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Launching A Specialty-Care Blockbuster Franchise in Hepatitis C:

How Sovaldi & Harvoni Rewrote New Product Launch History

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Table of Contents Playbook of a Blockbuster: Key Insights from Sovaldi & Harvoni’s Launch Year

Success Birth of A Specialty Medicine Blockbuster -The First Oral Cure for Hepatitis Virus C

(HCV) Having The Insight & Expertise To Envision Transforming HCV Treatment Paradigm The Seeds of Success: Sovaldi Method of Action Moved Therapy From Treatment to

Cure The Seeds of Success: Epidemiology of Hepatitis C Created A Tsunami of Global

Unmet Need Market Entry History: The Back Story of The New Blockbuster Model Sovaldi Launches Like A Rocket Ship Other Noteworthy Market-Entry Tactics and Practices Pricing New Therapies Offers Multiple Risk Frontiers Public Reaction Ranged From Jubilation To Outrage The Global Launch & Pricing Strategy Divided The World Into Key Regions

Payers Crafted Different Strategies Both To Access The New Therapy & Manage Its

High Price Where Blockbusters Grow, Patent Challengers Quickly Spring up By Its First “Birthday” Gilead’s HVC Franchise Had Rewritten Biopharma Launch

History – But Still Faced Many Challenges Learn More About Best Practices, LLC

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Image Source: The Scripps Research Institute http://www.scripps.edu/news/press/images/group_images/law_wilson_ward_kong/e2_image.jpg

HEPATITIS C’S E2 PROTEIN

Key Practice Insights & Lessons Learned from Gilead’s Launch Success With Sovaldi & Harvoni

Target Patient Population: Gilead benefitted from a “triple dose” of good fortune: (1) a large patient population, (2) many diagnosed but untreated patients, and (3) a market eager for better treatments.Patient Support: Patient support is instru-mental at launch for expensive treatments. Gilead made superior patient support a cornerstone of launch and market access.Outcomes: Gilead demonstrated superior outcomes using a clear marker. Cannibalization: Embrace “planned obsolescence” of 1st-generation product to ensure sustained market leadership.Price Leadership: Gilead assumed leadership in discounting to hold volume – inside and outside the U.S. Market.

Global Epidemic: The market dynamics of high-volume, global health epidemics are unique -- and became part of Sovaldi and Harvoni’s triumphs and tribulations.Third Generation Treatment: Three decades of HCV treatments helped educate the market for Sovaldi – making global patient and payer constituents both appreciative and more militant.Breakthrough Therapy: Sovaldi was a true breakthrough offering near-perfect cure rates without difficult side effects.Launch Tsunami: Sovaldi rewrote pharma launch history: it doubled the sales of the previous full-year launch record in its first quarter – reflecting triple power of its high price, large target market, and pent up demand.

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This History of Sofosbuvir’s Development & March Into History Is An Instructive Lesson for Pharmaceutical Marketers

~2008 Sovaldi Polymer (PSI-

7977) Discovered

2009-10 Sovaldi (PSI- 7977)

Developed by Pharmasset

2010-11 Sovaldi’s (PSI- 7977)

Method of Action Refined

2010-11 Sovaldi (PSI- 7977) Shows

Extraordinary Results in Phase 2b Trials, Granted Fast Track Designation

by FDA

2011-12 Gilead Acquires

Pharmasset

2013 FDA Approves Sovaldi for treatment of Chronic Hepatitis

C

2014 Sovaldi Breaks all Launch

Records out of History Books Four

Months Post Launch

“Sovaldi selling way beyond our expectations. The initial prescription data are so massively outperforming even the biggest weeks Incivek ever had, we believe any reasonable comparison

between the two drugs would indicate that U.S. sales in 2014, alone, are going to exceed $5 billion.” -- Brian Skorney, Analyst, Baird

Source: http://www.gurufocus.com/news/256859/competition-from-abbvie-will-not-hurt-gilead-sciences-

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“This leaves us optimistic about the opportunity that lies ahead. In fact, with an estimated 1.7 million diagnosed patients in the U.S. and around 400,000 under treated care, we have to take just a small fraction of those who can benefit from treatments in the future.”

