New HCV Drugs Cost-effective but Costly: Now What?

Lara C. Pullen, PhD

August 10, 2015

The new generation of hepatitis C virus (HCV) drugs save lives. They are also enormously expensive, which leaves the healthcare system struggling with questions about who should get the drugs and who should pick up the hefty tab.

"We know that curing hepatitis C at any stage improves 5-year survival," emphasized David Bernstein, MD, chief of the Division of Hepatology in the North Shore LIJ Health System in Manhasset, New York, in an interview with Medscape Medical News.

Some, but not all, insurers have decided it is a cost they are willing to bear. "All of the healthcare systems that are closed have decided they are willing to pay," Dr Bernstein explained.

In contrast, insurers whose patient population is less stable, with individuals likely to switch either to Medicare coverage or another private insurer, have been reluctant to pay a high price for a cure that would only pay off over the lifetime of the patient. "And that is the crux of the problem," Dr Bernstein concluded, adding, "Eventually people come to Medicare or Medicaid, which pays. This means we all pay, which doesn't seem right."

How to solve that dilemma has been the topic of debate and cost-effectiveness studies. Now several medical associations are weighing in.

Cost-effectiveness Guidelines

Whereas the American College of Gastroenterology states they do not have a plan to update HCV guidelines, the American Association for the Study of Liver Diseases (AASLD), in collaboration with the Infectious Diseases Society-USA and the International Antiviral Society-USA, has decided to update their HCV treatment guidelines by adding a section on cost-effectiveness of treatment.

The report is still in its draft form, and an AASLD spokesperson says they do not yet have a firm publication date. A press release describing the effort, however, makes it clear the new document will not dictate to physicians how to treat patients, but will inform physicians on the economics of treatment of HCV.

Perhaps more important, the new guidelines will also set out the cost-effectiveness data clearly for third-party payers, who set policies based on the best medical practices identified in such documents.

In fact, the goal of the new cost-effectiveness guidelines may be to get all insurance companies to step up and play their part. Thus, the associations' effort may change the reimbursement landscape for HCV treatment.

New Drugs Are Cost-effective

Several members of the association's writing committee declined to be interviewed for this story; however, Benjamin Linus, MD, from Boston Medical Center in Massachusetts, and a member of the writing committee, previously told Bloomberg News that the drugs are clearly cost-effective.

As previously reported by Medscape Medical News, two studies published in March in the Annals of Internal Medicine demonstrated that the new drugs are cost-effective for most patients. For example, in one of those articles, the investigators found that the new treatments were cost-effective in 83% of treatment-naive patients and 81% of patients who have had prior treatment.

However, the authors of one of the papers, Jagpreet Chhatwal, PhD, from the University of Texas M.D. Anderson Cancer Center in Houston, and colleagues also note that the new treatments will cost private insurers and the government $136 billion dollars over the next 5 years. This could be equivalent of 10% of prescription health spending each year.

Paying this bill will require either more financial resources or the prioritization of patients with HCV over other patients. And the problem becomes even more significant when you consider the size of the patient population.

The Centers for Disease Control and Prevention currently estimates that there are 3 million individuals chronically infected with HCV in the United States. Many of these individuals do not know they are infected.

Dr Bernstein acknowledges that the cost is high, but he explains that this is an upfront cost: Patients walk away from treatment cured and no longer needing HCV drugs or many other drugs used to treat comorbidities, such as cancer, which are associated with HCV infection.

Nevertheless, the expense is staggering, and the US government is bearing much of the burden. Medicaid pays for the drugs, but as reported by Medscape Medical News, restrictions vary tremendously across states' Medicaid fee-for-service programs.

In addition, the US Department of Veterans Affairs (VA) is now shifting patients to private providers to reduce costs. US Senator Bernie Sanders (I-VT) has gone so far as to ask the VA to break or override the patents to the expensive drugs, thereby dropping the cost of care. Although the move would be unusual, the cost of the drugs is currently more than the VA can bear.

Patient Program in Question

Gilead Sciences is the manufacturer of sofosbuvir (Sovaldi) and ledipasvir/sofosbuvir (Harvoni). Solvadi costs $1000 per day, and Harvoni costs $1125 per day. AbbVie, a competitor to Gilead, offers an equally costly rival HCV medicine.

For the most part, government programs and insurers have negotiated discounts with Gilead Sciences, such that they pay approximately half the list price for the medications. However, many insurers refuse to pay even the discounted rate.

In some cases, patients have been able to receive the drugs through the companies' patient assistance programs, such as Gilead's Support Path. But that option appears to be changing as well.

Initially, the company said the patient assistance program made the medications available to virtually all patients who had demonstrated need. However, as it became clear to payers that these costly drugs were available through this program, the insurance companies began to restrict access to their own patients. Insurers thus seemed to use Support Path as a loophole to allow patients to receive drugs while, at the same time, limiting their own costs, according to Gilead.

Saying it was trying to close that loophole, Gilead sent out a letter outlining new restrictions to enrolment in Support Path on July 1. The company said it will continue to supply no-cost medication to uninsured and uninsurable patients living in the United Sates, but will no longer pay when an insurer denies coverage.

"The changes to Gilead's [patient assistance program] are limited to those insured individuals whose health insurance provider has chosen to cover alternative products or only cover Gilead products for some patients. Support Path will no longer cover insured individuals in this situation, but will assist these patients with prior authorization and appeals support with payer denials. Gilead continues to negotiate directly with these insurers in an effort to remove barriers to accessing treatment with our medications, as we have successfully done with the majority of insurers across the country," elaborated Cara Miller of Gilead Sciences in an email to Medscape Medical News.

It is unclear how many patients will be affected by the restrictions. The letter states it will only be a "very small number of patients." Significantly, patients enrolled in a government healthcare prescription drug program such as Medicaid or Medicare Part D are no longer eligible.

Some have suggested that the letter restricting access to Support Path is a strategic move on Gilead's part to encourage patients to pressure payers for expanded access to the drugs. If it is a strategic move, it is one that places the patient in the center of a very large reimbursement conversation.

The letter sent to community partners includes the statement: "We believe these changes also will help increase access among those payers who continue to restrict access."

Of course, Gilead Sciences emphasizes that they want patients to get their drugs, and they are seeking to get the cost-effectiveness message out to physicians and insurers.

Waiting for Treatment

By including cost-effectiveness data in their clinical guidelines, AASLD appears to be championing the cause of patients. The inclusion of such an economic analysis is a first for the organization and appears to represent their contribution to the discussion. Many stakeholders are watching to see whether the new guidelines will be sufficient to push payers to actually pay.

Most physicians are less concerned about the economics and more concerned about their patients. "I think, as a physician, that every one of my patients should be treated because the cure rates are so high," stated Dr Bernstein emphatically.

Unfortunately, for many physicians and patients, that goal must be deferred until the payers determine who will pick up the tab.

Dr Bernstein receives research support from and is a consultant for AbbVie, Gilead, BMS, Janssen, and Merck.

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