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HCV Drug Pricing Models
  We know that drug pricing models throughout the globe vary. Ultimate pricing in the USA vs Western Europe varies, as well as it does in undeveloped countries, lower and middle class countries. It has been discussed that higher US prices subsidize lower prices outside the USA in these various different economies. Incentives for new drug discovery research and drug development are crucial and important to preserving innovative life-saving drug research, and this occurs primarily in the USA economic system, which is where the new HCV drugs were discovered and developed. Apparently there are rumors, since the negotiations & final $ deals are confidential, that Portugal in its "pay for cure" deal paid $7200 tx course and this recent Australian agreement a rumor the same of $7100 per tx course. In the country Georgia Gilead provided free drug [http://www.natap.org/2015/HCV/073015_02.htm] in a special arrangement with the CDC & the country that began several years ago. As I wrote about last week the public info on the deal Portugal cut was they pay "only pay for each person being treated and not for the number of treatments used. The company will provide additional treatments until the patient is cured. The price agreed for each patient has not been disclosed, but the Portuguese health minister said that it has been halved since the beginning of the negotiations."
Value-Based Pricing. I asked NYS if they are considering value-based pricing to which they said yes. CMS is considering value-based pricing, in fact in the CMS letter to state medicaid programs a few weeks ago they asked medical officials to get back to CMS with any discussions they are currently having with drug companies about value-based pricing. So its a topic recently getting attention but not a new concept, and is the subject of new research. I raised the idea of "pay for cure" 5 years ago, outside HCV this idea has been utilized and then last year J&J cut a pay for cure deal with Scotland & you have this hybrid deal cut by Portugal. I raised the idea of amortizing drug costs like a mortgage 2 years ago, and suggested it to NYS medicaid and many other stakeholders recently, after reading about it in a 2014 article co-authored by a the well-known economist Tomas J. Philipson at the University of Chicago and Andrew von Eschenbach formerly with the FDA/NIH: New Models for Healthcare Funding Needed http://www.natap.org/2014/HCV/080614_02.htm There are of course some barriers & problems associated with value-based pricing including pay for cure, one of which is the increased care costs associated with drug treatment. However, these can be packaged together in a comprehensive cost payment arrangement. So I would suggest an HCV care cost payment package could be devised that includes many specialized unique costs and incentives. I propose early HCV treatment can be incentivized, I have put together a model for this.
Models for Drug Pricing. Pay for cure is one type of value-based pricing. Currently several large pharma companies have already in effect a few different types of value based pricing deals with insurers. The history of drug pricing is that higher prices are charged in the USA which it is said help to subsidize lower prices in other parts of the world, which is why historically drug prices have always been higher in the USA than outside the USA, so this appears to have been a model. There are various types pf pay for performance which can be utilized. New drug discovery is crucial. It is important to preserve and incentivize new and innovative drug research, most new drug research comes from the US, a unique economic model that values and rewards new ideas. It is a balancing act that could be achieved to address simultaneously full access to all drug treatments for doctors & patients, and incentivizing new drug research in the private sector.
Jules Levin
Australian Turnbull government to spend $1 billion on hepatitis C 'miracle cures' for all...."a good investment" "disease that has been dubbed Australia's neglected epidemic."
"ambitious plan to eradicate the deadly disease within a generation.....decision by Health Minister Sussan Ley will put Australia on the world stage for tackling the condition as one of the first countries to publicly subsidise the drug for the whole population.......http://www.theage.com.au/comment/ct-editorial/decision-to-tackle-hepatitis-c-a-good-investment-20151219-glrm1d.html

........Critically, the federal government aims to make treatments available to prisoners with the co-operation of state and territory governments......estimated that up to 65 per cent of prisoners in the ACT have Hepatitis C, including at least nine who have contracted it inside the Alexander Maconochie Centre".
December 20, 2015
The Turnbull government will spend more than $1 billion to make breakthrough hepatitis C cures available to all as part of an ambitious new plan to eradicate the deadly disease within a generation.
Health Minister Sussan Ley will announce the major new Pharmaceutical Benefits Scheme listing on Sunday, in a move that will give Australia's 230,000 hepatitis C sufferers affordable access to the drugs.
The drugs can currently cost patients up to $100,000. Under the subsidy, they will be available for the normal PBS co-payment of $37.70 for general patients and $6.10 for concessional patients.
In what is being billed as the biggest PBS announcement since the government started funding the HPV vaccine Gardasil, the drugs - Sofosbuvir with ledipasvir (Harvoni), Sofosbuvir (Sovaldi), Daclatasvir (Daklinza), and Ribavirin (Ibavyr) - will be subsidised from March next year.
The move will make Australia one of the first countries in the world to publicly subsidise the drugs for their entire population, no matter what a patient's condition is or how they contracted the disease.
Crucially, the government will work with state and territory governments to make the treatments available to inmates in prison, where hepatitis C rates are typically very high.
Ms Ley described the listing - which followed a positive recommendation from the Pharmaceutical Benefits Advisory Committee - as a "watershed moment" in Australian history.
One in 100 Australians from all walks of life currently suffer from the disease and there are 10,000 new cases every year, she said."However, with this announcement there is great hope we can not only halt the spread of this deadly infectious virus but eradicate it altogether in time," she said.
The game changing new drugs have a success rate of more than 90 per cent across the entire hepatitis C population. The drugs are faster, less-invasive and inflict fewer side effects than anything currently available.
In a majority of cases the medicines can be taken orally, with treatment duration as short as eight weeks.
"Hepatitis C takes a heavy toll on patients and their families, but also the health system and the economy," Ms Ley said.
"It's therefore important we tackle this disease head on, and that includes providing these medicines to all Australians, particularly vulnerable populations where rates of infection are high."
Hepatitis Australia chief executive Helen Tyrrell said the government's decision was "simply fantastic".
"Christmas will be a particularly joyous time for many people now," she said. "The uncertainty is over and they now have the prospect of a truly happy and healthy 2016."
"This will be lifesaving for some people, and it will bring quality of life back to many more people."
The funding was fully accounted for in last week's mid-year budget update but was not announced at the time because confidential pricing negotiations with medicine suppliers were still being finalised, Ms Ley said.
The hepatitis C announcement comes on top of $620 million in new and amended medicine listings that were announced in the update.
Hepatitis C is an infectious blood-borne virus that attacks the liver. It can lead to cirrhosis, end-stage liver disease and liver cancer.
It has six different genotypes and kills an estimated 700 people a year, and debilitates thousands more.
Deaths from primary liver cancer, for which untreated hepatitis C is a major driver, are rising faster than for any other type of cancer.

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