HCV Drugs Will Cost $90 Billion Over 5 Years

The cost of treating the hepatitis C virus (HCV) with newly approved therapies could total $90 billion over the next 5 years, representing 6.6% of the country’s annual prescription spending, according to researched published by The University of Texas MD Anderson Cancer Center in the Annals of Internal Medicine.

The study was completed before the FDA approved AbbVie’s Viekira Pak for hepatitis C and prior to Gilead Science’s announcing discounts on Sovaldi. The initial cost estimate over 5 years was $136 billion, or 10% of the country’s annual prescription drug spending, but after taking these recent events into account, lead author Jagpreet Chhatwal, PhD, estimated the cost would be $90 billion instead.

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

Dr Chhatwal, assistant professor of health services research at MD Anderson, reported that even though the combination of sofosbuvir and ledipasvir is cost-effective compared with the old standard of care, the cost of treating all diagnosed patients—more than 2 million people—is still unsustainable.

“We have millions of people who need treatment for hepatitis C and payers obviously don’t have the budget to cover this tremendous expense,” he said. “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.”

The researchers used a simulation model to evaluate the budget impacts of HCV treatment and found the newer, more expensive therapies benefit those with advanced disease, with HCV genotype 1, or young individuals more.

The cost of treating all eligible patients with the newer therapies would be an additional $71 billion, according to the new estimates by Dr Chhatwal. Since US law prohibits the FDA from factoring in treatment cost before approving a drug, patients usually end up paying more for drugs developed in the US, he explained. And with Medicare unable to negotiate drug pricing, the cost of new HCV drugs will strain the CMS budget.

However, the president announced in February that he was seeking the authority to negotiate pricing for high-cost drugs in Medicare Part D. Although, it is expected that the Republican-controlled Congress will resist such a move, according to Reuters.

“Economics need to play an important part of improving the healthcare system,” Dr Chhatwal said. “Hepatitis C presents an unusual case where we have cost effective therapeutic options that our healthcare 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.”