Gilead at EASL 2015 - (Updated 05/12/15)
Pharm Exec's 2015 Brand of the Year: Sovaldi and Harvoni for Hepatitis C
Whether you classify West’s case as a clinical outcome or just an arresting anecdote, the facts on Harvoni and its companion, first-to-launch predecessor, Sovaldi, don’t strike the flat encore notes often associated with a breakthrough drug. For the 170,000 HCV patients prescribed the two drugs since the initial US launch of Sovaldi in December 2013, Gilead’s one-two punch hits home. A trial-certified efficacy rate of well over 90% made Sovaldi the first well-tolerated cure for a disease most patients didn’t even know they had until it damaged the liver, one of the body’s most essential, complex—and costly to replace—organs. With its shortened duration to cure, and an even higher efficacy rate, Harvoni does it even better.
Gilead’s executive VP for clinical research, Dr. John McHutchison, summarized it this way in a recent interview with Pharm Exec. “When Sovaldi was approved, it was the first all-oral regimen for genotypes 2 and 3 of the virus, which covers more than a third of the infected population here in the US. In patients with genotype 1, it allowed for a much shorter treatment time in combination with interferon, which cut the severe side-effects associated with previous use of that older medicine. Response rates to Sovaldi were all higher than had ever been seen before, in excess of 90%, while therapy discontinuation fell to under 2%—an astounding number, given that the basic characteristic of prior drug treatments was to leave both patient and clinician discouraged by the reality that those side-effects could actually make you feel worse than the disease itself.”
Bending the curve
The 31 members of Pharm Exec’s Editorial Advisory Board (EAB) seem to agree, tapping Sovaldi and Harvoni together as our 9th Brand of the Year, in a unanimous vote. That itself is a precedent for this normally contentious group. Our EAB cited Gilead Science’s unwavering commitment to a strong franchise in anti-viral therapies through clinically useful drug combinations whose tolerability appeals to patients. Perhaps more important is the psychological boost provided by the $10.3 billion in US sales posted by Sovaldi in 2014, a first-year launch record unmatched by any previous brand name drug. Combined with some $2 billion in post-FDA approval revenues from Harvoni, this HCV breakthrough duo fell just short of matching the $12.5 billion in 2014 sales of the top-selling US branded drug, Humira, first marketed back in 2003.
It’s also rare to see any branded medicine with such a transformative effect on a company’s fortunes and mission. With Sovaldi leading the way, Gilead’s full-year revenues for 2014 leapt to $24.9 billion, up 127% from the $11.3 billion it posted in 2013. This year, the company will enter the top 10 of our annual Pharma 50 revenues ranking, nosing out century-old R&D icon Eli Lilly & Co. as well as AbbVie and AstraZeneca. Just five years ago, Gilead sat at No. 23 on the list.
And while Gilead remains tightly focused on the anti-viral business, HCV has—at least for the moment—eclipsed the company’s traditional weight in the HIV space. In 2013, prior to Sovaldi, 76% of Gilead’s net revenue growth was attributable to HIV, where the company markets the top three US selling drugs for AIDS; hepatitis (specifically, the B strain) was a distant also ran, at 10%. Today, the situation is on its way to being reversed, with HCV accounting for 48% of total revenue in 2014, compared to 44% for HIV.
The company sees this as a simple confirmation of its business model. From a purely clinical perspective, the two segments are almost complementary. Research insights and marketing precedents from Gilead’s two decades of trench warfare against HIV—Gilead launched its first antiretroviral, Viread, back in 2001 (a joint indication for HBV was added in 2008)—has helped it secure leadership in the far bigger market for HCV. With 160 million people infected worldwide, the numbers on HCV incidence are more than four times higher than for HIV. “We believe there is substantial room for growth at both ends of an anti-viral business with major unmet medical need,” Gilead President and COO John Milligan told analysts at January’s JP Morgan investor conference.
Fast and furious
More importantly, the Sovaldi story dispels the prevalent view that medical progress always occurs at a glacial pace, measured in multiples of decades rather than years. Instead, the race for a cure for HCV proceeded in a series of predictable relays, borne by the momentum of great science. Once the properties of the virus were identified in 1989 by a team led by the San Francisco-based vaccine company Chiron, researchers focused on creating reliable high-throughput screening systems for use in both the lab setting and for viral detection in the population. That goal was accomplished only a few years later, in 1992. Data and insights derived from these investigations and experience with combination HIV treatments drove awareness that HCV could best be managed through a multiple drug approach, testing combinations of enzyme inhibitors and other molecules along a variety of pathways to suppress the virus’ capacity to replicate and develop resistance.
“Progress in drug development for HCV has occurred at a much faster pace than in areas like HIV. We’ve moved from a few isolated treatments to a pan-genotype cure in the space of about 10 years, which is remarkable given that there was really no development science behind this disease until after 1989,” says McHutchison.
The pace of innovation has been all the more remarkable given the unique epidemiology of HCV. In contrast to HIV, the disease has never attracted attention at a level commensurate to its reach; pundits call it the “stealth epidemic.” Before its distinct structure was revealed, the virus was confused with the other, more easily detectable forms of hepatitis, A and B. Spread of the virus was endemic through the donor blood supply until patient screening was widely introduced in the early 1990s, but cases of infection continue through unsafe surgical practices in developing countries as well as unsterilized needle exchanges and injection drug use, tattooing, and other types of unprotected behavior. This latter reflects another aspect of the disease: its largely unfounded association with stigmatized populations like prisoners and drug addicts. The breadth of potential exposures over time has resulted in reduced rates of diagnosis and a historical under-reporting of the actual number of HCV cases.
Tepid treatments—and half-hearted cures
The interferon class of powerful anti-infective drugs developed in the late 1980s was the first treatment approved for HCV, but its efficacy was low, with severe side-effects for most patients. In 2001, the FDA approved a longer lasting, pegylated interferon for use against HCV. Shortly after, researchers discovered that a combination of pegylated interferon together with an anti-viral drug, ribavirin, proved more effective in suppressing the virus than interferon alone. This quickly became the drug option of choice for the next decade. In 2011, researchers were able to apply learnings from the protease inhibitor class of medicines originally developed for HIV to the HCV space, resulting in the launch by Vertex later that year of Incivek, with a relatively higher rate of efficacy in patients with the genotype 1 strain of the disease—but only when combined with the interferon/ribavirin cocktail.
