Spending for medications to treat the hepatitis C virus (HCV) is beginning to moderate after tremendous increases in recent years. From 2016 to 2017, OptumRx clients saw expenses related to HCV treatment drop from third to fifth in specialty class spending. HCV treatment also went from the second highest contributor to class trend to actually pulling trend downward within the specialty category.1
More recent figures (Jan.-Feb. 2016 vs. Jan.-Feb. 2017) show that HCV treatment continues to provide a much needed offset to specialty trend increases, contributing to a nearly four percent reduction in specialty trend.2 To say the least, this represents a dramatic turnaround from the situation only a few years ago.
To briefly recap, HCV is a viral infection that, in its chronic form, may lead to serious liver problems and death. It affects an estimated 3 million Americans.3 In late 2013, the FDA approved the first medication in a new class of drugs to treat HCV infection called direct acting antiviral (DAA) therapy. Two additional medications gained approval in 2014, and still more entered the market in 2015 and 2016. While everyone acknowledges that the new agents are more effective than previous drugs, they came with very high price tags.4
Overall, HCV prices in the U.S. are roughly in line with the rest of the developed world:
The first of the new class, Sovaldi®, drew criticism for its list price of $1,000 per pill. That came to $84,000 for a full 12-week regimen.5 More recently, approved drugs have lower post-rebate prices than Sovaldi, and many OptumRx clients benefit from even lower prices through our negotiated discounts from the manufacturers.
Discounts aside, medications to treat HCV infection remained a significant factor in the upward trend in drug spending subsequent to 2014. Analysts at the Centers for Medicare and Medicaid Services have estimated that HCV drugs accounted for $18 billion in new spending over just 2014 and 2015.4
Yet in addition to their high cost, the new class of HCV drugs offered something rare in the world of specialty medications: Rather than simply treating the symptoms of HCV, (which is common among specialty medications), the new direct acting antiviral agents work to eliminate the hepatitis virus in most patients.6
The impact of these new drugs is both clinical and financial. In effect, the cost decrease we’re seeing is being driven by the simple fact that people don’t need to continue taking these medications indefinitely, as they would with a chronic condition. These new agents are working to actually eradicate the virus.6
Compare this breakthrough treatment with treatment for another specialty-treated condition, multiple sclerosis (MS). With MS, there is no cure.7 No matter how many additional MS patients you treat – even the latest (very expensive) biologic drugs – all that results are more people taking MS drugs. In contrast, with HCV infection, we see increasing numbers of people completing their course of treatment and becoming “cured.”6
Bottom line: People don’t need to continue taking these medications indefinitely, as they would with a chronic medication. These new agents are working to actually eradicate the virus.
Cure vs. SVR
We do need to be fairly careful when we use the word “cure” in the context of HCV. HCV is a complex virus, one that has proven to be highly resistant to treatment in the past. Understandably, clinicians are wary of oversimplifying or overpromising.6
Most often, the term HCV specialists use when they talk about successful treatment is sustained viral response, or SVR. A successful treatment means that HCV is not detectable in the blood at least 12 weeks after completing treatment:
This chart shows a nice summary of how far HCV drugs have come over recent decades:
The question now is whether SVR is the same as a “cure.” And the answer has to do with whether or not SVR is permanent.6
Some doctors do use the word cure, because SVR is as close as we can get to curing HCV. Others prefer the word remission, because of doubts about how permanent SVR really is.6
In reality, the most recent studies suggest that the likelihood of SVR being permanent is very high. Here are a two points to keep in mind:
- Studies show that once patients have achieved SVR, they have a 99.2 to 100% chance of remaining HCV-free. Less than 1% of people who achieve SVR experience a return of HCV infection.6
- When HCV does return after achieving SVR, there is a good chance it is due to re-exposure. In effect, it is a new infection, just in the same person. Most commonly this is seen among IV drug users, or prisoners, and those co-infected with HIV.6
However, even taking these results at face value, the science of treating HCV is relatively new. Several unknown issues remain regarding exactly how to eliminate this viral infection. Until those unknowns are clarified, many physicians will avoid calling SVR a cure.6
Cost of coverage moderates, but remains high
The numbers of people who are treated for HCV infection in a given timeframe is based on multiple factors. These include how many are diagnosed, and access to coverage. In 2015, roughly 8% of infected patients in the U.S. were treated.8
The most notable result of the improved outcomes associated with the new HCV drugs is the slowing number of people being treated. Nationwide, HCV treatments have gone from 20-30,000 per year in earlier periods, up to 170,000 patients in 2014.9 That peaked at nearly 250,000 patients in 2015, but already the number of new patients was beginning to fall as 2015 progressed.9
The number of treated individuals has continued to decrease, as the initial group of patients with the highest need keeps dwindling.9 In the U.S., 23,000 fewer new patients received treatment for HCV in 2016 compared to 2015.9 From a coverage perspective, during the 2015-2016 reporting period, OptumRx recorded 1/3 fewer claims for HCV medications than the same period a year prior.1
It is encouraging that overall utilization of HCV drugs continues to fall. However, we do need to curb our enthusiasm. While it is great that HCV trend is decreasing, it is important to remember that costs are only decreasing relative to 2014.
