A newly published cost-effectiveness study is questioning how much more payers should be willing to pay for a Gilead Sciences drug the Food and Drug Administration just approved for preventing HIV after an older drug goes generic. Its conclusion: The new drug is only worth a few hundred dollars more per year.
The study compared Gilead’s Descovy (tenofovir alefenamide, emtricitabine), which the FDA approved for pre-exposure prophylaxis (PrEP) in October, against Truvada (tenofovir disoproxil fumarate, emtricitabine), which is made by the same company but will become available as a generic in September. It was conducted by researchers at Massachusetts General Hospital and other institutions and published Monday in the journal Annals of Internal Medicine.
Foster City, California-based Gilead did not respond to a request for comment.
The purpose of the study was to estimate how much Descovy would provide clinical benefit and economic savings relative to Truvada and the highest price payers should be willing to pay for the newer drug compared with generic versions of the older one. The researchers reviewed published literature on Truvada’s safety, as well as cost and quality-of-life effects of bone fractures and end-stage renal disease to determine the highest price payers should pay for Descovy versus generic versions of Truvada.
Both drugs currently have the same wholesale acquisition costs, and the researchers cited Descovy’s Federal Supply Schedule price of $16,600 per year. But Truvada generics – which are expected to become available starting in September – will likely see significant discounts, and the researchers assumed a reduction in price by a “modest” 50%, meaning the generic’s price would go down to $8,300 per year. Descovy’s approval for PrEP was based on its having equivalent efficacy to Truvada in preventing HIV, but without Truvada’s slightly elevated risk of reduced bone density and kidney toxicity. However, experts have said Truvada is overall well-tolerated.
Over a five-year time horizon, the researchers determined that among 123,610 men who have sex with men, Descovy would yield 2,101 fewer fractures and 25 fewer cases of end-stage renal disease, with each quality-adjusted life year – or QALY, a cost-effectiveness measure defined as a year of perfect health – coming in at $7 million. Given generic Truvada’s lower cost and U.S. society’s willingness to pay up to $100,000 per QALY, the maximum fair price for Descovy would be only $370 more than that of the Truvada generic, or $8,670.
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