DRUG PRICING & CHALLENGES TO HEPATITIS C TREATMENT ACCESS – PMC
ii. case study
hepatitis c will be used as a case study to understand how biotechnology led to problems of high health care spending and limited access to care within the united states. hepatitis c is among the leading causes of death in the united states.9 in the united states, 3.7 million people are infected with chronic hepatitis c.10 chronic hepatitis c infections can be lifelong and cause problems serious liver diseases, such as cirrhosis and cancer.11 the death rate from hepatitis c is increasing. in 2007 alone, 15,106 people died from hepatitis c in the united states.12 finally, not all hepatitis c infections are the same. there are six different genotypes of hepatitis c, and some are more aggressive or resistant to treatment.13
Historically, hepatitis C treatment has been lengthy and included multiple serious side effects.14 however, new innovations in hepatitis C treatment have revolutionized care. In December 2013, Sovaldi (Sofosbuvir) and Olysio (Simeprevir) were approved by the US Food and Drug Administration.15 The chemical composition of Sovaldi and Olysio is different from traditional medicines in that they are biologics. 16 biological products are derived from living organisms, and in the case of sovaldi and olysio, produced through biotechnology. biotechnological production involves the use of a living system to manufacture a medicine.17 Biological medicines also fall into a different regulatory category than traditional medicines.18
Reading: How expensive is hcv treatment drug pricing outside of insurance
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both sovaldi and olysio are prescribed in combination with other medications to complete antiretroviral therapy for hepatitis c.19 these medications were the first interferon-free oral treatments with minimal side effects for hepatitis c.20 this is innovative because many patients could not tolerate side effects or were co-prescribed interferon from prior hepatitis c treatments.21 while both sovaldi and olysio have transformed hepatitis c treatment, sovaldi has been shown to be superior. sovaldi has been shown to have a cure rate of over ninety percent in some populations.22 in addition, sovaldi has been shown to be effective across all genotypes of infection.23 olysio is slightly less effective than sovaldi, as it is not recommended to treat hepatitis C genotype 1a. 24 however, like sovaldi, olysio is more effective, better tolerated, safer, and requires a shorter duration of treatment than previous treatments.25
The downside of these revolutionary drugs is that they are extraordinarily expensive for the US healthcare system. just one sovaldi pill costs approximately $1,000.26 this brings the total cost of twelve weeks of treatment to $84,000.27 olysio has an estimated cost of $23,600 per month of treatment.28 however, the duration of treatment with olysio is even longer than with sovaldi at twenty-four to forty-eight weeks.29 while this is very expensive, the main problem with the price is not just the price, but the combination of the price and the large number of people who have been prescribed the drug. spending in 2014 on sovaldi accounted for seventy-eight percent of all spending on hepatitis c antiviral drugs.30
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The high costs associated with sovaldi reflect a combination of the large size of the population treated, the drug’s high cost, and how it has dominated the market due to its superior effectiveness. Total health care spending on Sovaldi, in just one year, was $6.5 billion, making it the highest-spending drug in the United States in 2014.31 Of this, Medicare’s share of this spending it was $4.5 billion.32 the cost of treating the total population of 3.7 million chronically infected hepatitis c patients in the united states with sovaldi, at an estimated rate of $84,000 per patient, would be $310 billion. For comparison, total US spending on all medicines for 2014 was $360.7 billion.33 At this cost, treating all chronically infected hepatitis C patients in the US with Sovaldi is unaffordable. .
These high costs of innovative hepatitis c treatments have led to limits on access to treatment for patients with chronic hepatitis c. There have been reports of some insurers denying coverage for Sovaldi altogether or only approving the drug after a patient has documented fibrotic changes in the liver. for the drug.35 however, most of these patients were later approved.36 The disparity between initial and later approval of sovaldi suggests that some insurance companies have developed an overly aggressive prior authorization system to limit spending on sovaldi. however, this strategy appears to be more widely used in the private insurance sector, as medicare and medicaid patients were more likely to be initially approved.37 however, even medicare has become more restrictive in coverage determinations.38 Medicaid has also instituted strict restrictions on access to Sovaldi.39 A recent review found that these limitations restricted patients’ access to Sovaldi beyond what is recommended by professional organizations.40 Additional restrictions for Medicaid patients include the requirement for referral to a specialist and abstinence from alcohol.41 these restrictions limit access to sovaldi. people struggling with alcohol use disorder and people living in rural areas who may not have access to a specialist who accepts medicaid.
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