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In an unusual move, Gilead Sciences said in September that it will sell generic versions of its own hepatitis C virus (HCV) drugs in the US through a subsidiary, Asegua Therapeutics. These ‘authorized generics’ will be on the market in January 2019, even though the patents on Gilead’s blockbuster HCV drugs Harvoni (ledipasvir/sofosbuvir) and Epclusa (sofosbuvir/velpatasvir) don’t begin to expire until 2028. And with generic versions priced at $24,000 for the most common courses of therapy, they will be substantially cheaper than Harvoni ($63,000) and Epclusa ($74,760). Those lower list prices, however, “more closely reflect the discounts that health insurers and government payers receive today,” according to Gilead. In short, Gilead’s generics aren’t actually necessarily cheaper than its existing brands, but the company is pulling aside the curtain that obscures the drugs’ discounts and rebates in a way that will allow some patients to potentially share in the savings enjoyed by insurance plans and the pharmacy benefit managers who negotiate on their behalf. Gilead estimates the new generics could save patients up to $2,500 per course of therapy. What about simply lowering Harvoni and Epclusa’s list prices? Gilead’s existing contracts with health insurers and laws that govern prices paid by the US Medicare and Medicaid programs prevent it from making drastic cuts. The newly minted generics, however, will not have new brand names and will be eligible to be substituted for Gilead’s brands at the pharmacy, subject to various state laws and payer contracts. The pharmacy benefit manager Express Scripts called Gilead’s move “a step in the right direction” and a “win for payers and patients.” Eventually, Gilead’s higher priced brands should be eclipsed entirely by the generics. Gilead’s generics are “a statement about the warped incentives in the drug channel system” in the US, says Adam Fein, president of Pembroke Consulting in Philadelphia—a system whereby payers may choose a higher priced product over a cheaper alternative because of the rebates they’ll receive. Fein says that while other companies could attempt to emulate Gilead’s authorized generics strategy, the HCV market has some unique dynamics that might limit the usefulness of such a move. For one, HCV is a very competitive market, in part because “the more successful you are at market-