Gilead Hepatitis-C Drug Boost Seen on Medicare Test Plan

Gilead Hepatitis-C Drug Boost Seen on Medicare Test Plan

By Alex Wayne June 03, 2014

Medicare, the U.S. health plan for older Americans, will cover the cost of screening for hepatitis-C, a decision that may further open the government’s wallet for Gilead Sciences Inc. (GILD:US)’s $84,000 cure for the disease.

Adults at high risk for infection, including those who inject illegal drugs or had a blood transfusion before 1992, are eligible, as is anyone in Medicare age 49 to 69, the agency said in a memo today. A hepatitis-C diagnosis could lead to further use of Gilead’s Sovaldi, which costs $84,000 for a 12-week course of treatment and cures the disease.

While 2.7 million Americans may be infected with Hepatitis-C, health officials say many don’t know it since the virus can lay without symptoms for decades before scarring the liver, leading to cancer, organ failure and a transplant. Medicare didn’t previously cover screening, according to the Centers for Medicare and Medicaid Services, or CMS.

The decision to pay for testing “should increase the rate of diagnosis and at a minimum help CMS make informed treatment decisions,” said Ian Somaiya, an industry analyst at Nomura Securities International Inc. in New York, in an e-mail. “The net of all this points to higher Sovaldi sales.”

Gilead shares (GILD:US) rose 1.4 percent to $82.65 at 11:12 a.m. in New York trading, after increasing 55 percent in the 12 months before today. The Foster City, California-based company has said that the benefit of the medicine justifies the price.

Two spokeswomen for Gilead didn’t immediately respond to e-mails seeking comment on Medicare’s decision.

CDC Recommendation

The decision follows recommendations in 2012 and last year by the CDC and U.S. Preventive Services Task Force that all adults be screened for the virus, particularly those born between 1945 and 1965. Baby boomers account for about two-thirds of chronic hepatitis-C infections in the U.S., and military veterans are three times as likely to carry the virus, according to Medicare’s memo.

The testing “provides an opportunity for appropriate interventions to benefit the infected person by permitting for the early detection of, and potentially the prevention of, HCV-related liver disease,” the CMS memo said.

Prior to the development of Gilead’s Sovaldi, treatment of hepatitis-C entailed a regimen of two or more antiviral drugs with numerous side effects. Gilead’s Sovaldi won FDA approval in December.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net 

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net James Callan


Source - Bloomberg BusinessWeek