A national dialogue is needed around the value of new medicines and cures and the role they play in improving patient health and helping to manage long-term spending in the U.S. health care system. Unfortunately, the debate around hepatitis C has, for the most part, been twisted to the point that modern-day cures are seen as a nuisance rather than a monumental step forward in the battle against disease. For this reason, it is important to set the record straight on some of the misperceptions about the value of new and forthcoming hepatitis C treatments.
Myth: New treatments for hepatitis C could double prescription drug spending in 2014.
Fact: New treatments for hepatitis C are projected to increase healthcare costs by only half a percent in 2014.
New cures for hepatitis C can help prevent up to $85 billion in medical costs in the U.S. healthcare system. A recent report by PricewaterhouseCoopers found that these new treatments would actually have a minor effect on growth in 2014. In fact, the report projects that new hepatitis C treatment will impact growth in healthcare costs in 2014 by only a half a percent, but the impact will fall in future years and level off after 2016 as patients are cured.
The report also notes that long-term savings for chronic treatments, liver transplants and lost productivity may ultimately offset the cost of these specialty drugs for the most seriously ill patients.
IMS Health estimates that total drug spending, including specialty medicines, is projected to remain at historically low levels, averaging 1 to 4 percent annually until 2017.
Hepatitis C is the leading cause of cirrhosis, liver cancer and liver transplantation, and the medical costs associated with these very serious complications are no minor expense. End-stage liver disease average annual treatment costs are estimated at $59,995 per patient, and for those with liver cancer, costs are estimated at $112,537. Liver transplant costs range as high as $500,000 and require many years of costly follow-up care.
Myth: New treatments for hepatitis C are not worth the cost.
Fact: New and forthcoming hepatitis C treatments can cure over 90 percent of patients, providing tremendous value to patients and society.
Until recently, available therapies used to treat HCV infection cured only about half of patients, but with debilitating flu-like side effects. For those who failed to respond to treatment, there were no alternative medicines to treat the disease. With new and forthcoming treatments, patients will be more likely to adhere to their medication regimens given that there are fewer side effects and non-injectable options are now available.
The availability of more effective treatments provides the opportunity to improve outcomes for HCV patients who are frequently unable to work or have significantly more lost work days per employee than other workers, including sick leave, short-term disability and long-term disability.
Myth: All three million people estimated to have hepatitis C in the U.S. will be treated with new medicines in 2014.
Fact: More than three out of four people with hepatitis C do not know they are infected and are therefore unlikely to seek treatment for the disease this year.
Unfortunately, progression of the disease occurs slowly, meaning patients often remain asymptomatic (and unaware they are infected) until very serious and often expensive complications emerge. Even among those Americans seeking testing, half do not return to obtain their results and are therefore unaware of their infection. Among those in the commercially insured market, PricewaterhouseCoopers estimates that only about 60,000 hepatitis C patients will be treated in 2014.
Myth: Payers will pay the list price of new hepatitis C treatments for all patients getting treated.
Fact: Insurers negotiate prices with drug manufacturers and the government mandates discounts in some public programs.
The Medicaid and the Veterans Affairs program receive statutorily set rebates on prescription medicines, plus additional rebates in some instances. Plans and biopharmaceutical manufacturers also negotiate discounts and rebates on medicines in both the Medicare Part D program and commercial markets. Potential savings could be realized from competition as more hepatitis C medicines enter the market over the next year.
PhRMA, or the Pharmaceutical Research and Manufacturers of America, represents the leading biopharmaceutical researchers and biotechnology companies in the United States