Medicare increases hepatitis C testing, despite high treatment costs

June 3, 2014

Industry experts question whether the high cost of treatment is beneficial to patients and health plans

A decision has been made by the Centers for Medicare and Medicaid Services (CMS) for Medicare to cover hepatitis C virus (HCV) testing for adults. Testing will include a single screening for all adults born between 1945 and 1965, and repeat screenings for adults considered high-risk because of drug use or a blood transfusion prior to 1992.

Increased demand for HCV testing began in late 2013 after the U.S. Preventive Services Task Force recommended that all Baby Boomers be tested regardless of risk factors, as 4.3% of people between 40 and 49 years old have the virus. 

The high cost of HCV treatment became a topic of debate upon the release of two new drugs in 2013. For example, Sovaldi (sofosbuvir) costs $1,000 per pill, or $84,000 for a 12-week treatment regimen and $168,000 for a 24-week treatment regimen. The drug generated a whopping $2.3 billion in revenue for its first quarter 2013 sales. Olysio (simeprevir), another new HCV treatment, costs $800 per pill with treatments lasting 24 to 48 weeks. 

According to a recent FormularyWatch report, the pricing of Sovaldi has created uneasiness amongst activists and payers. Because only 11% of all HCV patients develop liver cirrhosis within 20 years, industry experts question whether the high cost of treatment is beneficial to patients and health plans.

“Escalating drug prices are forcing all of us, whether families, employers and drug plans, to make impossible choices,” says Larry McNeely, policy director for the National Coalition of Health Care. The nonprofit organization recently launched the Campaign for Sustainable Rx Pricing, which aims to find affordable solutions for expensive treatments such as Sovaldi.

“When faced with a $1,000 a pill or $100,000 a year price tag, families, patients and plans are forced to consider everything. But what’s really needed is a new path that can reward innovation without completely busting the budgets of families, employers, and public institutions,” McNeely says.

At a recent forum on drug cost and value, Karen Ignagni, president of American’s Health Insurance Plans (AHIP), said that Gilead, the manufacturer of Sovaldi, is “asking for a blank check" from health plans. 

"It will blow up family budgets, state Medicaid budgets, employer costs and wreak havoc on the federal debt," she continued.  

Steven Flamm, MD, medical director of the liver transplant program for Northwestern Medicine discusses the hepatitis C drug pipeline.

COST VS. VALUE>>>

 

Cost vs. value

While drug manufactures are feeling the heat to offer additional hepatitis C treatments at lower prices, insurers fear that coverage decisions for Sovaldi will prompt similar pricing of treatments moving through the drug pipeline.

"Managed care executives will have to closely examine their budgets to determine whether or not they are able to handle the financial costs that may be incurred with providing these hep C treatments to patients, while also factoring in improved quality of life for those patients who are ultimately able to receive this treatment," says Abimbola Farinde, PharmD, MS, who serves on the faculty at Columbia Southern University, Orange Beach, Alabama.  

On the other side of the issue, Robert Goldberg, Ph.D., vice president and co-founder of the Center for Medicine in the Public Interest says that focusing on cost only obscures the medical milestone achieved in the prevention, treatment and cure of HCV. According to Dr. Goldberg, the National Viral Hepatitis Roundtable estimates that without any major changes in current testing practices, the cost of HCV care and treatment to Medicare will increase five-fold over the next 20 years, from $5 billion to $30 billion.

"This one-time test, in combination with other targeted treatments, would result in identifying more than 800,000 cases and avoiding as many as 121,000 deaths," he says. 

According to Goldberg, each person treated with Sovaldi could live an additional 15 years.

"Assuming $100,000 value for each additional life per year, that's worth $1.5 million for every individual, meaning every healthcare dollar spent curing hep C generates $17 of value to each patient," he says. "The cost is outweighed by the value of reducing the impact of this disease." 

Express Scripts predicts a growth of 168% in the HCV drug trend by 2015.

For more coverage on this topic, look for Jill Wechsler’s upcoming Politics & Policy column: Insurers challenge high drug prices.