New Data Warns of Looming Hepatitis C Medication Costs

Sep 17, 2014
The accelerating annual price hikes for hepatitis C medication are both unprecedented in the industry and unsustainable for the country.
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  • Hepatitis C

The upcoming cost burden of treating patients with hepatitis C could bankrupt many of the nation’s businesses. Never before has a class of medication been priced this high to treat a patient population this large.

To better understand the relative expensiveness of Sovaldi® (sofosbuvir), as well as the full backlog of patients seeking treatment, it helps to look at the recent history of medications to treat hepatitis C.

Charging a Premium on a Premium

Just four years ago, the standard medication treatment for patients with hepatitis C – pegylated interferon combined with ribavirin – cost approximately $27,000 per regimen. In 2011, an additional new therapy – protease inhibitors Incivek® (teleprivir) and Victrelis® (boceprevir) – was introduced at a significant price premium. These drugs, used along with pegylated interferon and ribavirin, essentially doubled the cost to treat a single hepatitis C patient. Just two years later, Olysio (simeprevir) and Sovaldi doubled the U.S. price for the standard treatment again – with the manufacturers essentially charging a premium on a premium of the treatment prices from four short years ago.

 Hepatitis C Treatment Costs Over Time

It’s important to note that these new therapies provide a true improvement over the previous treatments, and as such the manufacturers deserve both market share and a fair profit for their innovations. However, these accelerating annual price hikes within a therapy class are both unprecedented in the industry and unsustainable for the country.

Warehoused Hepatitis C Patients

An estimated 3.2 million Americans are infected with hepatitis C. Because the disease progresses slowly and previous medications were difficult to tolerate, hepatologists routinely recommended that patients wait for the introduction of clinically superior treatments. The new generation of medications, beginning with Sovaldi and Olysio and continuing with new products expected in the coming months, offers the clinical benefits that both physicians and patients have been waiting for.

New Express Scripts analysis of 71 plan sponsors underscores this trend of physicians “warehousing” patients. In 2013, only 8% of patients seeing a physician for hepatitis C were also taking a medication to treat the disease.

High Price x Large Volume = Unsustainable Costs

The same Express Scripts study demonstrated that in 2013 – even before the introduction of Sovaldi and Olysio – the cost of prescription drugs accounted for roughly half of the total combined medical and pharmacy costs to treat hepatitis C patients. The total prescription drug bill was half the cost, even though 92% of the patients were not yet receiving therapy.

In addition, patients being treated with prescription medications for hepatitis C had combined medical and pharmacy costs five times higher than average per-patient costs.

The current pricing of hepatitis C treatments, combined with the vast number of warehoused patients, has the potential to create a financially devastating equation for plan sponsors.

To help plan sponsors estimate prevalence and costs of treating hepatitis C in their member populations, Express Scripts researchers developed a tool that enables clients to calculate future hepatitis C spending for their patient population. It will be rolled out later this week.

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Lab Staff
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