Gilead Needs Insurers to Cover New HIV Prevention Shot. CVS Isn’t Paying.

CVS Health’s pharmacy benefit manager is the largest in the U.S. by market share. (Brandon Bell / Getty Images))

Executives at Gilead Sciences, the biotech behind a long list of HIV treatments and preventative medicines, have spoken with great optimism in recent weeks about the prospects that insurers will cover Yeztugo, their new HIV prevention shot .

Those hopes were undermined late Wednesday. CVS Health said it wouldn’t include Yeztugo on the lists of drugs its pharmacy benefit manager will cover, either for its commercial plans or for insurance purchased on the Affordable Care Act exchanges.

In large trials, Yeztugo kept 99.9% of participants HIV negative. It is administered only twice each year, while older Gilead drugs for HIV prevention, a category known as PrEP, are pills that need to be taken daily.

Still, Yeztugo is expensive: Its list price is $28,218 a year in the U.S. Generic versions of Gilead’s PrEP pill Truvada are available for a fraction of that.

“Our formularies cover several PrEP options, both injectable and oral,” a CVS spokesman said in a statement to Barron’s. “As of this time, Yeztugo has not been added to our commercial template formularies, nor our ACA formularies.”

CVS Health’s pharmacy benefit manager is the largest in the U.S. by market share.

The companies that operate the other two largest PBMs, UnitedHealth Group and Cigna Group, didn’t immediately respond to requests for comment on their coverage plans for Yeztugo. Reuters first reported CVS’s decision late Wednesday.

Gilead shares were down 0.7% on Thursday following news that Gilead’s cancer-focused subsidiary Kite had cut a deal to buy a private cancer biotech called Interius BioTherapeutics for $350 million.

Asked about CVS’s decision on Yeztugo, a Gilead spokesperson told Barron’s that it remained on track to reach its access goals for the shot. “We’re extremely pleased with how our conversations with payers are going and believe we are well on our way to achieving 75% access for Yeztugo within six months of launch, and 90% within 12 months,” the spokesperson said.

Investors’ enthusiasm over the potential market for Yeztugo has helped boost shares of Gilead more than 50% over the past 12 months. Mizuho analyst Salim Syed forecasts that Yeztugo sales will climb to $7 billion a year by 2030, at which point the drug would account for 17% of the company’s revenue.

Though the shot’s efficacy is extraordinary, there is a cheap, generic, oral alternative in generic Truvada, which is made by multiple manufacturers. Yeztugo also competes with Apretude, a PreP shot made by ViiV Healthcare, an HIV drug company majority owned by GSK. Apretude, which is administered every other month, has a list price of $24,755 a year.

When Gilead reported its earnings this month, executives said efforts to win coverage for Yeztugo were going well. “We’re right in line with our expectations around the ongoing work with insurers on the access program,” CEO Daniel O’Day told Barron’s at the time. “The reaction we’re getting from payers is good. We’re still early days. We’re building it. But it’s very much in line with our expectations.”

Coverage rules most insurers must follow for preventative health services such as PreP are set by a committee called the U.S. Preventative Services Task Force. That group currently recommends HIV prevention drugs that had been available before Yeztugo’s approval, but it doesn’t yet recommend Yeztugo, meaning that insurers aren’t required to pay for it.

The Wall Street Journal reported in July that the U.S. health secretary, Robert F. Kennedy Jr., planned to remove all of the committee’s members, as he did previously with the members of the committee that advises the Centers for Disease Control and Prevention on vaccine recommendations. That has led to concern that Kennedy could push for a change to existing PrEP guidance from the task force, or that the task force might not recommend Yeztugo.

O’Day told Barron’s in early August that the company hadn’t heard anything officially from the Department of Health and Human Services. “We have constant dialogue with HHS,” he said. “And I can just tell you, from my own experience, that they are very impressed by the profile of Yeztugo.”

CVS, in its statement, took a swipe at Gilead’s pricing of the drug. “In increasingly crowded therapy classes of highly effective options, a generics-first policy remains the best approach for affordability and, by extension, patient outcomes,” the CVS spokesperson said.

Investors didn’t seem particularly rattled by CVS’s decision. The shares were still up about 27% so far this year as of late morning.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com