For most HCV patients, drug treatments for their condition proved frustratingly inadequate. All three of the drugs used in combination had potent side-effects, ranging from general malaise and flu to anemia, chronic nausea, cognitive impairment (“brain fog”), serious rash and/or anxiety, and depression. The regimen, which lasted as long as a year per treatment cycle, required weekly painful injections and frequent blood tests. More importantly, cure rates for the average patient hovered around 35% to 65%, depending on individual genotype, and relapse was not uncommon. The side-effects were such that half of all patients had to reduce the dosage of the combination drugs or even discontinue treatment prior to the end of the standard 24-to-48-week treatment cycle. This made the combination regimens even less effective on retreatment.
The larger implication was to perpetuate HCV’s status as a low opportunity target, which meant that the flow of money and scientific talent were diverted to more promising areas of research. Patients also suffered due to the natural tendency of clinicians to avoid prescribing medicines seen as causing more harm than good. An active clinical response was often dispensed in favor of “watchful waiting,” effectively placing patients in limbo—a slow slide toward disability and worse.
Gilead’s gap analysis
For Gilead, this downward spiral of expectations coincided with its own outsized ambitions to raise the bar on unmet medical need. A company whose credo to employees begins with the confident assertion that “being here matters” is not interested in a business model centered on the pursuit of incremental improvements. “Here was a condition affecting 160 million people worldwide where it could fairly be said that the majority of patients felt worse on therapy than without it,” Joe Steele, Gilead’s vice president of commercial operations, told Pharm Exec. “Given our stake in anti-virals, we saw it as a direct challenge that a community this large wasn’t being served by the existing drug delivery paradigm.”
In HIV, Gilead had eclipsed bigger, more experienced pharma rivals by focusing on patient concerns around efficacy, tolerability, and convenience. In doing so, it revolutionized patient care—and outflanked the AIDS virus —through a novel series of fixed-dose combination products. Gilead believed it could pursue an analogous approach for drug delivery, but this time with the goal to achieve what patients needed most: a quick and certain cure. “From both a scientific and commercial standpoint, a cure that was simple, safe, and free of interferon was the only approach that made sense to us,” says McHutchison. “In terms of a clinical approach, the relevant analogy was HIV. We knew we would need multiple drugs, working through multiple mechanisms of action, to prevent viral resistance. We also knew that the most effective therapy for patients is the simplest: a single tablet, administered orally for a short, fixed duration of time. And this oral regimen would have to work across all the different HCV genotypes, ultimately for routine use around the world.”
Man with a plan
It was a tall order. Gilead has been active in research on hepatitis B since its founding in 1987. But it was the June 2010 recruitment of McHutchison, a top-ranked researcher and clinician from Duke University, to run the company’s liver disease therapeutics program that increased the fixation on an HCV cure. McHutchison formed a multi-functional development team committed to developing a breakthrough product with four characteristics, which he called the “s set:” Safe; Simple; Short; and, of course, efficaciouS. The group mapped a 10-year course toward that ultimate regimen, to be achieved in a series of waves, starting with reduced reliance on interferon and ribavirin and their harsh side-effects; continuing with elimination of interferon from the HCV drug basket entirely; launching a new drug to be taken once a day, selectively targeting different genotypes; and ending with a single oral pill of universal efficacy, providing a cure across all six genotype strains of the virus.
Five years into the program, two new HCV products have been commercialized, and the company is making progress in breaching that last hurdle, on pan-genotypic efficacy. December 2013 marked the FDA authorization and launch of Sovaldi (sofosbuvir), a nucleotide analog formulation that in clinical trials prevented HCV from replicating, with a sustained virologic response or cure rate of more than 90%. Unlike candidates in other classes, sofosbuvir exhibited much higher potency against viral resistance while cutting the required duration of interferon by more than half. This in turn reduced the severity and duration of side-effects, which had for years been a serious barrier to treatment. These advantages were enhanced by oral administration of the drug in a treatment regimen of as little as 12 weeks, compared to the six to 12 month duration of conventional therapies relying heavily on injected interferon.
Two-hole punch
Despite its strong clinical profile, Sovaldi was intended as only the first “wave” in Gilead’s race to a cure. The medicine still has to be taken in combination with another anti-viral drug, ribavirin; in some cases, interferon is recommended as well.
Within nine months, however, Gilead had a second new product, Harvoni, which plugged most of the gaps in Sovaldi’s pharmacological profile. Approved by the FDA in October 2014, Harvoni is a fixed-dose combination of Sovaldi (sofosbuvir) and ledipasvir, a second nonstructural protein 5A (NS5A) inhibitor that came from Gilead’s labs. What is significant about Harvoni is that efficacy is accomplished without reliance on both earlier treatments, interferon and ribavarin. It avoids the severe side-effects associated with these two drugs, which often led to poor patient compliance.
Phase III trials results also showed Harvoni efficacy in about 95% of patients, all on the basis of a single daily pill taken for as little as eight weeks—record timing in the HCV space. More importantly, its FDA-approved label covers genotype 1 patients, the most common in the US.
Gilead is now moving to top the two “waves” in the HCV plan it devised back in 2010. A global multi-site Phase III trial involving more than 1,000 patients is underway to extend clinical progress from Sovaldi and Harvoni to create a single, safe but more potent oral pill that will work in all HCV patients, regardless of genotype. Results of that study will be available at the end of the third quarter of this year. Finally, the company is testing in parallel these fixed-dose combinations to tackle co-infections with HIV as well as populations of patients with HCV that are most in need.
