Gilead Sciences plans to launch in the US authorized generic versions of its two top-selling treatments for chronic hepatitis C virus (HCV), Epclusa (sofosbuvir 400 mg/velpatasvir 100 mg) and Harvoni (ledipasvir 90 mg/sofosbuvir 400 mg), through a newly created subsidiary, Asegua Therapeutics. Gilead is launching these authorized generics more than a decade before the expiration of the patents for these drugs.

An authorized generic drug is an approved brand name drug that is marketed without the brand name on its label. It is the exact same drug product as the branded product. “We made this unusual decision because we believe that it is the fastest way to lower list prices for our HCV cures without significant disruption to the healthcare system and our business, as a bridge to longer term solutions aimed at reducing patients’ out-of-pocket medication costs, improving access for Medicaid patients and providing greater pricing transparency,” Gilead Chief Executive Officer John Milligan said in a September 24, 2018 company statement.

Gilead’s authorized generics will launch at a list price of $24,000 for the most common course of therapy and will be available in January 2019. This list price represents a $50,760 reduction off the list price of Epclusa. Since the launch of Sovaldi (sofosbuvir), Gilead’s first HCV medication in 2013, the average price paid for each bottle of medicine in the US has decreased by more than 60% off of the public list prices, across health insurers and government payers, according to information from Gilead.

Gilead says that the authorized generics are priced to more closely reflect the discounts that health insurers and government payers receive. Insurers will have the choice of offering either the authorized generics or the branded medications for both Epclusa and Harvoni. In the Medicare Part D setting, Gilead says the authorized generics could save patients up to $2,500 in out-of-pocket costs per course of therapy. The authorized generics will also offer savings to state-managed Medicaid plans that do not currently benefit from negotiated rebates.

 “Unfortunately, the US healthcare system is not structured to easily absorb the up-front cost of a one-time cure, even if it results in significant savings over a patient’s lifetime,” Milligan explained in his statement. “Further, our country’s complex drug supply chain means that a drug’s list price does not always fully reflect the price paid by insurers – let alone a patient’s out-of-pocket cost.”

Gilead has been facing declining sales in its HCV product franchise. In 2017, Harvoni had sales of $4.37 billion, down from 2016 sales of $9.08 billion, and Sovaldi had 2017 sales of $964 million, down from 2016 sales of $4.0 billion. The downward track continued in the first half of 2018. Combined sales of Epclusa, Harvoni,  Sovaldi, and Vosevi (sofosbuvir 400 mg/velpatasvir 100 mg/voxilaprevir 100 mg), the company’s other HCV product, were $1.0 billion for the second quarter of 2018 compared to $2.9 billion for the same period in 2017.

Source: Gilead Sciences (announcement of plan) and Gilead Sciences (president’s comments)