Gotta say, didn’t see this coming. Recently, Gilead announced “plans to launch authorized generic versions of Epclusa and Harvoni, Gilead’s leading treatments for chronic hepatitis C virus (HCV), in the US, through a newly created subsidiary, Asegua Therapeutics. The authorized generics will launch at a list price of $24,000 for the most common course of therapy and will be available in Jan 2019.” Wait a minute. The patents for these products do not expire for another 10 years. What gives? According to Gilead, “due to the complexity and structure of the US healthcare system, discounts provided by Gilead may not always translate into lower costs for patients.” Take that US healthcare system. That said, we guess Gilead had to try something as they have seen Hep C product sales drop from ~$19B in 2015 to a 2018 estimate of ~$4B. Ouch.
Let this be a lesson to us all. If you do your job too well, you won’t be needed anymore. Gilead has cured a lot of their target market. Combine that with the goldrush mentality surrounding the hep C marketplace and you have analysts forecasting a decline in quarterly sales from $2B in Q3 to $1.36B in Q4. Sure, InsightCity would probably be content to generate that kind of quarterly cheddar, but at that rate of decline, analysts are suggesting 2018 hep C sales could fall to approximately $4.5B, half what the company will have seen in 2017. (For perspective, if InsightCity revenue were cut in half it would still be approximately $0 USD, per quarter). But don’t forget, Gilead is sleeping on stacks of cash and they’ve been shopping.
Specialty pharmaceutical products are doing quite well these days and many have progressed in their life cycle to the point where they are obtaining approvals for new indications. See here for a 2017 list. If you look about half way down the list you will see Sovaldi and Harvoni (both Hep C medications from Gilead). FYI, sales of these two products were ~$14B (with a B) in 2016. As the Church Lady would say, “Isn’t that special?” (Side note: it doesn’t hurt having the CDC help your marketing efforts.) There could be a trend emerging that boosts recommended testing for various conditions. By programming alerts into EMR systems, researchers found hepatitis C virus (HCV) screening rates jumped five-fold. Maybe soon we will see pharma companies helping EMR companies program alerts into their systems.