The price of DAAs poses a significant challenge to achieving the WHO goal of HCV elimination by 2030. Ranging from $417 to $1125 USD per day for 8–24 weeks, the high wholesale prices of these therapies are a primary barrier to their widespread adoption. Per pharmaceutical companies, the DAA prices are attributed to research and development costs. The wholesale acquisition cost of drugs is influenced by generics and market competition while the actual price consumers pay for the medications depends on a variety of factors including contracts, rebates and discounts negotiated between payers and pharmaceutical companies.[43,44] The recent introduction of DAAs to the market precludes generic options and competition that would benefit the payer and ultimately the patient. Healthcare systems would benefit by adopting purchasing models that encourage patient treatment while minimizing costs. Some of these financial models include value-based payment, financial incentives and subscription models.
Value Based Payment
Early and complete HCV treatment has the potential to drastically curb overall costs, in addition to improving quality of life. Compared with an untreated individual, curing a single HCV+ patient saves $15,907 USD per year with incrementally increased savings each subsequent year. This equates to an estimated annual $1.5 billion USD savings by providing curative treatment for all HCV+ patients in the US. This cost reduction is attributed to avoided hospitalizations, emergency department visits and prescription drug refills that significantly burden the individual, insurers and overall health system alike.
Currently, the responsibility rests on the patient to seek care for their commonly asymptomatic HCV infection. Shifting the reimbursement structure of HCV healthcare has the potential to fund sustainable health systems designed to optimize HCV linkage to care. A value-based payment programme tying provider reimbursement to patient health outcomes may provide financial incentives for programmes to adopt practices that improve patient retention. Care1st Health Plan Arizona and Maricopa Integrated Health Systems announced in 2019 is the first US Medicaid plan to offer bundled payments through a value-based HCV treatment agreement. The programme holds providers directly accountable for managing medication adherence and rewards maximal reimbursements for optimal patient outcomes. The programme's Community Connections Help Line connects members to social support resources and leverages an integrated health approach to address patients' various social determinants of health. This deviation from Arizona's fee-for-service model serves as an auspicious prototype for a novel, patient-centred and efficiency-focused approach to HCV treatment.
In the traditional per-prescription revenue model, pharmaceutical companies increase revenue by increasing drug prices. This inherently limits access to the drug, especially to patients served by US state Medicaid and prison systems.[47,48] This revenue model has left 85% of HCV patients in the US untreated. Creative financial strategies are essential to improve access to HCV treatment.
The revenue model for HCV shifted in 2015 when Australia purchased 5 years of unlimited DAAs for $1 billion Australian dollars (US$766 million). Modelling after the first 2 years of HCV therapy recipients in Australia, the country projected that over the course of the 5-year programme, it will treat over 104,000 patients at AU$9595 (US$7352) per patient compared to AU$16,260 (US$12,460) per patient without the lump-sum pricing. Through this plan, the Australian government will save an estimated AU$6.42 billion (US$4.92 billion).
In 2018, Oklahoma was the first state in the US to adopt a subscription model for purchasing medications. Oklahoma negotiated an unlimited supply of antipsychotic medications for a flat recurring fee, now termed the 'Netflix' subscription model. This landmark drug purchasing strategy used by Medicaid allowed drug manufacturers to bid for the rights to provide a drug within a state health market. By offering a lump sum payment to the winner(s) of the bid, pharmaceutical company revenues are decoupled from the price per pill. This strategy formed a national wave in the US with Michigan and Colorado obtaining US approval to engage in negotiations with drug manufacturers.
In 2019, Louisiana was the first US state to implement the model for HCV DAA therapies, with Washington following suit.[49,50] DAA manufacturers are incentivized to bid as the winner(s) become exempt from the Medicaid 'best price rule' which mandates suppliers to extend the lowest negotiated price with one buyer to all other states in the Medicaid programme.
In addition to the government reaping significant savings, suppliers also share the financial benefit. The 5-year contract serves as a guaranteed, fixed revenue to suppliers even as the price of DAAs erodes with an increasing number of manufacturers entering the market. Suppliers may also find comfort knowing that the lump-sum agreement does not pinpoint a per-unit price, preventing other countries from boxing suppliers into offering the same rate. In the end, suppliers benefit from a boost in public relations by addressing public health, while also decreasing economic risk through a steady and dependable cash flow.[47,49] A subscription model incentivizes payers and suppliers alike while helping guarantee patient access to HCV therapy.
J Viral Hepat. 2022;29(8):588-595. © 2022 Blackwell Publishing