McHutchison attributes the rapid scale up to the Gilead culture. “There are two ways to approach drug development. The first is to do the bare minimum to get the drug approved. The second is reaching beyond the regulatory process to understand the people most in need of the drug, to the full extent of how they might benefit. We chose the latter course.” McHutchison tells Pharm Exec that some of the biggest challenges were not only clinical but ensuring there was a supply chain at the ready to meet the pent-up demand for a cure. Adds Joe Steele, Gilead’s VP of commercial operations, “we faced some tough, time-sensitive issues linked to manufacturing—formulations, batch production and tonnage, volume estimates, quality control, transport—you name it.”
Finessing Pharmasset
Culture or not, some observers will wonder just how much sweat equity Gilead actually put in to solving the HCV puzzle. Its 2011 acquisition of rival HCV start-up Pharmasset spawned a discussion best summarized at the time by analysts’ consensus that Gilead had paid too much—$11 billion—to buy a drug invented by someone else. And how hard is that?
McHutchison begs to differ. “When we acquired Pharmasset, relatively little had been done to evaluate the full potential of this drug in the field. The clinical and commercial potential was unclear. We knew that Pharmasset’s investigatory candidate, PSI-7977, which eventually became Sovaldi, had demonstrated efficacy for several genotypes, but there was no efficacy data at all for genotype one, which in the US accounts for almost three-quarters of HCV patients. So right after the acquisition, we initiated two Phase III trials targeted at different sub-groups within genotype 2 and 3; a larger Phase III study centered on genotype 1; and a series of exploratory studies on difficult-to-treat patients including those with HIV, efficacy and safety of treatments before and after liver transplants, and other groups including the infected from marginalized populations.”
Initial readouts from some of this trial work were not all salutary—in one case, McHutchison relates, poor numbers on efficacy caused Gilead’s stock price to drop 10% overnight. Another ripple was the decision, just three weeks after the acquisition was announced, to shut down work on another nucleotide analog candidate in the Pharmasset pipeline after trial data revealed the drug was hepatotoxic. “It shows there was a degree of risk involved in that $11 billion.” Insists Steele, “all the agents we are now combining with Sovaldi to form the next generation of HCV drugs, including ledipasvir, the lead compound in Harvoni, come from discovery and development programs we initiated long before Pharmasset.” The deal complimented Gilead’s existing strengths; “in that sense it was a good fit.”
Beyond that, support from the clinician community proved instrumental in turning all that cumulative research into a highly effective, marketable cure. “Once we had Pharmasset, the pressure was on,” said McHutchison. “We had to move quickly to set up trial sites and recruit.” McHutchison leveraged his Duke ties, but he notes it was the “incredible efficiency” of Gilead’s in-house clinical development team that proved instrumental. Another factor was support from the FDA in collaboratively broadening recruitment criteria, particularly as interferon, with its many contraindications, was now sidelined from its previous role as a companion drug and comparator. “Based on the new interferon-free therapy, we were able to recruit a new cohort of marginalized patients with comorbidities. In one trial, we were able to enroll 600 patients in six weeks—no one had recruited at that pace before.”
It followed, too, that greater diversity in the enrollee pool reinforced the trials’ statistical conclusion that a broadly applicable cure was at hand. And it no doubt helps that results of six Phase III trials conducted by Gilead, post-acquisition, now bolster indications found on the labels for both Sovaldi and Harvoni.
Keeping it simple
Johnson and Steele also point to culture and institutional factors in prepping Sovaldi for its debut. Both note that Gilead is a flat organization, with minimal bureaucracy and only a few layers of management. A simple statistic helps back that up: even though Gilead’s annual revenue base is now bigger than Lilly’s, it has a fraction of the employee count: 7,000 worldwide, compared to Lilly’s 38,000. Steele offers, “it’s not rocket science. There is very little distance here between the people needing decisions made and the people making those decisions.”
Adds Johnson, “we value proximity. The lead marketers for the US organization in every therapeutic area we serve are on one floor in one building. If I have a question for my colleagues in HIV, I just walk down the hall.” One committee—the HCV Commercial Planning Group, chaired by Steele—managed all the strategic issues around the launch, including country-level guidance on product profiling, brand messaging, and locally targeted market research.
In addition, early-stage collaboration with McHutchison’s clinical development group ensured all clinical study designs included relevant information to support a positive reimbursement decision by local country authorities. “There was a strong quality of life element in our protocols, buttressed by independent health economics and outcomes research from local academics. More than a dozen peer review papers have been published to date that demonstrate how Sovaldi is a cost-effective solution to managing HCV,” McHutchison said. “In fact, says Johnson, “the clinical team moved so fast in getting Sovaldi to market that we on the commercial side had to constantly revise our own timelines. But that’s what you get when the product—not the process—sets the pace.”
Indeed, the breadth of the data helped Gilead obtain timely—and largely uncontroversial—coverage and reimbursement decisions from single-payer authorities in all the major European markets, including France, Germany, Spain, Italy, and at the UK National Institute for Health and Care Excellence (NICE), where the hard-to-meet quality-adjusted life-year standard is king. Sovaldi met that test, subject to a six-month deferred access proviso to accommodate a NHS budget glitch.
Aligning on access
Measured in sales numbers alone, the Sovaldi and Harvoni rollouts set records—on that score, Gilead’s success was undeniable. The one big miss is the reputational hit that Gilead took from US Medicaid and leading private-sector pharmacy benefit mangers (PBMs) for its decisions on pricing the two drugs, in which it was alleged the company failed to reach out in a timely manner to help them prepare for the financial impact. According to Gilead, pricing followed standard industry practice, benchmarked around what was already on the market—with a statistically defensible increment based on evidence of Sovaldi’s higher cure rate. The bigger challenge was accurately assessing demand for the product, a calculation where few payers appeared to have done their homework.
Gilead itself was caught short. “Right out of the gate, we found an unexpectedly large number of patients whose physicians had postponed drug therapy in anticipation of a new cure.” It turned out that Sovaldi was not just another rare disease product. “Facing up to that proved tough going,” Johnson told Pharm Exec. “State Medicaid agencies, in particular, had a difficult time predicting the demand and also had to work within fixed budgets.” And HCV had such a low public profile that many assumed it was a rare disease—could it be said the epidemiologists were asleep at the switch?
