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Study Predicts New Hepatitis C Drugs Will Place Financial Strain on Health Care System

Costs are ‘unsustainable,’ authors say

The cost of treating people infected with the hepatitis C virus (HCV) with newly approved therapies will likely place a tremendous economic burden on the country’s health care system. This prediction comes from a cost-effectiveness analysis led by researchers at the MD Anderson Cancer Center in Houston, Texas.

The findings, reported in the March 17 issue of the Annals of Internal Medicine, predict that the cost of providing patients their daily regimens could total $90 billion over 5 years.

Study leader Jagpreet Chhatwal, PhD, reported that an oral fixed-dose combination of ledipasvir and sofosbuvir (Harvoni, Gilead Sciences) recently approved by the FDA to treat hepatitis C is cost-effective compared with the former standard of care. The budget needed to treat all diagnosed patients, however, is unsustainable, he said.

More than two million people are infected with HCV, which is transmitted through blood-to-blood contact.

In recent years, management of the disease has come to a crossroads. In 2012, the Centers for Disease Control and Prevention and the U.S. Preventive Services Task Force both recommended a one-time hepatitis C screening for baby boomers (people born between 1946 and 1964). Two years later, the FDA approved Harvoni. While the use of this drug leads to improved outcomes, it comes at a staggering price to payers –– as much as $1,125 per day, Chhatwal said.

“We have millions of people who need treatment for hepatitis C, and payers obviously don’t have the budget to cover this tremendous expense,” Chhatwal remarked. “As a result, physicians have to prioritize the new drugs to the sickest of patients, and several payers have added restrictions that only those with the most advanced disease receive treatment.”

For the study, Chhatwal and his colleagues used a simulation model to evaluate the cost-effectiveness and budgetary effects of treatment with sofosbuvir and ledipasvir. Their model allowed them to conduct a cost analysis involving patients with four major HCV genotypes.

The researchers found that the new therapies would reduce the clinical burden of the disease. They determined that the newer, more expensive medications would be most beneficial for select groups of patients: those with advanced disease, those with genotype-1 HCV, and those who are younger.

The study was finalized before FDA approval of AbbVie’s Viekira Pak (ombitasvir, paritaprevir, and ritonavir tablets; dasbuvir tablets) and before Gilead’s announcement that the cost of sofosbuvir (Sovaldi) would be discounted up to 46% on average. In a subsequent analysis using older discounts for 2014, and then applying the 46% discount for 2015 onward, Chhatwal predicts that the budget needed would be $90 billion over 5 years. Compared with older drugs, the new therapies would cost an additional $20 billion, with $16 billion in cost offsets.

“Our analysis clearly does not support an assertion that the new treatments will save health care money using the drug discounts given in 2014,” Chhatwal says. “However, competition from AbbVie has recently brought down drug costs, which may change the outlook.”

“While most developed countries factor in treatment cost before approving a drug, U.S. law prohibits considering such costs. Therefore, patients almost always end up paying more for the drugs that were developed in the U.S.,” Chhatwal explains. “Considering the law also prohibits Medicare from negotiating drug pricing, the new treatment cost could strain the budget of the Centers for Medicare and Medicaid Services.”

“Economics need to play an important part of improving the health care system,” Chhatwal said. “Hepatitis C presents an unusual case where we have cost-effective therapeutic options that our health care system cannot afford. While lower drug prices will help, that’s not sufficient. Both the government and private insurers will need additional resources to effectively manage this epidemic.”

Senior author Michael Dunn, MD, of the University of Pittsburgh said: “We have an obligation to fully inform patients about the actual human value and real costs of these treatments. That knowledge is crucial for good decisions when such large resources are at stake.”

Sources: MD Anderson Cancer Center; March 16, 2015; and Annals of Internal Medicine; March 17, 2015.

 

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