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Forgotten In The Sovaldi Price Debate: Hep-C Patients And Healthcare Savings. Drug Research Innovation. Do insurers have correct model?
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"Our concern is whether or not the insurance model is a correct one, sending the right signals out to patients and providers,"......In the case of HCV, the new "direct-acting agents" such as sofosbuvir offer the possibility of curing what was once an intractable illness that eventually lead in many cases to end-stage liver disease and transplant...... a pill that cures hepatitis C in more than 90% of patients in just 12 weeks. Furthermore, it is safer than the older regimens and is roughly 20% cheaper than the older treatments. One would think that the maker of such a wonder drug would be hailed for providing a major medical advance."
http://www.forbes.com/sites/johnlamattina/2014/03/24/will-the-hep-c-drug-sovaldi-drive-gilead-to-the-top-of-the-biopharm-industry/
Sometimes a simple response to a post can provide a lot of clarity. My first Sovaldi post recently generated such an example......"Rather than being lauded for discovering a major breakthrough therapy, Gilead instead has been under the gun about its pricing for this drug, which is $84,000 for a course of therapy"
"My sister is a Genome 1 Registered Nurse who was infected by a patient with HCV more than 30 years ago. She is already in mid-stage cirrhosis and, if she lived long enough, her only prospect was a liver transplant using her son as a donor. We are all grateful for Sovaldi, which she starts next week. Although her insurance covers 90%, Gilead will contribute all but the last $20."
Sovaldi will cure this woman's hepatitis C and, in doing so, will avoid an expensive and complicated liver transplant for her and a partial liver donation from her son. A "routine" liver transplant where the liver is from a cadaver costs close to $300,000. A "living donor" transplant, such as was planned for this nurse and her son, is even more expensive. Furthermore, in donating about a third of his liver to his mother, the son also has a 3% risk of severe complications from his surgery. This is all avoided thanks to Gilead's drug, a pill that cures the disease when taken once-a-day over 12 weeks.
Rather than be praised for its hepatitis C cure, Gilead has been vilified particularly by health insurance companies, because of its high price - $1,000 per pill which translates to a total of $84,000. This woman is fortunate in that she has good health insurance, one that covers 90% of the drug's cost. Still, that would leave more than $8000 that would be needed to cover Sovaldi's price, but Gilead is taking care of this. (Yes, drug manufacturers do have plans that supplement insurance plan drug coverage, a point that is often lost in these discussions.) Thus, this patient will not be impacted financially by the cost of treatment.
Insurance companies, however, have been very vocal in their criticisms of Gilead's pricing policy. With 3 million people in the U.S. infected with hepatitis C, insurers are claiming that curing this disease in this large a population will bankrupt healthcare systems. Actually, data recently published by the PwC Health Research Institute shows that this might not be the case. In a new study, the authors show that, while the use of Sovaldi and other emerging hepatitis C cures will drive healthcare costs in the short term, this will spike in 2016 and these drugs will actually drive down overall spend on this disease within a decade. Here is their explanation.
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"Our concern is whether or not the insurance model is a correct one, sending the right signals out to patients and providers,"......In the case of HCV, the new "direct-acting agents" such as sofosbuvir offer the possibility of curing what was once an intractable illness that eventually lead in many cases to end-stage liver disease and transplant."
What Price Innovation? The Sovaldi Saga
The biopharmaceutical industry has been highly criticized for a number of years with respect to the high costs of medicines, particularly for drugs to treat cancer and rare diseases. Physicians and insurers have challenged the benefit of a new drug that might cost tens of thousands of dollars yet only extends life for a few months. This has led to various ethical debates about the value of life vs. the cost to society as a whole.
Continuing down this line of reasoning, industry critics have been challenging biopharmaceutical companies to develop truly innovative drugs, drugs that significantly extend life or which can be shown to add real value to the healthcare system. Naysayers will urge drug discoverers to cease and desist with incremental advances. Rather, they want companies to develop major breakthroughs that don't just ameliorate disease but even cure it. Anyone who has been involved in drug R&D knows that's a stiff challenge.
