New Pricing Marks Potential HCV Treatment Landscape Revolution

The advent of powerful new direct-acting antiviral drugs for the treatment of hepatitis C virus opened the door to unprecedented treatment response in a significantly shorter amount of time. The ability to cure HCV without lengthy, onerous treatment regimens enabled more patients to receive this essential treatment.

However, these drugs carry hefty list prices, with Sovaldi (sofosbuvir, Gilead Sciences) priced at $28,000 per bottle, Harvoni (ledipasvir/sofosbuvir, Gilead Sciences) at $31,500 per bottle and Viekira Pak/Viekira XR (ombitasvir/paritaprevir/ritonavir with dasabuvir, AbbVie) priced at $27,773.

With the recent FDA approval of AbbVie’s Mavyret (glecaprevir/pibrentasvir), the treatment landscape of DAA drugs for HCV may see a transformation. The drug, which is the first pan-genotypic HCV drug to be approved for an 8-week treatment duration, has been priced at $13,200 per bottle.

“This is the first time in my experience where, at least in the infectious disease world, pricing has become a market differentiator,” Michael S. Saag, MD, professor of medicine, Jim Straley Chair in AIDS Research and director of the Center for AIDS Research at the University of Alabama at Birmingham and Co-Editor in Chief of HCV Next, said in an interview. “We’ll see how that translates into what payers are actually paying.”

“What the market will bear”

In 2015, concerns over the high cost of Sovaldi prompted the Senate Finance Committee to launch a bipartisan, 18-month investigation into the pricing and marketing of Sovaldi and Harvoni. The investigation, led by Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and senior committee member Chuck Grassley, R-Iowa, concluded that the wholesale pricing of Sovaldi and Harvoni was arrived at based on a goal of maximizing revenue, with little regard for patient accessibility.

“Ultimately, the pricing seems to have been set at what the market will bear, and I guess that’s the way businesses run — they have a product and they see what they can sell it for,” Saag said. “In fact, if I were on the business side of this, I could argue that it would be corporate malpractice to not charge the most they could. It’s a fascinating intersection between business and public health.”

According to Mark Snyder, spokesperson for Gilead Sciences, the high drug prices that have generated controversy do not tell the whole story in terms of actual affordability or accessibility.

“Much of the scrutiny and dialogue regarding U.S. drug prices is largely focused on Wholesale Acquisition cost, or WAC, which is considered a ‘list price,’” Snyder told HCV Next. “WAC prices do not reflect the level of discounts provided to many payers, including commercial insurers. These discounts are driven by strong competition in the current health care system. Since the initial introduction of these drugs, as the market has evolved and become more competitive, net prices paid by most payers have been reduced by substantial discounts provided by manufacturers.”

Snyder attributed original pricing to being comparable to previous treatments: “Gilead responsibly and thoughtfully priced Harvoni and Sovaldi to be cost neutral compared to previous standards of care. Gilead’s decision to price a medical breakthrough at parity with previous standards of care is unusual and reflects the importance Gilead placed on patient access.”

Snyder said Gilead Sciences disclosed in February 2017 that the net price of Harvoni had decreased by more than 50% since its 2014 launch.

“In 2016, the average price for commercial payers had decreased to less than $15,000 per bottle, inclusive of rebates and discounts,” Snyder said. “For Medicaid, the average price had decreased to less than $10,000 per bottle in those states that provided open access regardless of fibrosis score. It’s also important to note that many patients can be cured in 8 weeks, meaning only two bottles are required for a full treatment course.”

Saag added, “Of note, the negotiated discounted prices are not available to providers, patients, or the public, resulting in an opaque system where only the payer and the drug company knows the true cost of medications.”

Yet according to the congressional report, Gilead underestimated the extent of the access restrictions that would result from its pricing of Sovaldi, which equaled $84,000 for a treatment course. These access restrictions have affected various patients and patient groups, Jagpreet Chhatwal, PhD, assistant professor at Harvard Medical School, told HCV Next.

“Over the past 2 or 3 years, we have seen restrictions based upon fibrosis stages and restrictions based on alcohol use or drug use, even when the scientific evidence says that these factors do not really matter,” Chhatwal said.

The high prices have placed a particular burden on Medicare, Medicaid and the Bureau of Prisons, which represent a large pool of patients with HCV despite very limited funding. Chhatwal said the overall effect of this pricing has been limited access to care for patients in need.

“Though the price of DAAs was deemed cost-effective by conventional health economics perspective, the budget needed to scale-up. HCV treatment was so high that we couldn’t afford to treat all patients in a given year,” he said.

Snyder pointed to a 2015 statement from CMS that instructed state Medicaid programs to lift unreasonable restrictions on access to HCV treatments though not all have followed through.