Despite the kerfuffle over pricing, all the key stakeholders in HCV—industry, payers, providers, and, of course, patients—have still committed to find a way to access these products. Some 140,000 US patients received Sovaldi in 2014, the highest ever recorded for a single product in a single year.
The company forecasts that this year more than 250,000 new patients in the US will be prescribed either of the two products, with Harvoni out in front of Sovaldi. “Payers have gotten to grips with budget planning, so we expect more patients at less advanced stages of the disease will be placed on treatment,” said Johnson. Gilead has inked 2015 contracts with all but one of the big PBMs—Express Scripts went with AbbVie’s Viekira Pak—giving its two products exclusive exposure to around 80% of the covered lives in PBM commercial plans. These arrangements also provide access to more patients with lower HCV fibrosis scores, broadening the potential treatment pool.
Surprise: the market works
What this says is, far from being immovable on price, Gilead is now aggressively discounting its products to beat market competition, particularly with the biggest customers. Rebates on the wholesale price of Harvoni and Sovaldi are expected to average around 46% this year, and more than 50% on the public Medicaid and VA accounts, a segment where Gilead intends to boost its share of scrip. Volume-adjusted pricing is the norm for the HCV business in Europe. Gilead is also ratcheting up Support Path, its subsidized US patient access program on HCV, which offers eligible patients co-pays of as little as $5 per month, particularly among those with no or partial insurance cover.
Acknowledgment of these concessions from top management early this year caused a temporary blip in Gilead’s market cap, suggesting that the company will not be immune from investor pressure going forward. Nevertheless, from a strategic standpoint, Gilead can count on four positive currents: (1) leading edge science; (2) a big pool of poorly diagnosed patients; (3) a progressive suite of carefully differentiated products; and (4) a patent fence that, in Sovaldi’s case, runs to March 2029.
Last words—three, to be exact
Ultimately, any agenda in pharma should begin around the patient. So it’s fitting to conclude our Brand of the Year profile by relaying a Pharm Exec dialogue with another HCV survivor, Charlotte Stewart, an avid traveler and active grandparent who was diagnosed with the virus in 1998. “In a routine physical, it was discovered my liver enzymes were elevated, which led my physician to test me for HCV. When the results came back positive for the virus, I finally had an explanation for the fatigue, aches, and recurrent infections I had experienced over the past year, which had me continually popping antibiotics.” Soon after, Stewart commenced no less than five different interferon-based drug regimens lasting for another 15 years, all of which temporarily suppressed the virus but ended in relapse, while causing side-effects that simply aggravated the virus’s underlying symptoms.
May 12, 2015
Pharmaceutical Executive May 2015
Modern medicine is founded more on facts than faith. But for hepatitis C virus (HCV) patient Gavin West, the single pill drug Harvoni is not just a virus-wiping cure—it’s a miracle. Ironically, it was April 3—Good Friday to millions of Christians—that the 59-year-old singer and retired avionics specialist walked out on a Nashville stage with his musical partner, well-known local songwriter Rob K. Wolf, to celebrate a physical and spiritual restoration of his own. Instead of queuing for a liver transplant, West that Friday resumed his sets with Wolf—live, to a receptive audience of hundreds, who remembered him well. Says West, “Harvoni gave me my voice back along with hands that could again feel the strings on the guitar that had sat under my bed, unused, for more than 10 years.”
Whether you classify West’s case as a clinical outcome or just an arresting anecdote, the facts on Harvoni and its companion, first-to-launch predecessor, Sovaldi, don’t strike the flat encore notes often associated with a breakthrough drug. For the 170,000 HCV patients prescribed the two drugs since the initial US launch of Sovaldi in December 2013, Gilead’s one-two punch hits home. A trial-certified efficacy rate of well over 90% made Sovaldi the first well-tolerated cure for a disease most patients didn’t even know they had until it damaged the liver, one of the body’s most essential, complex—and costly to replace—organs. With its shortened duration to cure, and an even higher efficacy rate, Harvoni does it even better.
Gilead’s executive VP for clinical research, Dr. John McHutchison, summarized it this way in a recent interview with Pharm Exec. “When Sovaldi was approved, it was the first all-oral regimen for genotypes 2 and 3 of the virus, which covers more than a third of the infected population here in the US. In patients with genotype 1, it allowed for a much shorter treatment time in combination with interferon, which cut the severe side-effects associated with previous use of that older medicine. Response rates to Sovaldi were all higher than had ever been seen before, in excess of 90%, while therapy discontinuation fell to under 2%—an astounding number, given that the basic characteristic of prior drug treatments was to leave both patient and clinician discouraged by the reality that those side-effects could actually make you feel worse than the disease itself.”
Bending the curve
The 31 members of Pharm Exec’s Editorial Advisory Board (EAB) seem to agree, tapping Sovaldi and Harvoni together as our 9th Brand of the Year, in a unanimous vote. That itself is a precedent for this normally contentious group. Our EAB cited Gilead Science’s unwavering commitment to a strong franchise in anti-viral therapies through clinically useful drug combinations whose tolerability appeals to patients. Perhaps more important is the psychological boost provided by the $10.3 billion in US sales posted by Sovaldi in 2014, a first-year launch record unmatched by any previous brand name drug. Combined with some $2 billion in post-FDA approval revenues from Harvoni, this HCV breakthrough duo fell just short of matching the $12.5 billion in 2014 sales of the top-selling US branded drug, Humira, first marketed back in 2003.
It’s also rare to see any branded medicine with such a transformative effect on a company’s fortunes and mission. With Sovaldi leading the way, Gilead’s full-year revenues for 2014 leapt to $24.9 billion, up 127% from the $11.3 billion it posted in 2013. This year, the company will enter the top 10 of our annual Pharma 50 revenues ranking, nosing out century-old R&D icon Eli Lilly & Co. as well as AbbVie and AstraZeneca. Just five years ago, Gilead sat at No. 23 on the list.
