Even the wildest Gilead (NASDAQ:GILD) bulls seemed to acknowledge that the company was not going to grab and hold 100% share of the hepatitis C (HCV) market. Now the question seems to be shifting to just how much share rivals like AbbVie (NYSE:ABBV), Merck (NYSE:MRK), Bristol-Myers Squibb (NYSE:BMY), Johnson & Johnson, and others can credibly hope to gain.

Recent data presentations at EASL continue to support the notion that Gilead has the best regimen for treatment-naive patients with the most common HCV genotypes in North America and Western Europe. AbbVie and Merck are looking increasingly competitive in more challenging patients, though. What's more, Gilead's decision to pursue aggressive pricing for its regimen, and the resistance of groups like Express Scripts, raises the question of whether price may prove to be a competitive option.

Merck is definitely still in the game
Merck had already given investors some data from the phase 2 C-WORTHY study of the combination of MK-5172 and MK-8742. This once-daily single pill (without ribavirin) showed a 98% SVR12 in genotype-1, treatment-naive patients. That is a strong result that is certainly competitive with Gilead and AbbVie's combo therapies. The problem, though, is that the SVR8 was just 83% versus 94% for Gilead – arguing that Gilead may still be the treatment-of-choice for treatment-naive patients (although, of course, comparing between studies is dicey). It is definitely worth asking how much of a premium Gilead can really expect to charge for that four-week advantage, but that will have a lot to do with whether Merck and/or AbbVie are willing to compete on price to gain share.

More recently, Merck published additional data on the 5172/8742 combo in more complicated patients. In treatment-naive cirrhotic patients, the combo delivered a SVR4/8 of 97% (without ribavirin) and SVR12 of 90% with ribavirin. SVR12 in null patients (without ribavirin) was 91% and the SVR12 in patients with HCV/HIV co-infection was 90% without ribavirin.

It's a competitive world
Data from Gilead and AbbVie continue to show strong cure rates. These combos show 12-week cure rates for treatment-naive genotype-1 patients in the neighborhood of 99% without ribavirin. Cure rates for treatment-experienced and/or cirrhotic patients tend to be more in the low-to-mid 90%'s. The data from Bristol-Myers' combo hasn't been quite as exciting for the larger treatment-naive populations, but the data from studies in more complicated "niche" populations (cirrhotic, non-responder, IFN-ineligible/intolerant) has been pretty interesting.

Now the question starts to shift toward what will happen in the marketplace. Merck is probably about 18 months behind in its clinical development and that is not going to help its commercial efforts. Right now, though, there has been a lot of debate and controversy over Gilead's pricing for its HCV regimen, with Express Scripts perhaps among the most vocal in challenging Gilead's pricing.

The bottom line
If AbbVie and Merck decide to follow Gilead's lead on pricing, it is hard to see what entities like Express Scripts can really do about it. Refusing treatment is really not an option, particularly when considering the the long-term cost of HCV (cirrhosis, liver failure, etc.). On the other hand, one (or more) of these Gilead rivals may choose to price their regimen more competitively in the hopes of gaining share at/through PBMs like Express Scripts. Given that the cure rates are fairly similar (and the four-week advantage for Gilead in treatment-naive patients may not be an insurmountable advantage), it would seem that this would be a viable strategy for moving from a likely market share in the 15% range to maybe something closer to 20% to 25%.

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