ICYMI: Insurer: “Can drugs as expensive as these really be cost-effective? The answer is yes.”

ICYMI: Insurer: “Can drugs as expensive as these really be cost-effective? The answer is yes.”

06.25.14 | By Robert Zirkelbach

The focus in recent weeks on the cost of a new cure for Hepatitis C has largely ignored the long-term value it provides to patients and the health care system broadly, including helping to prevent expensive hospitalizations and costly medical procedures, such as liver transplants.

For example, an article from Optum Health, a subsidiary of insurer United Healthcare, said in reference to new treatments for Hepatitis C, “Can drugs as expensive as these really be cost-effective? The answer is yes.”  

“Without the new and pending wave of highly effective treatments, is was estimated that the cost to treat the currently infected group of Americans over their estimated survival span could reach $360 billion in today’s dollars. That translates into an annual health care cost as high as $9 billion for the affected U.S. population,” Optum wrote.  The article went on to say, “Because costs are driven largely by end-stage liver disease, liver transplants and cancer, total hepatitis C- related health care expenses can be expected to decrease over time as successfully treated patients avoid progressing to more severe forms of the disease. Based on this experience, it is certainly possible that the combination of higher cure rates and reduced side effects, combined with reduced treatment times may mean even greater cost-effectiveness in the future.” 

Moreover, Optum’s projections about the price of these new medicines, written prior to their release, contradict recent claims that the costs are more than forecast.

Yesterday’s story on the WSJ’s Pharmalot blog echoed these comments, saying, “there is another way to view the issue, which is that the cost of treating patients who may otherwise need countless physician visits, hospital care and a liver transplant can run higher. Consider that as many as 20% of those infected with hepatitis C may develop cirrhosis of the liver and 4% will develop liver cancer. In short, the argument is that it’s cheaper, and more effective, to take the pills. But what might the actual impact on medical costs look like? A new estimate suggests that, for private insurers, the impact of new hepatitis C treatments – including Sovaldi and any forthcoming medications – on medical costs will eventually decline, as will the impact on the growth in spending on overall health care.”

Importantly, that report, published by PricewaterhouseCoopers, notes that the “potential long-term savings from these innovative new cures could be substantial.”

A previous NPR story gave one doctor’s perspective: “Dr. Camilla Graham of Beth Israel Deaconess Medical Center in Boston thinks that the high cost of the new hepatitis C treatments might be justified. ‘Maybe we decide that $100,000 is a worthwhile investment to cure someone of an otherwise devastating chronic infection,’ Graham says. After all, it can now cost up to $300,000 to treat patients with advanced hepatitis C, using less effective and more harrowing regimens. Graham is a hep-C specialist. So she knows firsthand how the slow-moving virus kills patients by destroying their livers and causing liver cancer. The virus is the main reason that nearly 17,000 Americans are waiting for a liver transplant.”

Additional highlights from the Optum article, Hepatitis C: Big changes coming soon:

  • “Until relatively recently, hepatitis C had been difficult to treat and nearly impossible to cure with existing therapies. Without the new and pending wave of highly effective treatments, is was estimated that the cost to treat the currently infected group of Americans over their estimated survival span could reach $360 billion in today’s dollars. That translates into an annual health care cost as high as $9 billion for the affected U.S. population.”
  • “In fact, the research effort around hepatitis C continues to accelerate. Additional new products and medicines are on the way, both immediately and in the near term. These will have a significant impact on the way hepatitis C is treated, and on employer plan costs.”
  • “The research pipeline for hepatitis C also includes new drugs currently at various stages of seeking FDA approval. Several drug makers, including AbbVie Inc. (formerly Abbott), Gilead Sciences Inc., Medivir AB, Janssen and Bristol-Myers Squibb Co. are expected to bring a new generation of hepatitis C drugs to market in 2013 and 2014.”
  • “It is useful to briefly review the major advances in clinical efficacy for hepatitis C medications over just a few years. Traditional therapies (prior to 2011) commonly reported cure rates in the range below approximately 50 percent. The current state-of-the-art therapies, Incivek and Victrelis, (in combination with injected interferon and ribavirin pills) produce cure rates as high as 63%- 79% in first-time treatment patients. The experimental new drugs and combinations of drugs being tested now are reporting much higher cure rates. At least one has reported cure rates up to 100 percent in trials and several other combinations are reporting cure rates above 80 and 90 percent, albeit still in small studies.”
  • “At this time we simply do not know what prices will be for the new drugs, since none of the manufacturers has committed to a number. This hasn’t prevented great speculation, including predictions that the new Gilead drug (sofosbuvir) may cost up to $100,000 per patient for a course of treatment.”
  • In addition to their improved clinical effectiveness, Victrelis and Incivek are also very expensive. Recall that they must be used in combination with the previously existing therapy (injected interferon and ribavirin pills) which costs approximately $15,000 to $20,000 for 48 weeks of therapy. Adding Victrelis and Incivek means an additional cost of nearly $50,000 per course of treatment.”
  • “Can drugs as expensive as these really be cost-effective? The answer is yes.”
  • “Hepatitis C-infected patients incur higher health care costs compared with a non-infected population matched by sex, age, and healthcare enrollment. Because costs are driven largely by end-stage liver disease, liver transplants and cancer, total hepatitis C- related health care expenses can be expected to decrease over time as successfully treated patients avoid progressing to more severe forms of the disease. Based on this experience, it is certainly possible that the combination of higher cure rates and reduced side effects, combined with reduced treatment times may mean even greater cost-effectiveness in the future.”

 

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