And while Gilead remains tightly focused on the anti-viral business, HCV has—at least for the moment—eclipsed the company’s traditional weight in the HIV space. In 2013, prior to Sovaldi, 76% of Gilead’s net revenue growth was attributable to HIV, where the company markets the top three US selling drugs for AIDS; hepatitis (specifically, the B strain) was a distant also ran, at 10%. Today, the situation is on its way to being reversed, with HCV accounting for 48% of total revenue in 2014, compared to 44% for HIV.
The company sees this as a simple confirmation of its business model. From a purely clinical perspective, the two segments are almost complementary. Research insights and marketing precedents from Gilead’s two decades of trench warfare against HIV—Gilead launched its first antiretroviral, Viread, back in 2001 (a joint indication for HBV was added in 2008)—has helped it secure leadership in the far bigger market for HCV. With 160 million people infected worldwide, the numbers on HCV incidence are more than four times higher than for HIV. “We believe there is substantial room for growth at both ends of an anti-viral business with major unmet medical need,” Gilead President and COO John Milligan told analysts at January’s JP Morgan investor conference.
Fast and furious
More importantly, the Sovaldi story dispels the prevalent view that medical progress always occurs at a glacial pace, measured in multiples of decades rather than years. Instead, the race for a cure for HCV proceeded in a series of predictable relays, borne by the momentum of great science. Once the properties of the virus were identified in 1989 by a team led by the San Francisco-based vaccine company Chiron, researchers focused on creating reliable high-throughput screening systems for use in both the lab setting and for viral detection in the population. That goal was accomplished only a few years later, in 1992. Data and insights derived from these investigations and experience with combination HIV treatments drove awareness that HCV could best be managed through a multiple drug approach, testing combinations of enzyme inhibitors and other molecules along a variety of pathways to suppress the virus’ capacity to replicate and develop resistance.
“Progress in drug development for HCV has occurred at a much faster pace than in areas like HIV. We’ve moved from a few isolated treatments to a pan-genotype cure in the space of about 10 years, which is remarkable given that there was really no development science behind this disease until after 1989,” says McHutchison.
The pace of innovation has been all the more remarkable given the unique epidemiology of HCV. In contrast to HIV, the disease has never attracted attention at a level commensurate to its reach; pundits call it the “stealth epidemic.” Before its distinct structure was revealed, the virus was confused with the other, more easily detectable forms of hepatitis, A and B. Spread of the virus was endemic through the donor blood supply until patient screening was widely introduced in the early 1990s, but cases of infection continue through unsafe surgical practices in developing countries as well as unsterilized needle exchanges and injection drug use, tattooing, and other types of unprotected behavior. This latter reflects another aspect of the disease: its largely unfounded association with stigmatized populations like prisoners and drug addicts. The breadth of potential exposures over time has resulted in reduced rates of diagnosis and a historical under-reporting of the actual number of HCV cases.
Moving target
HCV is endlessly inventive in forming new versions of itself, which makes the task of mapping appropriate drug targets very difficult. Composed of a single strand of RNA, the virus has at least six genetically distinct variations. Once in the blood stream, the virus does its work silently. Generalized, non-attributable symptoms like fatigue, body aches, weight loss, and depression persist over many years. Early detection is essential because, in the majority of cases, the virus progressively attacks the liver, often leading to cirrhosis and liver cancer. Treatment for the end-stage of liver disease may require full or partial organ transplant to ensure survival. Besides being a difficult and costly procedure, liver transplants carry a 100 % HCV recurrence rate without effective treatments.
The bottom line is that HCV remains a serious illness with a lasting residual effect on public health. Its impact spans gender, race, age, and economic class. Some 3.2 million Americans are estimated to be infected with the virus; approximately one half, or 1.6 million people, have been diagnosed.
More importantly, the annual US death toll from HCV has surpassed deaths from HIV since 2007, when 15,000 people succumbed to conditions caused by HCV, compared to slightly less than 13,000 from HIV. A February 2012 study published in the Annals of Internal Medicine predicted that annual HCV deaths in the US would more than double by 2030, to 35,000, due to the aging of infected baby boomers born before the introduction of blood donor screening requirements. This estimate did not anticipate an effective cure over this period, but it, nevertheless, serves to indicate how broad the potential benefits of Sovaldi are from a public health perspective. Globally, the potential payoff is even bigger. World Health Organization (WHO) statistics attribute 500,000 deaths a year to HCV.
HCV is endlessly inventive in forming new versions of itself, which makes the task of mapping appropriate drug targets very difficult. Composed of a single strand of RNA, the virus has at least six genetically distinct variations. Once in the blood stream, the virus does its work silently. Generalized, non-attributable symptoms like fatigue, body aches, weight loss, and depression persist over many years. Early detection is essential because, in the majority of cases, the virus progressively attacks the liver, often leading to cirrhosis and liver cancer. Treatment for the end-stage of liver disease may require full or partial organ transplant to ensure survival. Besides being a difficult and costly procedure, liver transplants carry a 100 % HCV recurrence rate without effective treatments.
The bottom line is that HCV remains a serious illness with a lasting residual effect on public health. Its impact spans gender, race, age, and economic class. Some 3.2 million Americans are estimated to be infected with the virus; approximately one half, or 1.6 million people, have been diagnosed.
More importantly, the annual US death toll from HCV has surpassed deaths from HIV since 2007, when 15,000 people succumbed to conditions caused by HCV, compared to slightly less than 13,000 from HIV. A February 2012 study published in the Annals of Internal Medicine predicted that annual HCV deaths in the US would more than double by 2030, to 35,000, due to the aging of infected baby boomers born before the introduction of blood donor screening requirements. This estimate did not anticipate an effective cure over this period, but it, nevertheless, serves to indicate how broad the potential benefits of Sovaldi are from a public health perspective. Globally, the potential payoff is even bigger. World Health Organization (WHO) statistics attribute 500,000 deaths a year to HCV.
