CVS Health, which operates the largest U.S. pharmacy benefit manager, announced it will not add Gilead Sciences' new HIV prevention drug Yeztugo to its commercial plans, despite the medication's demonstrated 99.9% effectiveness in preventing HIV infection. The decision represents a significant setback for a drug that AIDS activists and researchers have hailed as potentially transformative in combating the decades-long HIV epidemic.
Pricing Concerns Drive Coverage Decision
CVS based its decision on clinical, financial, and regulatory factors, according to spokesperson David Whitrap. The company specifically cited Yeztugo's $28,000 annual list price as a key concern, with Whitrap stating it is "inappropriate for branded pharmaceutical manufacturers to try to manipulate preexisting guidelines with clinically similar products that are priced far higher than what's already on the market."
The pharmacy benefit manager also will not cover Yeztugo under its Affordable Care Act formularies, as its ACA preventive program follows recommendations and mandates from the U.S. Department of Health and Human Services. Current HIV prevention recommendations from the U.S. Preventive Services Task Force include only three older drugs: daily PrEP pills Truvada (available as generic), Gilead's Descovy, and ViiV Healthcare's bimonthly shot Apretude.
Industry Impact and Activist Response
The decision by CVS carries significant weight in the pharmaceutical industry, as the three largest pharmacy benefit managers - CVS Caremark, UnitedHealth Group's OptumRX, and Cigna's Express Scripts - control approximately 70% of specialty drug prescriptions in the United States. OptumRX indicated Yeztugo will be reviewed for coverage in the coming weeks, while Express Scripts did not respond to requests for comment.
Mitchell Warren, executive director of the AIDS nonprofit AVAC, called CVS's decision "a grave disappointment and frankly a missed opportunity." He emphasized that the decision "does reflect a price that is too high and a U.S. pharmaceutical pricing structure that is frankly not sustainable."
Clinical Significance and Market Potential
Yeztugo, approved in June for people at high risk of HIV, demonstrated nearly 100% effectiveness at preventing infection in large clinical trials. The twice-yearly injection has fueled fresh optimism about limiting the spread of HIV, which continues to infect 1.3 million people annually according to World Health Organization estimates. The epidemic has killed more than 42 million people over its 44-year history.
AIDS activists and researchers view Yeztugo as potentially transformative in ending the HIV epidemic, particularly given its convenience advantage over daily oral medications. The drug offers six months of protection with each injection, representing the first and only FDA-approved HIV prevention option with this extended duration.
Gilead's Coverage Strategy
Despite the CVS setback, Gilead maintains confidence in its coverage strategy. The company stated it is "extremely pleased" with how negotiations are proceeding with payers and remains on track to secure 75% U.S. insurer coverage of Yeztugo by year-end and 90% coverage by June 2026.
U.S. government healthcare programs, including the Veterans Administration and Medicare for people over age 65, have already added Yeztugo to their coverage lists. Several state-run Medicaid plans, including California and New York, are also covering the drug.
Economic Considerations
Gilead CEO Daniel O'Day has emphasized the economic argument for HIV prevention, noting that the lifetime cost of treating an HIV patient can exceed $1 million, making preventive treatment cost-effective despite the upfront expense. However, O'Day has also criticized the current pharmaceutical distribution system, stating that half of every dollar spent on medicines in the U.S. goes to pharmacy benefit managers and other entities that do not manufacture drugs.
Regulatory Landscape
Some analysts have raised concerns about potential changes to HIV prevention coverage recommendations under the incoming administration. Medical groups have expressed alarm about reports that Robert F. Kennedy Jr. could replace members of the U.S. Preventive Services Task Force, which reviews evidence and recommends preventive services that insurers must cover without patient cost-sharing.
The Supreme Court recently affirmed broad HHS authority over the USPSTF, which could affect coverage prospects while Kennedy leads the agency. This regulatory uncertainty adds another layer of complexity to Yeztugo's market access challenges.
Market Analyst Perspectives
RBC Capital Markets analyst Brian Abrahams suggests CVS's decision could reflect broader conversations with other insurers and expects some initial back-and-forth during the drug's early launch phase. He anticipates doctors may lean on generic Truvada and insurers may include "moderate access hurdles" for both new Yeztugo starts and patients switching to the twice-yearly shot.
Abrahams predicts $112 million in sales this year for Yeztugo, including approximately $900 million from the U.S. market, though access challenges could impact medium- to longer-term growth prospects and efforts to curb the HIV epidemic.
