Guidelines Emphasize Cost-Effectiveness of HCV Drugs

Lara C. Pullen, PhD

August 26, 2015

The American Association for the Study of Liver Diseases and the Infectious Diseases Society of America have collaborated with the International Antiviral Society-USA to update several sections of their website devoted to the treatment of hepatitis C virus (HCV) infection. The update includes a new section that provides an overview of costs, reimbursement, and cost-effectiveness consideration for the HCV treatment regimens.

The guidance addresses the new direct-acting oral agents that were recently approved in the United States for the treatment of HCV infection. "This really is a miraculous development by the healthcare community," explained Henry Masur, MD, spokesperson of the Infectious Diseases Society of America, in an interview with Medscape Medical News. He added that the new drugs "are expensive, and there is no easy answer as to how to pay for them."

Approximately 3 to 4 million individuals in the United States are estimated to be chronically infected with HCV.

The new cost, reimbursement, and cost-effectiveness section of the guidelines was created in response to the challenge of restrictions on drug reimbursement. The section describes the role various stakeholders have in determining which treatment regimens are reimbursed. It is intended as "a start to an education" for practitioners, explained Dr Masur.

Paying for the Drugs

The cost to patients for the expensive drugs can vary greatly on the basis of their insurance plan. Negotiations of drug prices are almost always considered confidential business contracts.

The updated guideline states that, "the negotiated pricing and cost structure for pharmaceutical products in the United States are not transparent, and it is therefore difficult to estimate the true cost and cost-effectiveness of HCV drugs. Whatever the actual current cost of HCV [direct-acting oral agents], competition and negotiated pricing have not improved access to care for many persons with HCV infection and continue to limit the public health impact of these new therapies. Insurers, government, and pharmaceutical companies should work together to bring medication prices to the point where all of those in need of treatment are able to afford and readily access it."

The Stakeholders

Pharmaceutical companies set the wholesale acquisition cost of a drug, which serves as the drug's "sticker price." Pharmacy benefit managers (PBMs) may then negotiate contracts with pharmaceutical companies so that health insurance companies may pay a reduced price for the drug. PBMs may also negotiate contracts that include restrictions on who can be reimbursed for treatment.

The heterogeneous insurance plans that constitute Medicaid may also negotiate rebates with pharmaceutical companies either directly or via PBMs. In contrast, Medicare is prohibited by law from directly negotiating drug prices and must cover HCV drugs through Part D benefits.

The Federal Supply Schedule sets drug prices for a number of government agencies including the Veterans Health Administration, the Department of Veterans Affairs, federal prisons, and the Department of Defense.

Although federal prisons typically receive substantial discounts on drugs, state prisons and jails are typically excluded form Medicaid-related rebates, and thus often pay higher prices for the same drugs.

In addition to paying for the cost drugs, insurance companies, PBMs, and pharmaceutical companies pay specialty pharmacies dispensing fees as well as fees for adherence support, management of adverse effects, and outcomes measurements.

All of these organizations together determine the actual price paid for a drug, as well as who has access to treatment.

Dr Masur has disclosed no relevant financial relationships.

"HCV Guidance: Recommendations for Testing, Managing, and Treating Hepatitis C." American Association for the Study of Liver Diseases, Infectious Diseases Society of America, International Antiviral Society-USA. Published online August 20, 2015. Full text

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