In the last year, shares of Gilead Sciences (GILD) - Get Report are down 32%. With competition increasing for its hepatitis-C treatment, it is unlikely shareholders will see any relief.

Patients and doctors were outraged in 2013 when Gilead Sciences priced its breakthrough cure Sovaldi, for the treatment of hepatitis C, at $84,000 (or $1,000 per pill) for a 12-week regimen.

Within a year, the FDA approved the company's latest hep-C drug, Harvoni, at $94,000 ($1,125 per pill) for a 12-week treatment. Harvoni is only for the major subtype of hepatitis, called genotype 1, which generally accounts for 70% of the hep-C cases. Company officials argued Harvoni was actually less expensive because many patients could get away with just an 8-week regimen. An 8-week program generally costs $63,000. These medicines are typically taken with other drugs that can push the total cost of treatment over $120,000.

Because these medicines are considered a cure, many insurance companies and pharmacy benefit management companies reluctantly began to pay for the treatment of the most seriously ill patients. Since hep C can take 20 years to cause cirrhosis or liver cancer, many payers have refused treatment to patients without advanced liver damage. In countries like India, which controls the price of prescription drugs, the government has forced the company to license generic versions of these drugs, knocking the price down to as little as $4 a pill.

Despite its high price, within a year, Sovaldi reached sales of $6 billion, the record for the first-year sales of any drug. Ironically, the company's aggressive pricing strategy is backfiring. In the last three years, other drug makers have rushed in with lower priced drugs and have taken aim at Gilead's 85% market share.

Bristol-Meyers Squibb (BMY) - Get Report , AbbVie (ABBV) - Get Report and Merck (MRK) - Get Report all rushed into the market and are each having some measure of success.

Gilead reported second-quarter results last week, and sales of the company's hep-C franchise posted revenue of $4 billion. Investors were expecting sales of $4.1 billion. The miss was driven by lower-than-expected sales of Harvoni. In the quarter, Harvoni was beset by price erosion, a lower number of patient starts and shorter treatment durations. And to top it all off, the government of Japan forced the company to cut the price of Harvoni and Sovaldi by 32%.

Merck's recently approved medication, Zepatier, has a narrower label indication than Harvoni, but Merck is pricing the drug much lower (below $30,000) in an effort to compete on price. Zepatier hasn't been approved for patients with moderate-to-sever cirrhosis, but Harvoni's label was expanded last year to include those late stage patients that Zepatier is not approved for.

Many PBMs are in a pinch. PBMs like the lower price of Zepatier, but because of the restricted label have to buy Harvoni so they can cover their entire patient population and get the maximum volume discount.

Medicare Part D can take both drugs because Gilead is obliged to provide Medicare with the best price in offers anywhere in the market. Because Medicaid covers patients 65 years or older, it is believed to have the largest patient population. Medicare and Medicare are quickly becoming the largest payers of hepatitis C treatments.

As a result, investors have been watching the ratio between commercial payers and Medicare Part D carefully. Last quarter Gilead said the ratio dropped to 55% from 64% in the first quarter and 77% in the fourth quarter of last year. Many analysts believe by next year, Medicare and Medicaid will be the largest customers for hep-C drugs and the stickiness of the Gilead's pricing will collapse.

As pricing continues to fall, Gilead's total sales are expected to be down 6% this year to $30.8 billion and another 6% to 7% next year. Meanwhile the company is propping up earnings per share through share buybacks. Earnings are expected to be down about 3% this year and next. In the last year, the company bought back 12% of its shares outstanding. With sales under increasing pressure, there is no cure in sight for competition.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.