“After an initial wave driven by pent up demand, we have seen patient levels even out and costs become stable, yet state Medicaids and other payers are still refusing to lift restrictions,” he said.

Drug Pricing Evolution

According to Saag, drug prices have not always been excessively high. “Pricing for medications in the 1960s and ‘70s was, for lack of a better word, much more reasonable,” he said. “The companies made a profit, but the pricing was relatively affordable for most health systems.”

The 1987 introduction of ciprofloxacin, which was one of the first quinolone antibiotics to be available orally, led to the justification of pricing the drug at about $9 to $10 per pill. “Prior to that for an antibiotic, outpatient drug prices that high were unheard of,” he said. “The argument was that the drug should be priced higher because it took the place of IV therapy and people could go home with it,” he said.

When the antifungal agent fluconazole came into clinical use, its price was set similarly high. “It just seemed that once that barrier was broken, from the early 1990s on, the price of drugs has just skyrocketed,” Saag said. “This model of charging the most that a business could get away with became more the rule than the exception. We’re living under that plight as we speak.”

When direct-acting agents were introduced, the thinking was that these drugs offered a cure rather than disease management. Saag said sofosbuvir was initially priced at $84,000 per 12-week treatment course.

“That amount of money was staggering, but the justification from the company was that it was curing an infection, as opposed to, say, a disease like HIV, which costs on the order of $30,000 per year,” he said. “This HCV drug cures the infection for a person’s lifetime, and so it should be viewed as a ‘bargain.’ Yet the same drug would cost one-one hundredth of this price in Egypt, indicating that the cost of producing and distributing the drug is much, much lower than the WAC price in the U.S.”

Patients, clinicians and advocacy groups did not view this as a ‘bargain,’ Chhatwal said.

“It led to an outcry we’ve never seen in the past — patient advocates, policy advocates were worried about the drug pricing,” he said. “The reaction to the listed price of $1,000 for a single pill was so dramatic that it got everyone’s attention. If instead of 12 weeks and one-pill-a-day, the treatment regimen was 48 weeks with three-pills-day, the price of single pill would have been $83 at the total treatment cost of $84,000. Even though the total price did not change, people’s perception and reaction would have been different to $83 per pill vs $1,000 per pill.”

Snyder said Gilead pricing has also evolved: “Gilead has responded to the competitive market dynamics with discounts on its pan-genotypic 12-week treatment, Epclusa, making treatment costs comparable across HCV genotypes.”

Improving Access

One of the primary benefits resulting from Mavyret’s lower pricing is improved access to care, Chhatwal said.

“This will definitely increase access to care,” he said. “We are also hoping the restrictions imposed by payers will be lifted.”

Saag said with the cost of Mavyret, insurance companies and payers will be less reluctant to cover the drug.

“It’ll make insurance plans, or payment systems, more amenable to paying for the drug, especially for those who have asymptomatic infection with very little liver disease,” he said. “That group previously had been requiring a lot of paperwork and prior authorization to get treated because of the expense of the drugs, even at discounted prices. Now, with lower prices, I think that will start to disappear as a barrier.”

Chhatwal said in addition to increasing access to care, the availability of a lower-cost DAA is likely to bolster motivation for patients to get screened for HCV.

“What was happening in the past 2 or 3 years is people were coming forward for screening and they were being diagnosed, but then were told, ‘We cannot treat you because you are in the early stages.’ It doesn’t make sense,” he said. That wasn’t a good incentive for other people to go and get screened.”

Chhatwal said as the lower price makes the drug available to significantly more patients, improvements will be seen in outpatient screening rates.

He also cited cost-effectiveness studies that have found that at such low prices, treatment with new oral DAAs is not just cost-effective, but cost-saving.

“By providing treatment at current costs, patients’ lives will be improved, and the overall costs of care will be reduced, because of savings from preventing downstream events such as liver cancer and transplant,” he said. “We recently conducted a systematic review of several modeling studies. At a price of $20,000, more than 90% of these published studies found DAAs to be cost-effective/cost saving.”

The Eradication Goal

Saag said while the lower price of Mavyret will definitely have a positive impact, he would have liked to see stronger action taken to make HCV care widely accessible. He cited Australia’s 2015 allocation to pay a fixed price of a little less than $1 billion over 5 years to cover the cost of treating as many HCV patients as they can identify. Since the drugs are paid for in advance, all HCV patients in Australia will be treated, regardless of age or how they contracted HCV, Saag explained.

“This encourages all providers to find and test as many people who have HCV as they can, and to get them into therapy while this 5-year window of opportunity is available,” Saag said. “Patients are encouraged to get tested because it won’t cost them anything; the health system has already paid for the drugs using this lump sum agreement. Theoretically, Australia could eradicate hepatitis C from their continent, simply by adopting a public health-based policy like that.”