Hepatitis C is a largely asymptomatic disease. It is estimated that three million Americans are infected with this virus, but most don't know they have it and only 20% seek treatment. However, the virus, which resides in the liver, causes scarring, leads to cirrhosis and patients can then develop liver failure and liver cancer.
Up until recently, treatments for hepatitis C were modestly effective. Patients were given a cocktail of drugs plus injections of interferon for 24 - 48 weeks and cure rates range from 40 - 80%, depending on the severity of the disease. However, these drugs are poorly tolerated, particularly the interferon component which causes flu-like symptoms in patients. As a result, many with hepatitis C often eschew treatment.
However, there is new hope for hepatitis C patients. A breakthrough drug from Gilead, Sovaldi, is a pill that cures hepatitis C in more than 90% of patients in just 12 weeks. Furthermore, it is safer than the older regimens and is roughly 20% cheaper than the older treatments. One would think that the maker of such a wonder drug would be hailed for providing a major medical advance.
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AHIP Blasts 'Unsustainable' Drug Costs
Published: May 21, 2014
The organization that represents health insurance plans has slammed the drug industry, saying it is pricing new medications at "unsustainable" levels.
"We cannot sustain six-figure treatments and we are at the beginning of that trend," said Karen Ignagni, president and chief executive officer of America's Health Insurance Plans (AHIP).
In an online panel discussion sponsored by The Atlantic magazine, Ignagni said the "Sovaldi example" has raised fears that skyrocketing costs will sink the health care system.
Sovaldi is the trade name for sofosbuvir, a new medication that is used to treat hepatitis C (HCV) and leads to cures in most cases within 12 weeks.
The issue is that the drug's maker, Gilead Sciences of Foster City, Calif., has pegged the price of the drug at $1,000 a dose, which over a standard course of treatment adds up to $84,000 per patient.
Additional costs for other drugs and medical treatment can push the total cost of a cure into the six-figure range.
Sovaldi brought Gilead $2.27 billion in revenue worldwide in its first full quarter on sale, the company said in April.
"The company in this case is asking for a blank check," Ignagni said, which if granted will "blow up family budgets, will blow up state Medicaid budgets, will blow up employer benefit costs ... and wreak havoc on the federal debt."
But the company has defended its pricing, saying it is justified by a long-term cost saving.
Gilead spokeswoman Cara Miller told the news agency Reuters that the drug price was set so that "the total regimen cost is equal to that of prior standard of care regimens."
She added that the drug "represents a finite cure, an important point to consider when comparing the price of a pill or bottle to the lifetime costs of treating a chronic disease."
Annual drug costs in the U.S. currently reach $300 billion, commented Steve Miller, MD, chief medical officer of Express Scripts, a St. Louis-based prescription management company.
But the 1% of patients who currently take so-called specialty drugs -- such as sofosbuvir -- account for 27% of that spending, Miller said. By 2018, he added, that 1% will account for 50% of drug costs.
"It's not sustainable," he said.
The promise of science for medicine is "astounding," said John Castellani, president and chief executive officer of the Pharmaceutical Research and Manufacturers of America.
Currently, there are about 5,400 medications in the industrial pipeline, he said, and about 70% of those have the possibility of being "first in class."
"How do you balance the incredible promise that science can bring with the ability for patients to afford it?" he said. But he noted that most patients pay through their insurance provider, rather than directly.
"Our concern is whether or not the insurance model is a correct one, sending the right signals out to patients and providers," Castellani said.
He noted that it's usually cheaper to prevent and cure disease before they reach the acute stage.
In the case of HCV, the new "direct-acting agents" such as sofosbuvir offer the possibility of curing what was once an intractable illness that eventually lead in many cases to end-stage liver disease and transplant.
Several other drugs and drug combinations are in the approval process and some manufacturers have indicated they will compete with Gilead on price. Doctors who treat HCV patients are hoping that market forces will soon drive prices down.
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