UPDATE: Gilead (GILD), AbbVie (ABBV) Hep. C Drugs Both Given Prefered Status at Prime

UPDATE: Gilead (GILD), AbbVie (ABBV) Hep. C Drugs Both Given Prefered Status at Prime

(Updated - January 12, 2015 2:06 PM EST)

Gilead (Nasdaq: GILD) and AbbVie (NYSE: ABBV) Hep. C drugs were both given prefered status at Prime. A press release is below.

Prime Therapeutics Breaks from Competition, Strikes Deals to Prefer both Harvoni, Viekira Hepatitis C Drugs

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SOURCE Prime Therapeutics LLC

Agreements support both treatment therapies while helping members, health plans and employers manage costs

ST. PAUL, Minn., Jan. 12, 2015 /PRNewswire/ -- People with Hepatitis C who are served by pharmacy benefit manager Prime Therapeutics LLC (Prime) will now have greater support for the treatment recommended by their physician. This is a result of new agreements between Prime and pharmaceutical companies Gilead Sciences and AbbVie. Beginning immediately, the agreements place both Gilead's Harvoni® and AbbVie's Viekira Pak® on Prime's preferred drug list (formulary), meaning members can more easily get the medicine they need to feel better and live well.

"There has been a substantial reduction in the net price of both of these drugs just in the past few weeks, so sometimes it pays not to go first," said Peter Wickersham, senior vice president of Integrated Care and Specialty, Prime. "It was clear that neither Gilead nor AbbVie wanted to be left off our formulary and the result proved to be significantly better than taking an exclusive position."

Prime negotiated with manufacturers on behalf of its 23 health plans and clients which together represent more than 25 million members. The decision was made in consultation with 13 Blue Plan owners, and its Pharmacy and Therapeutics (P&T) committee, which regularly reviews new treatment options and determines how they will be incorporated into Prime's drug list.

"Prime carefully evaluated all options, including an opportunity for an exclusive agreement with each company," saidDavid Lassen, PharmD, chief clinical officer, Prime. "However, placing both Harvoni and Viekira on our formulary proved to be the lowest cost option for our clients and, importantly, prevents member disruption. We're pleased with the agreements we have signed with both companies and feel we're positioned well for the future in Hepatitis C treatment."

Both Harvoni and Viekira Pak received U.S. Food and Drug Administration's (FDA) approval in late 2014. These drugs have been highly effective in treating people with the form of Hepatitis C known as genotype 1. Approximately 70 percent of the 3.2 million people with Hepatitis C in the U.S. have this form of the virus.

"First and foremost, our goal is to help people get the medicines that are most appropriate for their condition," said Lassen. "We also want to make these medicines more affordable for our members, their health plans and employers. These agreements with both manufacturers will allow more of our members to receive appropriate Hepatitis C treatment at the lowest net ingredient cost."

These new agreements come amid growing concern about the high cost of specialty drugs in the U.S. According to Prime's research, the cost of specialty medications is expected to exceed 50 percent of all drug spending in the U.S. by 2018. By 2024, specialty drugs could make up 25 percent of the country's health care spending.

The impact of all Hepatitis C drugs in 2014 resulted in significant cost increases for members and health plans. Prime now predicts that utilization and costs will peak in the first quarter of 2015 and then decline resulting in a flat cost trend for the hepatitis C class in 2015 compared to 2014.