CVS Health Inc. (CVS  ) said it will not add Gilead Sciences Inc.'s (GILD  ) new HIV prevention drug Yeztugo to its commercial plans.In June, the U.S. Food and Drug Administration (FDA) approved Gilead Sciences' Yeztugo (lenacapavir) as pre-exposure prophylaxis (PrEP) to reduce the risk of sexually acquired HIV in adults and adolescents weighing at least 35kg, making it the first and only twice-yearly option available in the U.S. for people who need or want PrEP.

The company also confirmed the drug will not be included in its Affordable Care Act formularies, since its preventive program follows mandates from the U.S. Department of Health and Human Services (HHS).

CVS based the decision on clinical, financial, and regulatory factors, spokesperson David Whitrap told Reuters in an email.

Current HIV prevention recommendations from the U.S. Preventive Services Task Force, which HHS supports, include only three established options: generic Truvada, Gilead's Descovy, and Pfizer Inc. (PFE  )/GSK Plc (GSK  )-backed ViiV Healthcare's injectable Apretude.The panel evaluates research and public input to determine which preventive services insurers must cover without cost-sharing.

Yeztugo, a twice-yearly injection, carries a U.S. list price exceeding $28,000 annually. CVS' stance has sparked criticism from HIV advocates.

Mitchell Warren, executive director of the AIDS nonprofit AVAC, called the move "a grave disappointment and frankly a missed opportunity," while pointing to the broader problem of unsustainable U.S. drug pricing.Gilead, however, expressed confidence in Yeztugo's adoption. The company said most insurers continue to cover HIV prevention products without cost barriers and projected 75% U.S. insurer coverage of the new drug by the end of 2025, with expectations to reach 90% by mid-2026.

CEO Daniel O'Day has emphasized that preventive treatment remains cost-effective given that the lifetime cost of managing an HIV infection can surpass $1 million.According to a Needham analyst, the physician survey has increased confidence in Yeztugo and could be a multi-billion dollar contributor to the top line over the next several years.The dispute comes as CVS faces heightened scrutiny over its business practices.

On Tuesday, a federal judge ordered the company's Caremark unit to pay nearly $290 million in damages and penalties for overcharging Medicare.

Judge Mitchell Goldberg tripled his earlier damages ruling under the False Claims Act and imposed additional fines, citing evidence that CVS' conduct was financially driven. The company plans to appeal.That penalty follows a separate decision last month, when another federal judge ordered CVS' Omnicare unit to pay nearly $949 million in a whistleblower case involving fraudulent billing. CVS is also appealing that judgment.

Price Action: GILD stock is trading lower by 2.71% to $115.51 premarket at last check Thursday, and CVS stock is down 0.23% at $70.65.