HCV Drugs Cost-effective, but Who Should Get Them?

Marcia Frellick

March 17, 2015

Expensive new drugs for hepatitis C virus (HCV) are cost-effective for most patients, according to two new studies published in the March 17 issue of the Annals of Internal Medicine. However, the authors of one study add that paying for the drugs is unsustainable with current resources and growing demand.

The studies stir the debate about who should get the drugs, who should pay, and whether a traditional cost-effectiveness analysis is really the measure that should be used.

Estimates Reach $27 Billion per Year

The new treatments would cost private insurers and the government $136 billion during the next 5 years, according to an article by Jagpreet Chhatwal, PhD, from the Department of Health Services Research, University of Texas MD Anderson Cancer Center in Houston, and colleagues. That would be $65 billion more than the cost of treating the same number of patients with the older drugs. The authors calculate downstream cost offsets, including fewer HCV complications, at $16 billion.

The large number needing treatment could overwhelm the health system, with expenditures reaching an average of $27 billion per year, a figure equivalent to 10% of all US prescription drug spending in 2012.

To pay for the new regimens, the authors conclude, government and private insurers will need more financial resources or will need to prioritize patients for treatment.

Meanwhile, in a second article, Mehdi Najafzadeh, PhD, medical instructor at Brigham and Women's Hospital in Boston, Massachusetts, and colleagues conclude that from a societal perspective, the novel treatments for HCV are cost-effective compared with usual care for genotype 1, and probably genotype 3, but not genotype 2.

3 Million Chronically Infected

More than 3 million people are chronically infected with HCV in the United States, and most of them do not know it. Recent approval by the US Food and Drug Administration of three new drugs — sofosbuvir, a once-daily HV RNA polymerase inhibitor; simeprevir, a once-daily protease inhibitor; and sofosbuvir plus ledipasvir, the first oral combination therapy — marked a new era for treatment. Previous drugs were interferon-based, with high toxicity, and many patients could not tolerate them. Moreover, the new drugs come with sustained virologic response rates greater than 95% in most patients, and shorter treatments with fewer adverse effects.

However, the cost is troubling to many. Sofosbuvir is priced at $1000 per day, and the sofosbuvir–ledipasvir combination costs $1125 per day. The total cost of treatment can be as high as $150,000 per patient, even though Dr Chhatwal and colleagues say that the manufacturing cost for sofosbuvir is $200 for a 12-week treatment.

At a willingness-to-pay threshold of $100,000 per quality-adjusted life-year, sofosbuvir-based therapies were cost-effective in 83% of treatment-naive patients and 81% of patients who had had prior treatment, the authors found.

Rationing Already Underway

However, cost-effectiveness does not take into account budget constraints, so the question becomes who should get the drugs.

At least 35 states say only those who have advanced disease should get the new agents, and private payers require prior authorization before purchase.

Dr Chhatwal and colleagues raise the question of whether the threshold for whether a treatment is cost-effective should depend on the size of budgets and how many people have a disease (eg, lower thresholds for common diseases such as HCV and higher thresholds for rare diseases).

Cost-effectiveness considerations for HCV treatment also depend on type of insurance, they say.

"For private payers, which have a median length of patient enrollment of less than 10 years, sofosbuvir–ledipasvir may not be cost-effective. Therefore, a lower drug price may provide better value to private payers. Conversely, for Medicaid, Medicare, and the Veterans Health Administration, which have longer patient enrollment, sofosbuvir–ledipasvir may be cost-effective. Therefore, providing additional resources to these public programs for HCV treatment could provide good value for money."

Ethics May Be Context-Dependent

"In some sense, [rationing] is not entirely ethically unjustified from the perspective of healthcare justice," Leonard Fleck, PhD, professor at the Center for Ethics and Humanities in the Life Sciences at Michigan State University in East Lansing, told Medscape Medical News. If Medicaid, for instance, which has a relatively fixed budget, pays for the new HCV drugs, then someone with another disease may be denied care.

But there are ethical problems associated any time you choose one patient over another.

If patients are initially infected at 60 years or older, they most likely will die of something else, Dr Fleck said, because the disease develops over the course of 10 to 30 years. So some would argue the drugs should go to younger patients. "But again, that raises questions of healthcare justice, and you are in effect gambling with the lives of individuals who might well live long enough to suffer the effects of their [HCV]."

One possibility for saving money centers on use of the older interferon-based drugs, he said. Because some patients do well with them, and more than half of patients can tolerate them, should patients be required to try the less expensive drugs first?

"But the ethics issue there is that we would be imposing substantial avoidable harm on those patients who first had to endure a trial of current standard of care," he said.

A better answer is for drug companies to reduce price, he said. "It's really hard to justify the size of the profit."

Ethicist Wants Congressional Hearings on Drug Prices

Arthur Caplan, PhD, head of the Division of Medical Ethics at New York University, Langone Medical Center, New York City, agrees.

"We're talking about how to triage access as a way to cope with price. But that seems to me to be strikingly immoral. What we have to do is drive down the price," he told Medscape Medical News.

Dr Caplan, a Medscape advisory board member, wants to see congressional hearings, because currently prices are being negotiated only between manufacturers and payers.

"That doesn't mean the prices make any sense," he said.

Market factors should not get to determine who wants them badly enough to pay for them, he said. "We're not talking about Rogaine [McNeil] for baldness. This is life and death for them, and the sooner they get it, the better."

He acknowledged that part of high drug cost is to reward innovation, which has to be encouraged. However, he said, with the volume of the drugs needed through the US Department of Veterans Affairs and Medicare and Medicaid, the pressure should be there to demand a better price and more transparency.

"Before I'm ready to ration anybody, I want to know why the price is what it is," he said.

Several authors of the report by Dr Chhatwal and colleagues report support from and employment with CVS Health, which funded the study. Dr Chhatwal reports receiving personal fees from Merck & Co, Inc, and from Gilead Sciences outside the submitted work. The other authors, Dr Fleck, and Dr Caplan have disclosed no relevant financial relationships.

Ann Intern Med. 2015;162:397-419 Chhatwal study, Najafzadeh study

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