Gilead and AbbVie take hepatitis C battle to Europe

Source: Financial Times

19 Jan 2015

Hepatitis C VirusEurope is to become the next battleground between Gilead Sciences and AbbVie in their scramble to win share of the fast-growing market for hepatitis C drugs.

The companies have been fighting a high-profile price war in the US over a new generation of blockbuster medicines that can cure most people with the virus within weeks.

The pair are preparing to open a new front across the Atlantic after European regulators gave AbbVie’s hepatitis C treatment the green light on Friday.

Competition will be welcomed by public-funded European health systems that have been rattled by the high cost of Gilead’s Sovaldi medicine, which is priced at £34,983 for a 12-week course in the UK.

Rick Gonzalez, AbbVie chief executive, said the company was “committed to working with local governments and healthcare systems to support broad access” to its treatment.

According to the World Health Organisation there are about 15m people infected with hepatitis C in Europe — about one in 50 of the population. The disease leads to potentially life-threatening liver cirrhosis in about a third of cases.

It was announced last week that NHS England would delay full-scale introduction of Sovaldi by four months until the end of July to give it more time to prepare. Patient groups saw this as a cost-saving measure.

Charles Gore, chief executive of the UK-based Hepatitis C Trust, urged European governments and health providers to use the arrival of AbbVie’s product as an opportunity to push for lower prices and wider access.

He said: “Governments should say: ‘give us a better price and we will guarantee higher volumes’. Here we have a life-threatening infectious disease which is suddenly curable in most cases. So let’s find a way to give it to everyone.”

The negotiating power of Europe’s single-payer health systems has already secured discounts from Gilead of more than 36 per cent over the US price of Sovaldi and the entry of AbbVie could drive deeper cuts.

AbbVie launched its product in the US last month at a price of $83,319 for a 12-week course — just below the price of Sovaldi and sharply less than the $94,500 charged by Gilead for a new Sovaldi-based combination treatment called Harvoni.

This has triggered a discounting battle as the pair compete to sell their medicines to rival US health insurance plans.

Both companies declined to comment on their European pricing strategy.

AbbVie’s treatment was approved on Friday by the European Medicines Agency for use in patients with the genotype 1 form of hepatitis C, which represent 60 per cent of cases.

The market for hepatitis C drugs is forecast by Datamonitor Healthcare to increase from $2.9bn in 2013 to $19.2bn in 2016. Of this, the top five European markets — France, Germany, Italy, Spain and the UK — accounted for $872m in 2013, rising to a forecast $4bn next year.

The medicines are replacing old interferon-based treatments that have much lower success rates and more unpleasant side effects.

Gilead and AbbVie have sought to justify their high prices by arguing that curing the disease saves money in the long-run by avoiding the higher cost of liver transplants and other care.


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