Reality check: Current steady state costs are still 400% higher than before the direct acting antiviral agents came on to market. At OptumRx, we anticipate HCV trend to continue to decrease, and then level off in 2018. However, we don’t expect the class to go back to being a nominal expense.2
Sometimes we can be so focused on pharmacy costs that we can momentarily lose sight of the larger picture: overall spending, which includes medical costs. In other words, the cost of treating HCV is not just a pure pharmacy cost. Treatment also yields a medical benefit, one that can be measured in financial terms.
Milliman Consultants have produced a study that estimates the costs that could be avoided by treating HCV infection. Looking at just the portion of the U.S. population that is covered under commercial health insurance, they calculated that treating HCV infection would save slightly over $27 billion for the decade from 2015 to 2025.10 These are the direct and indirect medical costs (excluding pharmacy costs) for tens of thousands of additional commercial members with cirrhosis of the liver and end stage liver disease.10
The Milliman results lend some perspective on the importance of the medical costs of the HCV equation. It helps reinforce the idea that both medical care and pharmacy matter, because all of health care is tightly connected. This is particularly the case with the high cost specialty drugs used to treat HCV.
Focusing JUST on managing the cost of the drugs misses the mark. We need to balance medical and drug costs to manage the overall condition, knowing that adherence to these therapies is critical for managing overall spend and achieving superior clinical results.
Effective management essential
As more patients receive the newest generation of medicines, some experts predict HCV infection will become a rare disease within the next 20 years.11 But first, we will need to manage our way from here to there.
One of the lessons we can take from our recent experience with these new drugs is that they require intensive management and member support. This is essential to ensure that these very expensive treatments are used effectively.
BriovaRx® is the OptumRx specialty pharmacy. They help members taking these medications with ongoing education, adherence and clinical management. Support like this means each patient receives the care and attention they need.
In addition, we recommend:
- Prior authorization ensures that only patients who can benefit from certain drugs receive coverage for them.
- Step therapy promotes drugs of demonstrated cost-effectiveness.
- Supply limits and fixed treatment durations help avoid waste.
Talk to your consultant or OptumRx representative to learn more about how we help manage HCV costs.
- OptumRx internal study: Based on commercial OptumRx claims experience for the period between January-November 2015 vs. January-November 2016.
- OptumRx internal study: Based on OptumRx commercial ASO experience January-February 2016 vs. January-February 2017.
- Mayo Clinic. Hepatitis C/Overview. July 26, 2016. Accessed at: http://www.mayoclinic.org/diseases-conditions/hepatitis-c/home/ovc-20207365 on 04.26.2017.
- Health Affairs Blog. The Cost of a Cure: Revisiting Medicare Part D And Hepatitis C Drugs. Nov. 3, 2016. Accessed at: http://healthaffairs.org/blog/2016/11/03/the-cost-of-a-cure-revisiting-medicare-part-d-and-hepatitis-c-drugs/ on 04.25.2017.
- Associated Press. Maker of $1,000 hepatitis C pill was focused on profits, not patients, report finds. Dec. 1, 2015. Accessed at: http://www.pbs.org/newshour/rundown/maker-of-1000-hepatitis-c-pill-was-focused-on-profits-not-patients-report-finds/ on 04.26.2017.
- Hepatitis Central. The 9 Truths About Hepatitis C Treatment Success. Feb. 1, 2017. Accessed at: http://www.hepatitiscentral.com/news/the-9-truths-about-hepatitis-c-treatment-success/ on 04.25.2017.
- Mayo Clinic. Diseases & Conditions/ Multiple sclerosis/ Treatment. April 01, 2017. Accessed at: http://www.mayoclinic.org/diseases-conditions/multiple-sclerosis/diagnosis-treatment/treatment/txc-20131903 on 04.26.2017.
- Report by the IMS Institute for Healthcare Informatics. Comparisons of Hepatitis C Treatment and Costs. Sept. 2016 [PDF]
- IMS Institute. Medicines Use and Spending in the U.S. April 2016. PDF.
- Milliman, Inc. An Actuarial Approach to the Incremental Cost of Hepatitis C in the Absence of Curative Treatments. Sept. 2015. [PDF]
- University of Texas MD Anderson Cancer Center News Release. Study predicts hepatitis C will become a rare disease in 22 years. Aug. 4, 2014. Accessed at: https://www.mdanderson.org/newsroom/2014/08/study-predicts-hepatitis-c-will-become-a-rare-disease-in-22-year.html on 04.25.2017.
STATEMENT REGARDING FINANCIAL INFLUENCE:
This article is directed solely to its intended audience about important developments affecting the pharmacy benefits business. It is not intended to promote the use of any drug mentioned in the article and neither the author nor OptumRx has accepted any form of compensation for the preparation or distribution of this article.