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HCV Costs/Access
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"Just what impact will hepatitis C treatments have on medical spending over the next few years?........state Medicaid programs and private payers have blanched at the cost.......these medicines will, collectively, become budget busters......PwC's Health Research Institute [http://www.pwc.com/us/en/health-industries/behind-the-numbers/download.jhtml] says new specialty prescription drugs like the Hepatitis C drug Sovaldi sold by Gilead Sciences (GILD) will contribute 0.2 percent to total spending growth next year......there is another way to view the issue, which is that the cost of treating patients who may otherwise need countless physician visits, hospital care and a liver transplant can run higher. Consider that as many as 20% of those infected with hepatitis C may develop cirrhosis of the liver and 4% will develop liver cancer. In short, the argument is that it's cheaper, and more effective, to take the pills........"Eventually all the people with Hep C will be cured, and all you have to do is deal with the new ones, which is not that heavy a growth," he says......."In the beginning, you have a back log," says Benjamin Isgur, a director at PwC's Health Research Institute, which has both drug makers and insurers among its clients. "But over time, that backlog gets reduced and you'll start having a new, natural population that gets treated each year, which is a smaller number than the number of people who are getting treated right now......And so, the impact of these drugs is currently rising thanks to these new treatments, reaching an estimated 0.5% of overall medical costs this year and 0.7% in both 2015 and 2016. But afterwards, the impact lessens and is estimated to decline to 0.3% by 2020 and remaining at that level for another few years
Similarly, the firm projects that the impact on spending growth for health care will be greatest this year, rising 0.5%, but falling to 0.2% next year and then having little to no impact through 2024. "People think this huge cost is here and is going to continue on the same path," says Jim Prutow, a principal at the PwC Health Research Institute, "but over time, hepatitis C treatments will actually contribute less and less to medical costs."""
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Specialty drugs could fuel health care inflation
Since the recession, U.S. employers' health care spending growth has been slowing from year to year. That's about to change, according to a new report from PricewaterhouseCoopers' Health Research Institute.
The report says employer health care spending will accelerate in 2015, rising by 6.8 percent, a slightly faster rate of growth than what the company projected for 2014. The report's authors say expensive specialty drugs will play a role in fueling the sharper rise in spending.
"It's actually a very big deal in terms of dollars. It's one of the reasons we single out that factor for 2015," says Ceci Connolly, managing director of PricewaterhouseCooper's Health Research Institute.
Connolly points to a new treatment for Hepatitis C as an example of the new, high-cost drugs. Hepatitis C is a virus that causes liver disease and affects about 3 million Americans. One breakthrough drug, Sovaldi, can completely cure Hepatitis C in a high percentage of patients. But a twelve-week treatment costs $84,000.
However, in the case of Hepatitis C drugs, the hit to employers might not last long, according to Princeton University health care economist Uwe Reinhardt.
"Eventually all the people with Hep C will be cured, and all you have to do is deal with the new ones, which is not that heavy a growth," he says.
The PricewaterhouseCoopers researchers say that in the short-term, employers will probably try to offset higher medical costs by shifting more of them to workers.
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Even With Sovaldi And ACA Costs, Health Inflation To Rise 'Modest' 6.8% In 2015 - (06/24/14)
PwC's Health Research Institute says new specialty prescription drugs like the Hepatitis C drug Sovaldi sold by Gilead Sciences (GILD) will contribute 0.2 percent to total spending growth next year.
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What Impact Will Hepatitis C Drugs Have on Medical Costs? Look Here
http://blogs.wsj.com/pharmalot/2014/06/24/what-impact-will-hepatitis-c-drugs-have-on-medical-costs-look-here/?KEYWORDS=hepatitis+c
Ed Silverman
Just what impact will hepatitis C treatments have on medical spending over the next few years?
The answer to this question has been the subject of heated debate thanks to the Sovaldi treatment sold by Gilead Sciences GILD +0.01%. The medication can cure 90 percent of the patients who have the most common form of the affliction, and costs $1,000 a day for a 12-week course, or $84,000 for one patient.
Medications for other diseases may be more expensive, but insurers worry about the potential outlay, given that approximately 3.2 million people in the U.S. are chronically infected with hepatitis C, according to the U.S. Center for Disease Prevention and Control. Some estimates suggest the number is closer to 5 million. For months, state Medicaid programs and private payers have blanched at the cost.
Other drug makers hope to catch up to Gilead in the race to develop a still more effective and convenient treatment that works even faster. But it remains unclear to what extent a price war may ensue. Meanwhile, concerns mount these medicines will, collectively, become budget busters.
Of course, there is another way to view the issue, which is that the cost of treating patients who may otherwise need countless physician visits, hospital care and a liver transplant can run higher. Consider that as many as 20% of those infected with hepatitis C may develop cirrhosis of the liver and 4% will develop liver cancer. In short, the argument is that it's cheaper, and more effective, to take the pills.
But what might the actual impact on medical costs look like?
A new estimate suggests that, for private insurers, the impact of new hepatitis C treatments - including Sovaldi and any forthcoming medications - on medical costs will eventually decline, as will the impact on the growth in spending on overall health care. The notion is largely based on the current pricing for Sovaldi, which assumes forthcoming drugs would be similarly priced.
Two factors will be at work, according to PricewaterhouseCoopers Health Research Institute
[http://www.pwc.com/us/en/health-industries/behind-the-numbers/download.jhtml]. Besides lowering the overall cost of treating hepatitis C sufferers, the market research firm maintains that the actual number of patients will gradually decline over the next decade as more patients are treated, including those whose physicians are waiting for better medications to become available.
"In the beginning, you have a back log," says Benjamin Isgur, a director at PwC's Health Research Institute, which has both drug makers and insurers among its clients. "But over time, that backlog gets reduced and you'll start having a new, natural population that gets treated each year, which is a smaller number than the number of people who are getting treated right now."
And so, the impact of these drugs is currently rising thanks to these new treatments, reaching an estimated 0.5% of overall medical costs this year and 0.7% in both 2015 and 2016. But afterwards, the impact lessens and is estimated to decline to 0.3% by 2020 and remaining at that level for another few years
Similarly, the firm projects that the impact on spending growth for health care will be greatest this year, rising 0.5%, but falling to 0.2% next year and then having little to no impact through 2024. "People think this huge cost is here and is going to continue on the same path," says Jim Prutow, a principal at the PwC Health Research Institute, "but over time, hepatitis Cc treatments will actually contribute less and less to medical costs."
Of course, this is just an assumption and the outcome will depend on the actual pricing for any forthcoming treatments and the number of hepatitis C sufferers who emerge. Bear in mind, this number could become larger than some imagine, now that physicians are being encouraged to screen all patients who may be infected, regardless of whether they display any symptoms.
Still, the estimate attempts to quantify, for better or worse, the costs that so many dread.
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