Tepid treatments—and half-hearted cures
The interferon class of powerful anti-infective drugs developed in the late 1980s was the first treatment approved for HCV, but its efficacy was low, with severe side-effects for most patients. In 2001, the FDA approved a longer lasting, pegylated interferon for use against HCV. Shortly after, researchers discovered that a combination of pegylated interferon together with an anti-viral drug, ribavirin, proved more effective in suppressing the virus than interferon alone. This quickly became the drug option of choice for the next decade. In 2011, researchers were able to apply learnings from the protease inhibitor class of medicines originally developed for HIV to the HCV space, resulting in the launch by Vertex later that year of Incivek, with a relatively higher rate of efficacy in patients with the genotype 1 strain of the disease—but only when combined with the interferon/ribavirin cocktail.
For most HCV patients, drug treatments for their condition proved frustratingly inadequate. All three of the drugs used in combination had potent side-effects, ranging from general malaise and flu to anemia, chronic nausea, cognitive impairment (“brain fog”), serious rash and/or anxiety, and depression. The regimen, which lasted as long as a year per treatment cycle, required weekly painful injections and frequent blood tests. More importantly, cure rates for the average patient hovered around 35% to 65%, depending on individual genotype, and relapse was not uncommon. The side-effects were such that half of all patients had to reduce the dosage of the combination drugs or even discontinue treatment prior to the end of the standard 24-to-48-week treatment cycle. This made the combination regimens even less effective on retreatment.
The larger implication was to perpetuate HCV’s status as a low opportunity target, which meant that the flow of money and scientific talent were diverted to more promising areas of research. Patients also suffered due to the natural tendency of clinicians to avoid prescribing medicines seen as causing more harm than good. An active clinical response was often dispensed in favor of “watchful waiting,” effectively placing patients in limbo—a slow slide toward disability and worse.
Gilead’s gap analysis
For Gilead, this downward spiral of expectations coincided with its own outsized ambitions to raise the bar on unmet medical need. A company whose credo to employees begins with the confident assertion that “being here matters” is not interested in a business model centered on the pursuit of incremental improvements. “Here was a condition affecting 160 million people worldwide where it could fairly be said that the majority of patients felt worse on therapy than without it,” Joe Steele, Gilead’s vice president of commercial operations, told Pharm Exec. “Given our stake in anti-virals, we saw it as a direct challenge that a community this large wasn’t being served by the existing drug delivery paradigm.”
In HIV, Gilead had eclipsed bigger, more experienced pharma rivals by focusing on patient concerns around efficacy, tolerability, and convenience. In doing so, it revolutionized patient care—and outflanked the AIDS virus —through a novel series of fixed-dose combination products. Gilead believed it could pursue an analogous approach for drug delivery, but this time with the goal to achieve what patients needed most: a quick and certain cure. “From both a scientific and commercial standpoint, a cure that was simple, safe, and free of interferon was the only approach that made sense to us,” says McHutchison. “In terms of a clinical approach, the relevant analogy was HIV. We knew we would need multiple drugs, working through multiple mechanisms of action, to prevent viral resistance. We also knew that the most effective therapy for patients is the simplest: a single tablet, administered orally for a short, fixed duration of time. And this oral regimen would have to work across all the different HCV genotypes, ultimately for routine use around the world.”
Man with a plan
It was a tall order. Gilead has been active in research on hepatitis B since its founding in 1987. But it was the June 2010 recruitment of McHutchison, a top-ranked researcher and clinician from Duke University, to run the company’s liver disease therapeutics program that increased the fixation on an HCV cure. McHutchison formed a multi-functional development team committed to developing a breakthrough product with four characteristics, which he called the “s set:” Safe; Simple; Short; and, of course, efficaciouS. The group mapped a 10-year course toward that ultimate regimen, to be achieved in a series of waves, starting with reduced reliance on interferon and ribavirin and their harsh side-effects; continuing with elimination of interferon from the HCV drug basket entirely; launching a new drug to be taken once a day, selectively targeting different genotypes; and ending with a single oral pill of universal efficacy, providing a cure across all six genotype strains of the virus.
Five years into the program, two new HCV products have been commercialized, and the company is making progress in breaching that last hurdle, on pan-genotypic efficacy. December 2013 marked the FDA authorization and launch of Sovaldi (sofosbuvir), a nucleotide analog formulation that in clinical trials prevented HCV from replicating, with a sustained virologic response or cure rate of more than 90%. Unlike candidates in other classes, sofosbuvir exhibited much higher potency against viral resistance while cutting the required duration of interferon by more than half. This in turn reduced the severity and duration of side-effects, which had for years been a serious barrier to treatment. These advantages were enhanced by oral administration of the drug in a treatment regimen of as little as 12 weeks, compared to the six to 12 month duration of conventional therapies relying heavily on injected interferon.
Two-hole punch
Despite its strong clinical profile, Sovaldi was intended as only the first “wave” in Gilead’s race to a cure. The medicine still has to be taken in combination with another anti-viral drug, ribavirin; in some cases, interferon is recommended as well.
Within nine months, however, Gilead had a second new product, Harvoni, which plugged most of the gaps in Sovaldi’s pharmacological profile. Approved by the FDA in October 2014, Harvoni is a fixed-dose combination of Sovaldi (sofosbuvir) and ledipasvir, a second nonstructural protein 5A (NS5A) inhibitor that came from Gilead’s labs. What is significant about Harvoni is that efficacy is accomplished without reliance on both earlier treatments, interferon and ribavarin. It avoids the severe side-effects associated with these two drugs, which often led to poor patient compliance.
Phase III trials results also showed Harvoni efficacy in about 95% of patients, all on the basis of a single daily pill taken for as little as eight weeks—record timing in the HCV space. More importantly, its FDA-approved label covers genotype 1 patients, the most common in the US.
