The Battle of the Meds
The pharmaceutical industries at this stage promise four or five new drugs in the coming years that would be considered game changer. These drugs would play a vital role in modifying the cure of chronic diseases. But the new wave is already underway, with the hepatitis C treatments already surfacing the market. Gilead Sciences (NASDAQ:GILD) has had a head start with its prime drug Sovaldi, which has already generated a large sum of $8.5 billion in sales, with in the first 3 quarters. The drug comes with its fixed combo known as Harvoni, which at this stage is awaiting approval from FDA. Once that’s done, Gilead (NASDAQ:GILD) could be looking forward to being a market leader catering to 3 to 4 million patients just in the US.
Harvoni promises a 99% cure rate for selected patients with in its 8 week treatment. Harvoni comes with such high hopes attached that Johnson & Johnson (NYSE:JNJ) is removing its new hepatitis C medicines off the shelf. Other co prescription drugs cost more than the Harvoni.
But not all companies are looking into giving up their market share without a fight. AbbVie (NYSE:ABBV) is in the process of gaining FDA approval for it triple combination therapy in collaboration with Enanta Pharmaceuticals (NASDAQ:ENTA) to place a medicine to cut off Harvoni from the beginning of 2015. But when looking at actual figures and conditions, AbbVie (NYSE:ABBV) might be lucky if it is able to gain even 20% of the market share, as Harvoni already has a head start in the market. But officials at AbbVie (NYSE:ABBV) believe that their plans for next year are much higher than the roughly calculated figure of $3 billion annually, and they just might be right. As Gilead (NASDAQ: GILD)’s Harvoni has a competitive edge over AbbVie’s therapy because of fewer tablet dose and short term treatment duration.
AbbVie (NYSE:ABBV) has decided to compete with Harvoni, by offering reimbursement schemes and an impressive 88% loyalty rate for customers willing to adopt the three pills doasge. When it comes to short term treatment, there is no rule or study indicating that the patients will fully recover in 8 weeks, and some very sick patients ought to take up to 12 weeks.
Since both medicines are considered very effective in their respective ways, it just might come down to pricing to gain market share. At this point, Harvoni revealed its price of $1,125 per pill or $94000 for a 12 week treatment course. But it’s brought into their attention that Medicaid or other such companies won’t be able to cover even $63000 of the treatment. Hence, their preference is already titled towards AbbVie (NYSE:ABBV)’s therapy. But the company till this point has kept quiet about it pricing plans.
Another important aspect to keep in mind here is when Humira competition rose, analysts predicted AbbVie (NYSE:ABBV) to fall out of business, but instead the company kept expanding and gaining market share. The company will take similar measures and retain market share for hepatitis C treatment.