Cost Burden of New Hepatitis C Drugs, Effect on Health Care System, Analyzed

Researchers who analyzed the cost of new high-price hepatitis C drugs found them to be cost effective for most patients yet likely to weigh down budgets of US government and insurance providers for years to come like no drug ever before.

The cost of new drugs to treat people infected with hepatitis C virus will “likely place a tremendous economic burden on the country’s health care system,” states a news release on the findings from a University of Texas MD Anderson Cancer Center that appears in the March issue of Annals of Internal Medicine. Jagpreet Chhatwal, assistant professor of Health Services Research at the center, and colleagues conducted the analysis of sofosbuvir and ledipasvir, approved last year by the FDA for chronic hepatitis C genotype 1 and marketed by Gilead Sciences under the name Harvoni.

The analysis found the new drug therapy to be cost effective in comparison to the old standard of care for the virus, which involved the use of pegylated interferon and other drugs. However, while the newer drugs work faster, they come with a bigger price tag and over five years could cost $20 billion more than the old therapies, the release states.

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

Health officials estimate that roughly 3 million people in the U.S. are infected with hepatitis C virus, which can severely damage the liver over time if left untreated. Newly developed drugs to treat the disease are generally more expensive in the U.S. than in other countries where costs of drugs are government regulated.

Researchers of the study, which was funded by the National Institutes of Health, used a simulation model to evaluate the cost effectiveness of the combination drug regimen and its budget impact. They considered the estimated cost for four major hepatitis C groups.

The results found that sofosbuvir-ledipasvir would substantially reduce the disease clinical burden and would mostly benefit those groups who have genotype 1 hepatitis C, have advanced disease and patients who are younger. However, treating all patients diagnosed with the virus would have a whopping impact on U.S. health care budgets, according to the study.

Chhatwal’s analysis predicts that the budget required to treat all eligible patients over the next five years would be $90 billion. That number was revised from an initial $136 billion after the study was completed to take into account an announcement by Gilead that it intends to discount Sovaldi — the brand name of sofosbuvir - by as much as 46%, the release states. Also after the study, the FDA approved a competing hepatitis C regimen made by drugmaker AbbVie and some companies that manage prescription benefits announced negotiated discounts with AbbVie and Gilead.

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

Another cost analysis in the same journal issue reviewed published research on various new hepatitis C regimens. Results from that study indicated that newer regimens were cost-effective treatment for genotype 1 and 3 hepatitis C but not for patients with genotype 2.