BBV Review

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An interview with Dr Jordan Feld, The challenge for hepatitis C drug cost effectiveness

Today, in contrast to Interferon therapy the new direct acting antivirals (DAAs)  for HCV can cure patients much faster, with fewer adverse effects, but their cost presents a big challenge to global health systems so what is best solution for this problem?

The challenge for hepatitis C drug cost effectiveness. A new model/hypothesis proposed by Dr Jordan Feld.

Today, in contrast to Interferon therapy the new direct acting antivirals (DAAs) for HCV can cure patients much faster, with fewer adverse effects but their cost presents a big challenge to global health systems so what is best solution for this problem?

One subject which is often misunderstood but key to the introduction of new therapies is their cost effectiveness. This is frequently confused with cost saving so understanding the difference is essential.

Cost effective therapy means you get value for money. It does not mean that it saves money! Many pharmaceutical companies say if governments do not pay for therapies now they will cost more in the future. This is actually not correct. When making a cost effectiveness analysis (which is not simple to do) with all the downstream costs taken into account a model can be created based on what happens if somebody is treated, what happens if the treatment is successful, what happens if it is unsuccessful, what happens if they remain untreated and if they develop complications?

One of the issues with HCV which is often forgotten is that you get good value for the money if you prevent patients ending up with liver transplant but on the flip side you may treat somebody who has a very mild stage fibrosis, no clinical manifestations and no complications of the disease and would not develop any complications even if left untreated. If this the case you have spent a lot of money on HCV therapy and arguably you gain very little in terms of health benefit as measured in quality adjusted life years or life burden.

When calculating the cost effectiveness you basically take the total cost divided by total benefit. So if you had zero benefit whatever money you spend it is effectively a waste of money.

Obviously for some people there is a huge benefit and for others there is no benefit. However on average, if something is cost-effective, you get very good value for the money that you spent.

This is usually referred to as incremental cost effectiveness ratio which is effectively how much it costs above what one is current spending to get a benefit.

It is understood that most things cost more than doing nothing. It is very unusual to actually recoup and save when something is done, although there are things in medicine for which this is true. For example, we have shown that screening for hepatitis B prior to immune- suppressive chemotherapy is actually cost saving. This is because for most people the cost and benefit is small, however, in a few people the overall benefit is so huge, which more than covers the costs of all of the negative testing

Hepatitis C is more complicated however as it is very important to remember that for the most part, in terms of the direct medical costs, none of the therapies which have been developed are actually cost saving.

They are still cost effective which is based on, as a society, how much we are prepared to spend for certain health benefit. Most countries this as percentage of their GDP or they benchmark it against some other type of health parameter for which they are willing to pay. e.g. the cost of dialysis, This is something which is considered reasonable to pay for all people with chronic kidney disease. Typically in the US and Europe this number comes to $50,000/ quality-adjusted life year (QALY) while in other countries it can vary considerably. When we compared this to the treatment of Hepatitis C, all therapies including IFN-free therapy appear cost effective due to the higher rate of cure, fewer side effects and the need for less monitoring, so their incremental cost effectiveness ratio usually results in around $20-40K/QALY. There are lots of specific assumptions in any of these models.

For expensive drugs such as Sofosbuvir one has to remember that the $80K cost of drug is only one factor in cost effectiveness analysis equation as you get downstream savings such avoidance of cancer. To get a better picture of the true cost benefit of intervention you need to consider the likely additional costs which would be incurred due to other complications if no treatment was given.

Most studies which have been done to date show that even a therapy such as Sofosbuvir which is very expensive is still cost effective with a QALY of $30-40K. This is a value judgment that society needs to decide if they are willing to pay for.

The important point is that it still costs money when taking into account the downstream complications. The argument that we save money by treating everybody is incorrect and not probably true with any type of HCV therapy. Of course, this is just an economic argument – there are other benefits to curing someone from HCV such as reduced mild symptoms and peace of mind, things that are very difficult to ‘monetize’ and do not generally figure into these cost-effectiveness discussions.

Another challenge people often forget is the budget impact. Something maybe very cost effective, but the health system cannot afford it. The reason for this could be because it is a common disease. E.g. if everybody needed to spend even a nominal amount like $10, the cost for the whole society would be in the billions of dollars cost and something the health systems may not be able to manage because the total cost is unaffordable.

One of the challenges with these new therapies, even if their cost effectiveness is accepted and is something we as a society value for its health benefit, we then have to decide how do we allocate the cost. Do we spend all that money upfront or do we partition that over time and try to spread out the cost? This is one of the reasons for some much uproar about the costs of these new treatments.

Putting this into context with someone having HIV, the annual treatment cost is about $18K in a chronically infected individual so treating them for ten years it is $180K. Even after 10 years, the annual treatment cost is still 18K and you still have an infected person. The overall cost is greater than curing an individual with HCV. However, there is a big difference! The cost is spread of ten years which is of huge importance for payers.

