Sales of Gilead Sciences' drugs to treat hepatitis C reached $4.55 billion in the first quarter, far exceeding already lofty Wall Street expectations but likely to focus attention once again on the overall costs to the health care system of the medicines.
Gilead said Thursday that its new drug, Harvoni, had overall sales in the quarter of $3.58 billion, of which $3.02 billion was in the United States.
This was the first full quarter of sales for Harvoni, which was approved in October.
Sales of Sovaldi, the older hepatitis C drug, fell to $972 million in the quarter from $2.27 billion in the first quarter of 2014 because it was supplanted by Harvoni.
Combined, hepatitis C drug sales in the first quarter were double that of a year earlier.
The surging sales of the hepatitis C drugs have made Gilead one of the top earners in the pharmaceutical industry, with profits exceeding that of most older and bigger rivals. Earnings per share for the quarter doubled to $2.76 from the first quarter of last year.
The company Thursday said it expected total product sales – for hepatitis C, HIV and other diseases – of $28 to $29 billion this year, up from a projection of $26 billion to $27 billion it made in February.
The price of Gilead’s hepatitis C drugs – $1,000 a pill or more – and their popularity have strained the budgets of various insurers, state Medicaid programs and prison systems, leading them to impose restrictions on which patients can be treated.
The IMS Institute for Healthcare Informatics reported recently that growth in US spending on prescription drugs grew 13.1 per cent in 2014, to $373.9 billion, the fastest annual growth since 2001, driven in part by the hepatitis C drugs.
Gilead’s drugs have become Exhibit A for those calling for drug prices to be restrained, or at least explained. Bills have been introduced in at least five state legislatures that would require companies to disclose their costs for developing expensive drugs. The industry opposes the legislation.
Sales of Harvoni in the first quarter dwarfed those of its direct competitor, Viekira Pak from AbbVie, which were $231 million overall, with $138 million of that in the United States.
The sales were relatively low even though Express Scripts, the nation's largest pharmacy benefits manager, has made Viekira Pak the exclusive choice over Harvoni for many of its clients. Gilead has fought back by offering discounts to win exclusive status from some other insurers and pharmacy benefit managers.
The extent of the discounting, greater than many analysts had anticipated, has put pressure on Gilead’s shares.
Many analysts and investors are already looking past the company’s huge success in hepatitis C and asking, “What’s next?” There is speculation that Gilead will use the huge cash hoard it is building from Sovaldi and Harvoni to buy other companies.
John Milligan, Gilead's chief operating officer, told analysts Thursday that the company was "open to suggestions'' for deals but wanted to stick to therapeutic areas the company was already in. – Copyright New YorkTimes 2015
