Another Threat To Gilead Has Emerged

From Hillary Clinton to Bernie Sanders, politicians brought up the issue of price-gouging by pharmaceutical companies. Many have been reacting to complaints by constituents or potential constituents. Politicians have taken a particular interest in HCV providers, Gilead GILD and AbbVie ABBV. Earlier this week, New York Attorney General Eric Schneiderman threw a shot across the bow with his investigation of health insurers’ coverage of HCV restrictions:

The New York state attorney general has asked 16 health insurance companies for information on their coverage of hepatitis C treatments, amid concerns that some companies are restricting coverage of the expensive medications, according to a person familiar with the investigation.

Attorney General Eric Schneiderman’s office has issued subpoenas to the health insurers, including Anthem Inc. ANTM, Aetna Inc. AET and EmblemHealth Inc., requesting documents explaining how they make decisions on who to cover or not, said the person, who declined to be identified because the matter wasn’t public.

Since pharmacy benefit managers like Express Scripts ESRX and CVS CVS prompted a pricing war between AbbVie and Gilead, HCV prices have fallen considerably. The bull case suggests that prices have come down to the point where average citizens can now afford an HCV regimen. Market chatter also suggests that those with the most acute cases of HCV are first in line to receive treatment. My read on Schneiderman’s investigation is that these claims may not be the case.

The Situation

Schneiderman Could Put HCV Access In Insurers’ Baliliwick …

What amount of discounts on HCV regimens are and who actually receives them remain murky. In January, Massachusetts Attorney General Maura Healey threatened to sue Gilead because its high prices potentially represented unfair trade practices; while federal prisons received discounts on HCV drugs, Healey’s state prisons did not. For consumers, access to HCV treatment could be determined by how hard-nosed one’s insurer is on restricting high-priced medications.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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