned with.
On top of this, Zepatier price of treatment is $54,600 in the US. In a normal economy, when you have two very comparable goods such as Harvoni and Zepatier, with one being much cheaper than the other, people will opt to go for the cheaper version. In this case, the only way for Harvoni to still be competitive, is to reduce it price and make it more comparable with the price of Zepatier.
Nonetheless, this is the pharmaceutical industry where things are not as simple as they might seem. Harvoni, being already launched for about two years, has build up a reputation as a safe and effective Hepatitis C cure. Zepatier is a new-comes - less known but cheaper. Only time will tell how this plays out but it is a hope of most of Hepatitis C community that the lower cost of Zepatier will help decrease the cost of Sovaldi, Harvoni, Viekira Pak and Daklinza due to the increased competition.