Proposals such as allowing Medicare price negotiation, capping out-of-pocket drug costs, importing drugs, and limiting manufacturer’ spending on patient marketing could all result in lower HCV drug costs.
The high cost of hepatitis C virus (HCV) drugs has caused significant financial strain for patients and the health care system. These drugs cost as much as $95,000 for a 12-week treatment, but carry a 90% or better cure rate, which many believe justifies the cost.
While some insurers have implemented cost containment strategies to prevent early stage patients from receiving the treatment, lawsuits have been filed challenging the ethics of these practices.
Lawmakers are now struggling to create legislation that will provide these patients with the treatments they need, but a majority of proposals do not gain traction, according to a report published by Mediware.
Sofosbuvir (Sovaldi) received FDA approval in 2013, and was the first drug deemed safe and effective without interferon. It was also the first approved curative treatment for HCV.
No previous treatments resulted in a sustained virologic response, which made sofosbuvir a highly sought-after drug. Gilead Sciences priced the treatment at $1000 per pill, making the total cost of the treatment $84,000.
Gilead then combined sofosbuvir with a new drug, ledipasvir, to create the even more effective combination treatment, Harvoni. Harvoni’s total treatment cost is $94,500 for a 12-week regimen.
If CDC estimates are correct and 3.5 million Americans have HCV, then treatment with Harvoni would cost payers $331 billion, which was more than total drug spending in 2013, according to the report.
Although most other specialty drugs only treat a small number of patients, HCV drugs treat a large patient population, and provide manufacturers with opportunities to generate significant revenue.
Interestingly, sofosbuvir only costs $900 in Egypt, and $55,000 in Canada, substantially less than the cost in the United States. This has caused some lawmakers to accuse Gilead of price gouging, and limiting access to effective treatments, according to the report.
In some states, Medicaid beneficiaries may not have equal access to the drugs. US Senators have reported that some states cover 9.1% of enrollees for HCV treatment, while others only cover less than 1%.
Medicaid is unable to cover treatment for all enrollees, since covering 1 treatment with Harvoni costs the same as the annual health care costs for 29 enrollees, which highlights the need for lower costs, according to the study.
Both private and public insurers have had to create eligibility requirements that prioritize patients with liver damage, and those who have failed to respond to less costly treatments due to the high price of newer drugs. However, the Department of Veterans Affairs recently announced they would cover HCV treatment costs for all veterans as a result of increased funding and decreased drug costs, according to the report.
With President Donald Trump advocating for lower drug costs, patients with HCV may gain expanded access to treatment.
Proposals such as allowing Medicare price negotiation, capping out-of-pocket drug costs, importing drugs, and limiting manufacturer’ spending on patient marketing could all result in lower HCV drug costs, the authors wrote.
Competition has also been seen to impact HCV drug pricing, and will likely continue to do so in the future as more drugs receive regulatory approval.
The FDA’s approval of Viekira Pak (ombitasvir, paritaprevir, and ritonavir tablets; dasabuvir tablets) in 2014 impacted the pricing of Harvoni. The new approval elicited support from Express Scripts, who then dropped Harvoni and sofosbuvir for patients with HCV genotype 1.
This resulted in Gilead’s stocks taking a 20% hit, prompting them to offer discounts for Harvoni to certain payers. If manufacturers take similar actions, drug costs may be reduced even further.
The most recent approval of Merck’s Zepatier (elbasvir and grazoprevir) caused waves for many reasons. First, the drug’s cure rate was 97% to 100% in patients with HCV genotype 4, and 94% to 97% in patients with genotype 1, which is higher compared with other drugs.
Notably, the price for the drug was only $54,600 for 12-weeks of treatment, which improves access to affordable drugs, according to the report.
A pipeline drug, odalasvir, being developed by Achillion Pharmaceuticals and Johnson & Johnson, also has the potential to reduce drug costs. The drug has shown a 100% cure rate in as little as 6 weeks in combination with sofosbuvir. Shorter treatment spans will likely result in less costly drugs, the authors noted.
Despite treatment for HCV being medically necessary, payers still do not think the high costs for the drugs warrant widespread treatment. However, critics may counter that in the long run, payers are costing themselves more money.
Patients who do not receive treatment for HCV are more likely to develop liver cancer and type 2 diabetes, experience plaque build-up in the arteries, and have an increased risk of stroke, according to the report.
While Gilead’s drugs remain some of the highest priced on the market, the entrance of new, lower cost drugs will likely drive down the cost of HCV treatment over time.
Until that happens, specialty pharmacies and their pharmacists should focus on directing patients to copay assistance programs, and help patients adhere to treatments, the report concluded.