FDA approves new hepatitis C drug. But will it bring down prices?

List price is about $30,000 less for a standard course of treatment than the current market leaders

FDA on Thursday approved Merck's new hepatitis C treatment, giving patients another highly effective—but highly expensive—way to treat the disease.

The agency approved the once-daily pill, called Zepatier, to treat patients with hepatitis C genotype 1—the most common variant in the United States—or genotype 4, which is rarer.

Twelve weeks after finishing treatment, between 94% and 97% of patients with genotype 1 and between 97% and 100% of patients with genotype 4 no longer had detectable levels of hepatitis C in their blood—suggesting they had been cured, FDA said.

Increasing competition

Zepatier joins other expensive but effective hepatitis C treatments from Gilead Sciences and AbbeVie. The list price for Zepatier will be $54,600 for a single 12-week course of treatment, which Merck said is roughly the net price of competing drugs after accounting for rebates and discounts.

But insurers will likely still push for discounts on Zepatier's price, the Associated Press reports.

Gilead's Sovaldi and Harvoni currently dominate the hepatitis C drug market, with $14.2 billion in sales during the first nine months of 2015. Those drugs' list prices are $84,000 and $94,500, respectively, for a typical course of treatment.

Many public and private payers have limited beneficiaries' access to Gilead's drugs to control costs. But the Associated Press reports that growing competition from Zepatier and other treatments "should crimp the sky-high prices."

NYT: Sovaldi is a budget nightmare for states

An estimated 3.2 million Americas are infected with hepatitis C. The virus does not initially produce symptoms but later can cause jaundice, fluid accumulation in the abdomen, bleeding, infections, and liver cancer (Loftus, Wall Street Journal, 1/28; AP/New York Times, 1/28; Beasley, Reuters, 1/28).

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