[As a reminder, AbbVie announced a list price of about $83,300 for a standard course of Viekira Pak after the product was approved Friday, but the drug maker is providing a discount to Express Scripts in order to secure favorable coverage. Neither company has revealed the discount and declined to discuss details, although Porges writes it is in the neighborhood of 40%].
Thus, on the loss of $3.2B in revenue, GILD lost about $23B in MC or about 7x Rev lost.
The market is telling us that far more than $3.2B will be lost (of course the market may be wrong). What type of competition is next? Deals with CVS etal? The lack of increase in the ABBV price is saying that the overall market has decreased significantly.
Everyone "knew" that the net price was going to be under the gross price, but the net price may be far lower than previously thought and therefor the overall market may be much lower than had been assumed - could be a $100B reduction if there is really going to be price competition. When price competition really starts, it could be a totally different result - especially when we are talking about a cure and therefor a limited market in total - normal game theory may not apply. Clearly that is what the payers (including state medicaid, prisons, VA, etc) would love to see. It may what our society should have or at least want. I think that we live in interesting times. Just wish it was happening to high priced cancer drugs that provide little benefit, not HCV drugs.
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