He said although the pricing of Mavyret is unlikely to bring about change on that scale, it is a good first step.

“The barriers of acquiring prior authorizations and encountering other obstacles to drug access should get better as the price comes down,” he said. “We don’t have the advantage that Australia does in having a public health solution that would help us in that way, but maybe one day.” – by Jennifer Byrne

Disclosures: Chhatwal has received research grants to his institution from Merck and Gilead and served as consultant to the World Health Organization, Department of Health and Human Services, Merck, Gilead, Complete HEOR Solutions and IQVIA. Saag reports receiving research support and acting as a scientific advisor to Bristol-Myers Squibb, Gilead, Merck and ViiV. Snyder is an employee of Gilead Sciences.

The advent of powerful new direct-acting antiviral drugs for the treatment of hepatitis C virus opened the door to unprecedented treatment response in a significantly shorter amount of time. The ability to cure HCV without lengthy, onerous treatment regimens enabled more patients to receive this essential treatment.

However, these drugs carry hefty list prices, with Sovaldi (sofosbuvir, Gilead Sciences) priced at $28,000 per bottle, Harvoni (ledipasvir/sofosbuvir, Gilead Sciences) at $31,500 per bottle and Viekira Pak/Viekira XR (ombitasvir/paritaprevir/ritonavir with dasabuvir, AbbVie) priced at $27,773.

With the recent FDA approval of AbbVie’s Mavyret (glecaprevir/pibrentasvir), the treatment landscape of DAA drugs for HCV may see a transformation. The drug, which is the first pan-genotypic HCV drug to be approved for an 8-week treatment duration, has been priced at $13,200 per bottle.

“This is the first time in my experience where, at least in the infectious disease world, pricing has become a market differentiator,” Michael S. Saag, MD, professor of medicine, Jim Straley Chair in AIDS Research and director of the Center for AIDS Research at the University of Alabama at Birmingham and Co-Editor in Chief of HCV Next, said in an interview. “We’ll see how that translates into what payers are actually paying.”

“What the market will bear”

In 2015, concerns over the high cost of Sovaldi prompted the Senate Finance Committee to launch a bipartisan, 18-month investigation into the pricing and marketing of Sovaldi and Harvoni. The investigation, led by Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and senior committee member Chuck Grassley, R-Iowa, concluded that the wholesale pricing of Sovaldi and Harvoni was arrived at based on a goal of maximizing revenue, with little regard for patient accessibility.

“Ultimately, the pricing seems to have been set at what the market will bear, and I guess that’s the way businesses run — they have a product and they see what they can sell it for,” Saag said. “In fact, if I were on the business side of this, I could argue that it would be corporate malpractice to not charge the most they could. It’s a fascinating intersection between business and public health.”

According to Mark Snyder, spokesperson for Gilead Sciences, the high drug prices that have generated controversy do not tell the whole story in terms of actual affordability or accessibility.

“Much of the scrutiny and dialogue regarding U.S. drug prices is largely focused on Wholesale Acquisition cost, or WAC, which is considered a ‘list price,’” Snyder told HCV Next. “WAC prices do not reflect the level of discounts provided to many payers, including commercial insurers. These discounts are driven by strong competition in the current health care system. Since the initial introduction of these drugs, as the market has evolved and become more competitive, net prices paid by most payers have been reduced by substantial discounts provided by manufacturers.”

PAGE BREAK

Snyder attributed original pricing to being comparable to previous treatments: “Gilead responsibly and thoughtfully priced Harvoni and Sovaldi to be cost neutral compared to previous standards of care. Gilead’s decision to price a medical breakthrough at parity with previous standards of care is unusual and reflects the importance Gilead placed on patient access.”

Snyder said Gilead Sciences disclosed in February 2017 that the net price of Harvoni had decreased by more than 50% since its 2014 launch.

“In 2016, the average price for commercial payers had decreased to less than $15,000 per bottle, inclusive of rebates and discounts,” Snyder said. “For Medicaid, the average price had decreased to less than $10,000 per bottle in those states that provided open access regardless of fibrosis score. It’s also important to note that many patients can be cured in 8 weeks, meaning only two bottles are required for a full treatment course.”

Saag added, “Of note, the negotiated discounted prices are not available to providers, patients, or the public, resulting in an opaque system where only the payer and the drug company knows the true cost of medications.”

Yet according to the congressional report, Gilead underestimated the extent of the access restrictions that would result from its pricing of Sovaldi, which equaled $84,000 for a treatment course. These access restrictions have affected various patients and patient groups, Jagpreet Chhatwal, PhD, assistant professor at Harvard Medical School, told HCV Next.