Gilead is now moving to top the two “waves” in the HCV plan it devised back in 2010. A global multi-site Phase III trial involving more than 1,000 patients is underway to extend clinical progress from Sovaldi and Harvoni to create a single, safe but more potent oral pill that will work in all HCV patients, regardless of genotype. Results of that study will be available at the end of the third quarter of this year. Finally, the company is testing in parallel these fixed-dose combinations to tackle co-infections with HIV as well as populations of patients with HCV that are most in need.
McHutchison attributes the rapid scale up to the Gilead culture. “There are two ways to approach drug development. The first is to do the bare minimum to get the drug approved. The second is reaching beyond the regulatory process to understand the people most in need of the drug, to the full extent of how they might benefit. We chose the latter course.” McHutchison tells Pharm Exec that some of the biggest challenges were not only clinical but ensuring there was a supply chain at the ready to meet the pent-up demand for a cure. Adds Joe Steele, Gilead’s VP of commercial operations, “we faced some tough, time-sensitive issues linked to manufacturing—formulations, batch production and tonnage, volume estimates, quality control, transport—you name it.”
Finessing Pharmasset
Culture or not, some observers will wonder just how much sweat equity Gilead actually put in to solving the HCV puzzle. Its 2011 acquisition of rival HCV start-up Pharmasset spawned a discussion best summarized at the time by analysts’ consensus that Gilead had paid too much—$11 billion—to buy a drug invented by someone else. And how hard is that?
McHutchison begs to differ. “When we acquired Pharmasset, relatively little had been done to evaluate the full potential of this drug in the field. The clinical and commercial potential was unclear. We knew that Pharmasset’s investigatory candidate, PSI-7977, which eventually became Sovaldi, had demonstrated efficacy for several genotypes, but there was no efficacy data at all for genotype one, which in the US accounts for almost three-quarters of HCV patients. So right after the acquisition, we initiated two Phase III trials targeted at different sub-groups within genotype 2 and 3; a larger Phase III study centered on genotype 1; and a series of exploratory studies on difficult-to-treat patients including those with HIV, efficacy and safety of treatments before and after liver transplants, and other groups including the infected from marginalized populations.”
Initial readouts from some of this trial work were not all salutary—in one case, McHutchison relates, poor numbers on efficacy caused Gilead’s stock price to drop 10% overnight. Another ripple was the decision, just three weeks after the acquisition was announced, to shut down work on another nucleotide analog candidate in the Pharmasset pipeline after trial data revealed the drug was hepatotoxic. “It shows there was a degree of risk involved in that $11 billion.” Insists Steele, “all the agents we are now combining with Sovaldi to form the next generation of HCV drugs, including ledipasvir, the lead compound in Harvoni, come from discovery and development programs we initiated long before Pharmasset.” The deal complimented Gilead’s existing strengths; “in that sense it was a good fit.”
Beyond that, support from the clinician community proved instrumental in turning all that cumulative research into a highly effective, marketable cure. “Once we had Pharmasset, the pressure was on,” said McHutchison. “We had to move quickly to set up trial sites and recruit.” McHutchison leveraged his Duke ties, but he notes it was the “incredible efficiency” of Gilead’s in-house clinical development team that proved instrumental. Another factor was support from the FDA in collaboratively broadening recruitment criteria, particularly as interferon, with its many contraindications, was now sidelined from its previous role as a companion drug and comparator. “Based on the new interferon-free therapy, we were able to recruit a new cohort of marginalized patients with comorbidities. In one trial, we were able to enroll 600 patients in six weeks—no one had recruited at that pace before.”
It followed, too, that greater diversity in the enrollee pool reinforced the trials’ statistical conclusion that a broadly applicable cure was at hand. And it no doubt helps that results of six Phase III trials conducted by Gilead, post-acquisition, now bolster indications found on the labels for both Sovaldi and Harvoni.
Making the case
With such strong scientific credentials behind it, is it true to conclude that the commercial launch of Sovaldi was an anticlimactic event—that rare case of a product so good it could sell itself? Conversations with the Gilead HCV commercial team suggest this premise carries some weight, but ultimately fails to account for those pesky “human elements” that can intervene to either bolster that good case—or suppress it. “There was really no challenge for us to align customers around this product,” says David Johnson, VP for US sales and marketing in Gilead’s liver disease business unit. “The science was strong and the data we compiled was very convincing.” Johnson notes that the HCV clinical community is small and very tight knit; because practitioners were enthusiastic backers of the trial work undertaken by Gilead, they required little convincing about Sovaldi’s merits in giving them—and their patients—a real chance for a cure.
The primary driver in the launch was educating physicians on the proper course of treatment for each patient—a complex task. Says Johnson, “With six Phase III trials embedded in the label, we needed to ensure prescribers understood the data on which the FDA based its approval. There are six genotypes of the disease, and different regimens and duration are indicated for some of them.” This is where the quality of Gilead’s trial work played out: because McHutchison and his team insisted on including a full range of test subjects, especially sequences of subjects with lower and lower blood platelet counts, the results provided a highly accurate indication of how Sovaldi (and later Harvoni) would work under real-world conditions. The positive readout was recycled back to patients, too, through an unbranded disease awareness campaign urging them to seek help because, for the first time, a cure offered the hope of being able to resume a normal life.
With such strong scientific credentials behind it, is it true to conclude that the commercial launch of Sovaldi was an anticlimactic event—that rare case of a product so good it could sell itself? Conversations with the Gilead HCV commercial team suggest this premise carries some weight, but ultimately fails to account for those pesky “human elements” that can intervene to either bolster that good case—or suppress it. “There was really no challenge for us to align customers around this product,” says David Johnson, VP for US sales and marketing in Gilead’s liver disease business unit. “The science was strong and the data we compiled was very convincing.” Johnson notes that the HCV clinical community is small and very tight knit; because practitioners were enthusiastic backers of the trial work undertaken by Gilead, they required little convincing about Sovaldi’s merits in giving them—and their patients—a real chance for a cure.