-- Paul Carter - EVP, Commercial Operations, Gilead Science

Sovaldi’s Initial Target Market In U.S. Consisted Of 1.3 Million Patients Who Were Diagnosed But Not Under Active Care

Not Di-agnosed;

59%

Diag-nosed;

41%

Diagnosed & Under Care;

23%

Diagnosed But Not Under

Care; 77%

4.1 Million Total Hepatitis C Patients in the U.S.

In the U.S. Gilead aimed initially to target patients who are already diagnosed but not under treatment for their disease.

Sovaldi Target

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HCV Patient Segments Have Multiple Faces Based On Various Factors

By Genotype By Disease Progression

By Dosing & Treatment Regimen

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Sovaldi’s ROI At Launch Was Historic

Gilead Invested Around $150 Million to Support

Ongoing Sovaldi Launch in 1Q 2014

Gilead’s Sovaldi Sales Totaled $ 2.3 Billion for 1Q 2014 – its 1st Q In-Market

15 Times Return

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“Our U.S. patient assistance program for Sovaldi, Support Path, has been very active since launch. This program helps patients navigate benefits coverage, as well as provide assistance where allowed with copays and foundation grants. We anticipate that 30% to 50% of commercial patients will utilize our

copay assistance program. ”-- Kevin Young, EVP, Commercial Operations

The Support Path provides Patients with:

• Treatment Information• Action Planning Tools to help manage

treatment• Tips to manage stress and cope with

your emotions• Advice to help you work well with your

healthcare team

Gilead Also Launched Its Online Patient Support Program – Called “Support Path” – With Entry into the U.S. Marketplace

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Sovaldi Sought A Significant Price Premium to Competitors

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Series3; $2

$4

$6

$8

1st Generation Treatment

Even though Sovaldi was not a first in class drug

Gilead Priced Sovaldi much higher as compared to

competitors. In fact, it is around 300% higher than 1st generation treatment and

30% higher than latest approved Olysio by J&J

“I used to have an easy argument that treating hepatitis C was cheaper than paying for a liver transplant or liver cancer,”…

“But it’s getting a little closer.”-- Jonathan Fenkel, Director of Jefferson University Hospitals’

Hepatitis C Center in Philadelphia

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Gilead Sought To Craft A Global Pricing Strategy That Reflects Each Country And Its Marketplace… USA: $84,000

UK: $57,000

France: $76,000

Germany: $66,000

India: $900

‘‘Gilead’s global pricing model is based on a country’s ability to pay,”

-- Gregg Alton, Executive Vice President of Corporate and Medical Affairs for Gilead

“The federal government is going to have to step in and say there’s a concern about the public welfare, and we can’t allow companies to take advantage like this,”…. “Is what they’re charging really appropriate?”

J. Mario Molina, CEO, Molina Healthcare Inc. (MOH)

Source: http://www.bloomberg.com/news/2014-03-05/hepatitis-c-drug-price-limiting-state-medicaid-approvals.html

Egypt: $900

Highest Cost

High-Medium Cost

Lowest Cost

Lowest Cost

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Payers Used Multiple Strategies To Combat High Prices For Sovaldi and Its Fixed Dose Combination Formulation Harvoni

Public relations campaigns,

prior authorization

programs

Influence clinical guidelines to

support tiering and stage gates so only

sickest get the medicines

Shame Manufacturers

Negotiate with other competitor

drugs about tiering Sovaldi if they come

out with less expensive drugs

Demanding health

outcomes to prove efficacy

Organize coordinated protests to pressurize

manufacturerWait & watch

Conduct cost benefit

analysis

Accept Sovaldi

http://www.uhcpharmacyinfocus.com/article/hepatitis-c-big-changes-coming-soon-2

Create Deals To Offer Plan

Exclusivity in Exchange for

Discounts

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