Harvoni’s Budget Impact Will Be Huge

[Hep Editors]

In most cases, Harvoni (ledipasvir/sofosbuvir) is actually more cost effective when compared with older hepatitis C treatments… But that doesn’t mean treating all of those in need won’t be stratospherically expensive:

Researchers recently estimated that 1.6 million people will be eligible for hep C treatment during the next five years. Paying for all their treatment would cost insurers $136 billion.

For more information: www.hepmag.com/articles/Harvoni_cost_effectiveness_2501_26971.shtml

[Mike]

The problem is that there are not a infinite amount of medical treatment dollars available, which are needed to cover the entire disease spectrum.

Applying $136 billion scarce medical dollars to one disease, means that these dollars are shifted from other disease treatments.

This is why insurers - both public and private - are requiring specific criteria and a clear an immediate need-to-treat prior to authorization.

Until the cost per HCV treatment significantly decreases, this will not change in the near future.

Mike

[BubbaT]

Hey mike, what does a liver transplant cost?  Relative to Harvoni?

For years many people have waited for an effective drug to become available to even consider treatment of hcv, I waited 20 yrs myself, I'm sure the millions of people infected are just now wanting to be treated, so really this virus has not seen near the amount of dollars as hiv has.

[Lynn K]

I guess a part of the discussion is that for hep c I have read only about 20% advance to cirrhosis and of that group 20% develop HCC.

But that means 80% don't develop cirrhosis. We have seen many here on forum who estimate they have had hep c for decades but are F0 and F1. Some of us have not been as fortunate for what ever reason. Some have been drinking not knowing the had hep c and developed cirrhosis that was how they learned about having hep c when they developed symptoms of cirrhosis. Some maybe for whatever reason but I would think genetics the Hep c was able to do more damage to them than the next person.

So makes it hard to argue that a 60 year old who has had hep c since the 70's with F0 fibrosis how much do we need to treat this patient in light of not unlimited medical dollars in the world. Hard to answer.

Hi Bubba

I have heard a transplant costs about half a million depending on where give or take. But then there are all the medical expenses for the patient as they become sicker and sicker over time while waiting for the transplant. Plus anti rejection drugs for life and if there were any post surgery complications those would also add to the overall cost for one patient who needs a transplant.

[Mike]

One of the issues with HCV is that there have been millions warehoused (myself included), waiting for advancements in treatment.

That day has arrived and effective, well-tolerated treatments are now available. The HCV floodgate has opened and everyone wants to be treated.

The problem is the cost per treatment in relationship to the number of people requesting treatment.

Simply put, there are not enough healthcare dollars available to meet the demand.

In response, private and public insurers have to prioritize treatment, which means treat the sickest first. This is what is occurring now.

As Lynn noted, 80% of those infected with HCV do not have symptoms, do not have any significant liver disease and may never experience any issues other than carrying the virus.

Because of this, a significant number of HCV infected do not need treatment at this point, and can safely wait until the cost of treatment comes down.

I personally would like to see everyone treated; but the reality is there are not enough medical dollars currently available to meet this charge.

As treatment costs decrease more and more people will be treated.

Best wishes, Mike

[charly8]

These issues always come about when there is a lack of a free market.  We do not have a free market in the US when it comes to healthcare and medication. 

Only a free market can best allocate the limited resources available with the demand for a good or service.

1. The overuse of insurance is an issue.  Tax laws and gov. incentives have resulted in an overuse of insurance.  How can there be a downward price pressure on the goods when nobody pays out of pocket?  There is virtually unlimited demand when you are insured because at that point the services are free or copays capped.  Providers can charge exorbitant fees because the insurance pays it.

2. The regulatory nature of our healthcare is too much and drives up costs.  The FDA is often too restrictive and overly conservative and drives up costs.  How many billions does it take to get Harvoni to market?  And all that is at a risk because it could not work.  The venture capital costs are absorbent and high risk investments therefore people want high rates of return for these investments.

There are no government solutions to these problems.  If the gov pays the prices it encourages higher prices and higher demand. i.e. spiraling out of control costs.   If they price cap the goods and services than they will not be provide (i.e. no profit) and life saving drugs like Harvoni would have never been developed.

[Mike]

We actually do have a free market; however, healthcare, like utilities are non-elastic products and the producer sets the price. Simply put, it's not like you can tell the company that makes pace makers to go screw themselves and you'll get the product elsewhere or tell the electric company, no thanks I'll purchase your product from another vendor. As a consumer, you are free to do so if you choose.  But lots of luck finding an alternative.

Thus, with non-elastic products the market is cornered, which directly impacts supply & demand.

With HCV treatment, there are a limited number of people that will ever need the product (3.6 million in the US). With cure rates heading towards 100%, the company has a limited window to recover R&D costs and extract a profit. They only have X number of potential customers and than the bottom falls out in the market.

Pure free market capitalism at work.

Mike