New hepatitis C drugs may strain the system

The cost of treating people infected with the hepatitis C virus (HCV) with newly approved therapies will likely place a tremendous economic burden on the country’s health care system.

The prediction comes from a cost-effectiveness analysis led by researchers at MD Anderson. The findings, reported in the Annals of Internal Medicine, predict that the cost of providing patients their daily regimens could total $90 billion over five years.

Jagpreet Chhatwal, Ph.D., study lead and assistant professor of Health Services Research, reported a combination of two drugs — sofosbuvir and ledipasvir — recently approved by the U.S. Food and Drug Administration to treat hepatitis C — is cost-effective compared to the old standard of care. The budget needed to treat all diagnosed patients, however, is 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,” says Chhatwal. 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.”

More than 2 million people are infected with HCV, a virus found in the liver that can cause liver cancer. It is transmitted through blood-to-blood contact.

Study results showed that using the new drugs is cost-effective in the majority of patients. However, the budget required to treat all eligible patients would be $90 billion over the next five years. Compared with the old drugs, new therapies would cost an additional $20 billion, whereas the cost offsets would be only $16 billion.

“While most developed countries factor in treatment cost before approving a drug, U.S. law prohibits considering such costs. Therefore, patients almost always end up paying more for the drugs that were developed in the U.S.,” Chhatwal explains. “Considering the law also prohibits Medicare from negotiating drug pricing, the new treatment cost could strain the Centers for Medicare and Medicaid Services budget.”

Economics need to play an important part of improving the health care system, Chhatwal said.

“Hepatitis C presents an unusual case where we have cost effective therapeutic options that our health care system cannot afford,” he continued. “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.”