> The thing is, that's not happening at all. Nearly all US insurers are covering the new therapies. There are a couple that are holding out and only doing individual approvals.
So what are all the news articles about? A problem that is only hypothetical? The reporters don't seem to have a hard time finding cases of Hepatitis C patients who have been denied:
Then there's the fact that AbbVie and Merck are coming into the market soon with their own Hepatitis C drugs that also have 90% cure rates. It seems hard to believe that either of these companies will come in significantly below the price of Sovaldi, but that's what the insurance companies are hoping for.
Your take is correct, there are some insurers playing hard ball and saying "no" to patients. A few state Medicaid plans are the best example.
I should have be clearer as I was referring to private insurers. Yes, a few of them (Express Scripts is one) are saying no, initially, but appeals are getting approved.
I actually work in the HCV field and saw some data the other day that showed the vast majority of plans are reimbursing for Sovaldi. It was pretty surprising to me.
And yes, we'll have to see what Abbvie and Merck do. Rumor is they won't be competing on price although the insurance companies are hoping they do.
> Then there's the fact that AbbVie and Merck are coming into the market soon with their own Hepatitis C drugs that also have 90% cure rates. It seems hard to believe that either of these companies will come in significantly below the price of Sovaldi, but that's what the insurance companies are hoping for.
Why? If you apply game theory, one of the three will try to defect and undercut the other two.
> Why? If you apply game theory, one of the three will try to defect and undercut the other two.
Because they're playing a repeating game. AbbVie and Merck are big pharma companies. They don't particularly want to get into a price war.
It would be different if a small biotech firm were coming in. They might not get a second shot at it for a long time, so they are much more likely to undercut on price.
Also, three is a low number. Defection is more likely when the number of players goes up.
Of course, they're not going to come in dollar-for-dollar identical to the pricing of Sovaldi and Harvoni. However, the insurance companies seem to be hoping for some really sharp drops in price, which are less likely.
So what are all the news articles about? A problem that is only hypothetical? The reporters don't seem to have a hard time finding cases of Hepatitis C patients who have been denied:
http://kaiserhealthnews.org/news/most-illinois-medicaid-pati...
http://www.npr.org/blogs/health/2014/10/28/359553282/insurer...
Then there's the fact that AbbVie and Merck are coming into the market soon with their own Hepatitis C drugs that also have 90% cure rates. It seems hard to believe that either of these companies will come in significantly below the price of Sovaldi, but that's what the insurance companies are hoping for.