We suggest the use of models where cost of therapy was amortized, meaning it is spread over a period of time. E.g. Payers pay for Sofosbuvir or any other expensive drugs, but pay it over the next ten years. This is not the case with a borrower who could default on the payment. We are talking of governments or healthcare plans, insurance companies. The disadvantage to those governments is that they might say we need to spend millions or maybe billions for hepatitis C care. If we spend all that money in 2015-16 it is going to bankrupt our healthcare system, but if we spread that over the next 10 years, it is manageable (or at least more manageable. There are 2 ways to accomplish this – treat now and pay for it slowly or the alternative to that is to prioritize certain patients now and treat others later. This is fine as long as you are not a patient who does not get treated. It is accepted that the sickest people should get treatment first. The downside of this scenario is that patients are sitting in my office today, have moderate fibrosis, but are “not sick enough” to get treated. This scenario happens every day all over the world and the patients think I may not die of my liver disease today but I have consequences to my life such as fatigue which interfere with my social interactions, cause me anxiety and panic attacks and reduce my productivity. I may also be worried about missing follow-up appointments and then come back in 5 years to learn I have cirrhosis which may lead to liver cancer. All these things happen in real life!

With the efficacy of therapies now, ideally we would treat anyone who comes into our office, but for governments and payers it is really hard to do if everybody gets treatment at the same time.

Thinking about alternative approaches is critical. Although it’s not standard currently, the idea of amortizing the costs is particularly attractive. We treat patients now and we pay for the drugs over the next 10-15 years.

There is benefit for industry here as well. E.g a pharma company provides drugs for everybody to get treated and a government pays over the next ten years. This gives confirmed income however the company has another advantage that in the event a new drug comes along, many patients are already signed up with their previous formulation and thereby receive guaranteed reimbursement. So it is a win-win. The government as payer wins as they do not have to pour in resources all at once and can spread the cost over a period of time, patient gets treatment early when they want to be treated and the pharmaceutical industry gets guaranteed income for their investment and increase sells at the time when they have the best product on the market.

This model has never been tried by I have been encouraging people to try it out.

Cost of monitoring and diagnostics.

As for the cost of diagnostics it really depends on the region. In wealthy countries the cost of diagnostics is relatively insignificant, even if we do intensive weekly HCV RNA viral load testing in patients treated with Sofosbuvir and Ledipasvir (Harvoni) at a cost of $120 per test the total cost for 12 weeks would be less than $1500. With a therapy which costs almost $90K, $1500 is insignificant and does not affect the overall costs. However in regions of the world where the drugs are heavily discounted, it is conceivable that HCV RNA monitoring and diagnostics in general could be more expensive than the therapy. We need inexpensive diagnostic and monitoring tools if treatment is really going to spread globally.

The cost of viral load measurement (VLM) in future therapy regimen.

We need to do at least a base line test followed by a week 4 test. A week 2 test maybe more predictive but at least 1 VL measurement is needed as a proof of adherence or we may have another test such as core antigen testing that could achieve this but currently, it is important to confirm adherence with at least 1 test.

There is an argument saying the antigen test may not be sensitive enough but you do not really need a sensitive test?

Say everybody is positive at baseline and you test during the treatment they go from positive to negative it means they are taking their drug. It does not really matter if they are 15 or 100 IU/ml but whether they are taking their drugs.

If they go to negative it may be enough to confirm SVR, but I am sure that at least one VLM will be used as confirmation or SVR in the Western world.

However the testing becomes a major issue in RLS. E.g. assume in Egypt Sofosbuvir costs $900, if you do 3 VLM tests you increase the total cost by a third, which means if you have 100,000 patients a third of cost for treatment will be the cost of diagnostics, so there is huge need in middle and low income countries for cheap and cost effective diagnostics. Core antigen testing maybe the one but there are likely other better alternatives.

In this respect a qualitative test would be enough. For Sofosbuvir with a six million copies/ml threshold we need at least a quarter of half a log. If we test a patient today and he has 5.6 million, the week after you have 6.2 million. Do we then extend the therapy for another 4 weeks at enormous cost?

The challenge when you are using therapy is that there are lots of things you have to think about. Cost of therapy is not the only factor. It is not to try to justify the costs. We do believe the costs of new drugs are high, but I think they are still cost effective. This does not mean they are cost saving.

In order for governments to pay for patients during short period of time they need to either spread the cost in one way or another or to prioritize patients. In most countries they will probably choose prioritization route and say we will only treat patients with liver fibrosis stage 3-4. This is a shame. With a bit of creativity, we could spend the same money and benefit a lot more people.

This will change. The future looks very bright. It is important to figure out how best to manage expectations and to think of new strategies. We cannot repeat what we have done in the past. If we are creative, we can find ways to maximize the health gains and minimize the costs and in the next 20-30 years we will eliminate HCV from low prevalence countries and make a huge dent in high prevalence countries.

Article Info

  • Authors:

    Dr Jordan Feld MD, PhD

  • Affiliation:

    Toronto Western Hospital Liver Center University Health Network
    Sandra Rotman Centre for Global Health

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