Hepatitis C Drugs Will 'Strain Budgets' at Current Prices: Study

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MONDAY, March 16, 2015 (HealthDay News) -- New hepatitis C drugs promise cure rates above 90 percent, but could prove to be budget-busters for public and private health insurers, a new analysis finds.

Recently approved drugs for chronic hepatitis C have been heralded as a breakthrough that could make the liver disease "rare" in the United States. But with prices topping $1,000 per pill, government and private insurers are balking -- often putting limits on which patients qualify for coverage.

Now two new studies in the March 16 Annals of Internal Medicine conclude that for individual patients, treatment with the pricey pills is "cost-effective." That's a calculation that takes into account the years of better health and quality of life people will likely enjoy.

The bad news? One study estimates that state governments and insurers will have to dig up an extra $65 billion over five years to get the drugs to every eligible American.

And that won't be offset by the money saved by avoiding hepatitis C complications -- which amounts to about $16 billion.

"One of the arguments has been that these expensive drugs will ultimately save us money," said study leader Jagpreet Chhatwal. "But our data show that's clearly not the case."

He stressed, however, that none of this means that patients should not be getting the new drugs -- which include the oral drug sofosbuvir (Sovaldi) and a combination of sofosbuvir and ledipasvir marketed as Harvoni.

"We know these drugs are good, and patients need treatment," said Chhatwal, an assistant professor at the University of Texas M.D. Anderson Cancer Center. "High costs shouldn't be an obstacle."

Hepatitis C is a viral infection that causes inflammation in the liver; for most people the infection becomes chronic. According to the U.S. Centers for Disease Control and Prevention, about 3.2 million Americans have chronic hepatitis C.

Without treatment, about 15 percent to 30 percent of those people will develop cirrhosis (scarring) of the liver, according to the CDC. Smaller numbers develop liver cancer.

But for decades, the only treatment for the disease involved the injection drug interferon -- which had to be taken for up to a year, and often caused fatigue and flu-like side effects. And, the cure rate was only 40 percent to 50 percent, according to the U.S. Food and Drug Administration.

But in just the past year, several hepatitis C pills have been approved -- all with high cure rates and big price tags. Gilead Sciences makes both Sovaldi and Harvoni; while AbbVie markets a drug called Viekira Pak.

Treatment with Sovaldi typically lasts just 12 weeks, but that adds up to $84,000. Harvoni can be given for as few as eight weeks, but costs even more per pill, for a grand total of over $93,000.

Chhatwal's team used a simulation model to estimate the costs of giving the two drugs to all eligible Americans, compared to interferon-based regimens. The researchers found that the new drugs would cost an extra $65 billion in the next five years.

But the cost savings -- in averted cases of cirrhosis, liver transplants and deaths -- came in at only $16 billion.

"There's no question that treating any individual patient with these drugs is cost-effective, because cure rates are over 90 percent -- approaching 100 percent," said Dr. Eugene Schiff, director of the Schiff Center for Liver Diseases at the University of Miami Miller School of Medicine.

"Even in relatively milder cases, people have fatigue related to the (virus)," Schiff said. "You get rid of the virus, and they feel better, they function better, their quality of life improves."

Schiff said that new hepatitis C drugs from other companies are in the pipeline, and competition should help drive down prices. And, he added, some insurance companies and state Medicaid programs have been striking exclusivity deals with drug makers in exchange for reduced prices.

But many patients still face barriers to getting the new drugs, Schiff explained.

"As a physician," he said, "I'm frustrated because I can't treat the majority of the patients I see."

Most state Medicaid programs have restrictions on coverage, including limiting the drugs to people with more-severe liver disease, according to Medicaid Health Plans of America (MHPA).

That's a particularly important issue because many Americans with hepatitis C are low-income or in prison, according to MHPA. The virus is most often transmitted through injection-drug use or contact with infected blood.

In another study, Chhatwal's team estimated that with the new drugs on the market, hepatitis C could become a "rare" disease in the United States within 20 years.

But that all depends on people having access to the medications, Chhatwal said. To him, the situation highlights a bigger issue: Unlike many other countries, the United States has no system for regulating drug prices.

"I think patients suffer because of that," Chhatwal said.

More information

The U.S. Centers for Disease Control and Prevention has more on hepatitis C.