Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

The already deeply strange world of U.S. drug pricing just got a little weirder.

Gilead became a pricing bogeyman a couple of years ago after setting list prices for new hepatitis C cures that equated to $1,000 a pill. On Tuesday, it got another drug, called Epclusa, approved by the FDA for all variants of the disease. But instead of charging an extra-premium price, Gilead listed the drug at $74,760 for a potentially curative 12-week course of treatment.

That's cheaper than hepatitis drug Sovaldi, for which Gilead charges $84,000 for a 12-week course. And it's less than Gilead's Harvoni, which can more rapidly cure the most common subtype of the disease, listed at $94,500.

Gilead's choice is, to put it mildly, not the usual thing. New drugs in a class tend to be priced the same as or higher than predecessors. This is a sign the industry is entering uncharted pricing waters. Politics and PR matter more now than they used to. And the old drug-price calculation -- based mainly on what the market could bear -- now has extra variables.

Gilead's shares jumped on the approval of a new hepatitis drug Epclusa and its unexpectedly low pricing.
Intraday times are displayed in ET.

Few know better than Gilead the extent to which drug pricing has been politicized and publicized. The company was not the first to stick a premium price tag on a drug. And its hepatitis drugs were exactly the sort of medicines that arguably should command high prices -- rapid cures for a deadly disease with previously inferior treatment options. But the combination of high price and population size (an estimated 4 million people in the U.S. have hepatitis C) sparked massive uproar, criticism, and congressional hearings. 

The prices of Sovaldi and Harvoni blindsided insurers, employers, and pharmacy benefit managers. According to PBM giant Express Scripts, U.S. drug spending increased by 13.1 percent in 2014, the year Sovaldi was approved. That drug was a major culprit. As soon as competition arrived, payers negotiated aggressively for big discounts. 

Gilead's Epclusa pricing can be seen as a response to those earlier experiences, and it's a strategically interesting one. If big discounts are inevitable, then why not incorporate some of them into the list price from the start?

Pharmaceutical companies gripe it's inaccurate to focus on list prices because they don't reflect what people pay after discounts. Gilead may be acknowledging this grousing is sort of futile -- nuanced discussion of payer discounting doesn't get you far when "$1,000 per life-saving pill" appears in flashing red lights. The industry's fanatical caginess about revealing discount data doesn't help sell its case, either. 

Epclusa's (relatively) low list price likely heads off a new round of public uproar and may help Gilead get on friendlier terms with payers. Gilead may be effectively pre-negotiating price cuts with payers; even with relatively small discounts it should be able to attract large patient volumes, according to an analysis by Bloomberg Intelligence's Asthika Goonewardene. 

There is a chance Gilead is leaving some money on the table, according to Goonewardene. Doctors had been using Sovaldi in combination with Bristol-Myers Squibb's Daklinza in one of the hepatitis subtypes Epclusa will treat. Epclusa is priced far below that combination; it's cheaper than it needed to be to compete in that market.

A current combination of drugs used to treat a subtype of hepatitis C costs far more than Gilead's new drug.
Source: Bloomberg Intelligence

But Merck recently set a lower-price precedent by charging $54,600 for its new hepatitis C drug, Zepatier. A high price for Gilead's new drug would have looked particularly bad in comparison. Gilead seems to think some combination of price-driven extra volume and reputational repair matters more than squeezing extra cash from an already dominant hepatitis franchise.

And given the pressures across the industry, don't expect Gilead to be the last company to choose this path.   

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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