Replies to post #177303 on Biotech Values

[jbog]

AbbVie’s 1Q call just ended, on which it reiterated that pricing is “NOT our strategy” in HCV. Our HCV thesis on pricing has been that AbbVie will list price at parity, and that initial discounting would be limited between two players. We do expect that gross-net will widen over time with additional market entrants, but we do not expect significant price erosion in the near to mid-term. Secondly, we’ve modelled the HCV as a long-lived market, peaking globally at $26bn in 2022. AbbVie also expects a “cadence” of treatment to draw out the market over the long term. In our view, AbbVie’s stance is consistent with our constructive view on HCV, and specifically addresses investor pushback on [Gilead Sciences].

It does show that discounting will become the norm.

[jq1234]

I don't think GILD's 1Q patient composition number reflects general US HCV population. It is going to or has to change as time goes on. Based on conservative estimate of 3.3m infected people in US in 2013, commercial is about the same size as VA and prison combined in 700s thousands. Medicare non-dual is only in 100s thousands, medicare-medicaid dual is twice as large while medicaid is about 3 times as large. The largest segment is uninsured, about 1/3 of total.