There are some highly favorable and unique aspects to the new treatments. For example, they are highly effective and for the majority of patients, the efficacy is beyond 90%.
With the older drugs, the efficacy was really low, at around 40% to 75%, depending on the HCV genotype. In some patients it was even lower.
The duration of treatment is also lower with the new treatments and has dropped from 48 weeks to 8 or 12 weeks for the majority of patients.
The most beneficial aspect of the new treatments is the lack of side effects. The new therapies are associated with almost no major side effects, whereas the older therapies were often associated with very severe side effects.
How much do the new drugs cost and how does this compare to the older drugs?
This has become a real issue; the cost has been highlighted so much in the media and by the medical community. The price of the new treatments was initially $1,000 for one day, which translates as $84,000 for twelve treatments, before any discounts.
That was the price in the U.S., but the price varies in other countries and is a little lower in the UK. The older, interferon-based therapies cost much less – around half that price.
Do you think enthusiasm for the new drugs has been dampened by their costs?
Yes, given that we have so many patients to treat in the U.S. and most of the providers do not have sufficient budgets to treat everybody. That means restrictions are placed on patients in terms of who receives therapy and who has to wait for treatment, which is causing patients to suffer.
Are new treatments for HCV cost-effective?
The objective of our recent research was to find out how cost effective the new treatments are and we found that for the majority of patients, these treatments are cost effective.
The analysis involved accounting for the discounts that were given to U.S. payers last year. Gilead, the manufacturer of these drugs, recently announced even higher discounts and those discounts will mean these drugs are going to be highly cost effective.
Would that cost effectiveness apply in the long-term?
If we look at the lifetime horizon, patients would benefit in the long run by avoiding adverse outcomes such as hepatocellular carcinoma, end-stage liver disease and the need for transplant.
What would be the budget impact of treating all eligible patients with HCV in the United States?
The research that was published was based on last year’s prices and we found that if we treated everybody who has insurance and is a candidate for treatment, it would cost $136 billion dollars over the next five years, which is a huge amount for any payer.
That cost is $65 billion dollars more than the cost of the older therapies. The cost-offsets resulting from avoiding adverse outcomes would be $16 billion only.
Our analysis shows that these drugs would not save overall healthcare money, but would add to the budget. When something is cost effective, it does not necessarily mean it is going to save money. It essentially implies that we're willing to spend additional money to gain additional benefits.
What is the reason these new drugs are so expensive?
The general trend in the pharmaceutical industry is to price new treatments higher than previous therapies to reflect the fact that the new therapies are going to be highly favorable over the previous ones.
Do prices generally come down over time?
This year, the prices have gone down. In the U.S., the price is mainly reduced through the discounts that are offered to insurance payers.
Gilead announced that they will allow an average discount of around 46% this year. However, the actual discounts are never disclosed to the public and it can be very difficult for researchers like us to evaluate the true cost effectiveness of treatment.
What were the main conclusions of your recent review of the published literature?
The main conclusion was that these drugs are cost effective, but the budget is so huge that it would be unaffordable to many payers.
One obvious way to solve the problem is to reduce the cost, but that's not sufficient. We need additional resources from the government so that more people can be treated.
For example, multiple resources are available for people with HIV. For a disease like Hepatitis C, it makes sense to provide resources for treatment. This is a one-time treatment and there's no need for a continuously recurring budget.
What do you think the future holds for the newer regimens and patients with HCV?
The future looks very bright, with more drugs becoming available on the market. We expect that prices will further reduce, which is going to help patients. It's also possible that therapies with an even shorter treatment duration, of less than 8 weeks, will be introduced.
Where can readers find more information?
Our paper can be found in Annals of Internal Medicine:
Chhatwal J, Kanwal F, Roberts MS, Dunn MA. Cost-Effectiveness and Budget Impact of 
Hepatitis C Virus Treatment With Sofosbuvir and Ledipasvir in the United States. Ann Intern Med. 2015;162:397-406. doi:10.7326/M14-1336
http://annals.org/article.aspx?articleid=2197176
About Dr Chhatwal
Jag Chhatwal is an assistant professor of health services research at MD Anderson Cancer Center, Houston, USA. His research informs health policies and clinical decision-making by using mathematical modeling. He is working on the cost-effectiveness of cancer prevention programs and treatments including liver, anal, and breast cancers.
Exploring the global health challenge of hepatitis D