The primary driver in the launch was educating physicians on the proper course of treatment for each patient—a complex task. Says Johnson, “With six Phase III trials embedded in the label, we needed to ensure prescribers understood the data on which the FDA based its approval. There are six genotypes of the disease, and different regimens and duration are indicated for some of them.” This is where the quality of Gilead’s trial work played out: because McHutchison and his team insisted on including a full range of test subjects, especially sequences of subjects with lower and lower blood platelet counts, the results provided a highly accurate indication of how Sovaldi (and later Harvoni) would work under real-world conditions. The positive readout was recycled back to patients, too, through an unbranded disease awareness campaign urging them to seek help because, for the first time, a cure offered the hope of being able to resume a normal life.
Keeping it simple
Johnson and Steele also point to culture and institutional factors in prepping Sovaldi for its debut. Both note that Gilead is a flat organization, with minimal bureaucracy and only a few layers of management. A simple statistic helps back that up: even though Gilead’s annual revenue base is now bigger than Lilly’s, it has a fraction of the employee count: 7,000 worldwide, compared to Lilly’s 38,000. Steele offers, “it’s not rocket science. There is very little distance here between the people needing decisions made and the people making those decisions.”
Adds Johnson, “we value proximity. The lead marketers for the US organization in every therapeutic area we serve are on one floor in one building. If I have a question for my colleagues in HIV, I just walk down the hall.” One committee—the HCV Commercial Planning Group, chaired by Steele—managed all the strategic issues around the launch, including country-level guidance on product profiling, brand messaging, and locally targeted market research.
In addition, early-stage collaboration with McHutchison’s clinical development group ensured all clinical study designs included relevant information to support a positive reimbursement decision by local country authorities. “There was a strong quality of life element in our protocols, buttressed by independent health economics and outcomes research from local academics. More than a dozen peer review papers have been published to date that demonstrate how Sovaldi is a cost-effective solution to managing HCV,” McHutchison said. “In fact, says Johnson, “the clinical team moved so fast in getting Sovaldi to market that we on the commercial side had to constantly revise our own timelines. But that’s what you get when the product—not the process—sets the pace.”
Indeed, the breadth of the data helped Gilead obtain timely—and largely uncontroversial—coverage and reimbursement decisions from single-payer authorities in all the major European markets, including France, Germany, Spain, Italy, and at the UK National Institute for Health and Care Excellence (NICE), where the hard-to-meet quality-adjusted life-year standard is king. Sovaldi met that test, subject to a six-month deferred access proviso to accommodate a NHS budget glitch.
Aligning on access
Measured in sales numbers alone, the Sovaldi and Harvoni rollouts set records—on that score, Gilead’s success was undeniable. The one big miss is the reputational hit that Gilead took from US Medicaid and leading private-sector pharmacy benefit mangers (PBMs) for its decisions on pricing the two drugs, in which it was alleged the company failed to reach out in a timely manner to help them prepare for the financial impact. According to Gilead, pricing followed standard industry practice, benchmarked around what was already on the market—with a statistically defensible increment based on evidence of Sovaldi’s higher cure rate. The bigger challenge was accurately assessing demand for the product, a calculation where few payers appeared to have done their homework.
Gilead itself was caught short. “Right out of the gate, we found an unexpectedly large number of patients whose physicians had postponed drug therapy in anticipation of a new cure.” It turned out that Sovaldi was not just another rare disease product. “Facing up to that proved tough going,” Johnson told Pharm Exec. “State Medicaid agencies, in particular, had a difficult time predicting the demand and also had to work within fixed budgets.” And HCV had such a low public profile that many assumed it was a rare disease—could it be said the epidemiologists were asleep at the switch?
Despite the kerfuffle over pricing, all the key stakeholders in HCV—industry, payers, providers, and, of course, patients—have still committed to find a way to access these products. Some 140,000 US patients received Sovaldi in 2014, the highest ever recorded for a single product in a single year.
The company forecasts that this year more than 250,000 new patients in the US will be prescribed either of the two products, with Harvoni out in front of Sovaldi. “Payers have gotten to grips with budget planning, so we expect more patients at less advanced stages of the disease will be placed on treatment,” said Johnson. Gilead has inked 2015 contracts with all but one of the big PBMs—Express Scripts went with AbbVie’s Viekira Pak—giving its two products exclusive exposure to around 80% of the covered lives in PBM commercial plans. These arrangements also provide access to more patients with lower HCV fibrosis scores, broadening the potential treatment pool.
Surprise: the market works
What this says is, far from being immovable on price, Gilead is now aggressively discounting its products to beat market competition, particularly with the biggest customers. Rebates on the wholesale price of Harvoni and Sovaldi are expected to average around 46% this year, and more than 50% on the public Medicaid and VA accounts, a segment where Gilead intends to boost its share of scrip. Volume-adjusted pricing is the norm for the HCV business in Europe. Gilead is also ratcheting up Support Path, its subsidized US patient access program on HCV, which offers eligible patients co-pays of as little as $5 per month, particularly among those with no or partial insurance cover.
Acknowledgment of these concessions from top management early this year caused a temporary blip in Gilead’s market cap, suggesting that the company will not be immune from investor pressure going forward. Nevertheless, from a strategic standpoint, Gilead can count on four positive currents: (1) leading edge science; (2) a big pool of poorly diagnosed patients; (3) a progressive suite of carefully differentiated products; and (4) a patent fence that, in Sovaldi’s case, runs to March 2029.
Last words—three, to be exact
Ultimately, any agenda in pharma should begin around the patient. So it’s fitting to conclude our Brand of the Year profile by relaying a Pharm Exec dialogue with another HCV survivor, Charlotte Stewart, an avid traveler and active grandparent who was diagnosed with the virus in 1998. “In a routine physical, it was discovered my liver enzymes were elevated, which led my physician to test me for HCV. When the results came back positive for the virus, I finally had an explanation for the fatigue, aches, and recurrent infections I had experienced over the past year, which had me continually popping antibiotics.” Soon after, Stewart commenced no less than five different interferon-based drug regimens lasting for another 15 years, all of which temporarily suppressed the virus but ended in relapse, while causing side-effects that simply aggravated the virus’s underlying symptoms.
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