“Over the past 2 or 3 years, we have seen restrictions based upon fibrosis stages and restrictions based on alcohol use or drug use, even when the scientific evidence says that these factors do not really matter,” Chhatwal said.

The high prices have placed a particular burden on Medicare, Medicaid and the Bureau of Prisons, which represent a large pool of patients with HCV despite very limited funding. Chhatwal said the overall effect of this pricing has been limited access to care for patients in need.

“Though the price of DAAs was deemed cost-effective by conventional health economics perspective, the budget needed to scale-up. HCV treatment was so high that we couldn’t afford to treat all patients in a given year,” he said.

Snyder pointed to a 2015 statement from CMS that instructed state Medicaid programs to lift unreasonable restrictions on access to HCV treatments though not all have followed through.

“After an initial wave driven by pent up demand, we have seen patient levels even out and costs become stable, yet state Medicaids and other payers are still refusing to lift restrictions,” he said.

PAGE BREAK

Drug Pricing Evolution

According to Saag, drug prices have not always been excessively high. “Pricing for medications in the 1960s and ‘70s was, for lack of a better word, much more reasonable,” he said. “The companies made a profit, but the pricing was relatively affordable for most health systems.”

The 1987 introduction of ciprofloxacin, which was one of the first quinolone antibiotics to be available orally, led to the justification of pricing the drug at about $9 to $10 per pill. “Prior to that for an antibiotic, outpatient drug prices that high were unheard of,” he said. “The argument was that the drug should be priced higher because it took the place of IV therapy and people could go home with it,” he said.

When the antifungal agent fluconazole came into clinical use, its price was set similarly high. “It just seemed that once that barrier was broken, from the early 1990s on, the price of drugs has just skyrocketed,” Saag said. “This model of charging the most that a business could get away with became more the rule than the exception. We’re living under that plight as we speak.”

When direct-acting agents were introduced, the thinking was that these drugs offered a cure rather than disease management. Saag said sofosbuvir was initially priced at $84,000 per 12-week treatment course.

“That amount of money was staggering, but the justification from the company was that it was curing an infection, as opposed to, say, a disease like HIV, which costs on the order of $30,000 per year,” he said. “This HCV drug cures the infection for a person’s lifetime, and so it should be viewed as a ‘bargain.’ Yet the same drug would cost one-one hundredth of this price in Egypt, indicating that the cost of producing and distributing the drug is much, much lower than the WAC price in the U.S.”

Patients, clinicians and advocacy groups did not view this as a ‘bargain,’ Chhatwal said.

“It led to an outcry we’ve never seen in the past — patient advocates, policy advocates were worried about the drug pricing,” he said. “The reaction to the listed price of $1,000 for a single pill was so dramatic that it got everyone’s attention. If instead of 12 weeks and one-pill-a-day, the treatment regimen was 48 weeks with three-pills-day, the price of single pill would have been $83 at the total treatment cost of $84,000. Even though the total price did not change, people’s perception and reaction would have been different to $83 per pill vs $1,000 per pill.”

PAGE BREAK

Snyder said Gilead pricing has also evolved: “Gilead has responded to the competitive market dynamics with discounts on its pan-genotypic 12-week treatment, Epclusa, making treatment costs comparable across HCV genotypes.”

Improving Access

One of the primary benefits resulting from Mavyret’s lower pricing is improved access to care, Chhatwal said.

“This will definitely increase access to care,” he said. “We are also hoping the restrictions imposed by payers will be lifted.”

Saag said with the cost of Mavyret, insurance companies and payers will be less reluctant to cover the drug.

“It’ll make insurance plans, or payment systems, more amenable to paying for the drug, especially for those who have asymptomatic infection with very little liver disease,” he said. “That group previously had been requiring a lot of paperwork and prior authorization to get treated because of the expense of the drugs, even at discounted prices. Now, with lower prices, I think that will start to disappear as a barrier.”

Chhatwal said in addition to increasing access to care, the availability of a lower-cost DAA is likely to bolster motivation for patients to get screened for HCV.

“What was happening in the past 2 or 3 years is people were coming forward for screening and they were being diagnosed, but then were told, ‘We cannot treat you because you are in the early stages.’ It doesn’t make sense,” he said. That wasn’t a good incentive for other people to go and get screened.”

Chhatwal said as the lower price makes the drug available to significantly more patients, improvements will be seen in outpatient screening rates.

He also cited cost-effectiveness studies that have found that at such low prices, treatment with new oral DAAs is not just cost-effective, but cost-saving.

“By providing treatment at current costs, patients’ lives will be improved, and the overall costs of care will be reduced, because of savings from preventing downstream events such as liver cancer and transplant,” he said. “We recently conducted a systematic review of several modeling studies. At a price of $20,000, more than 90% of these published studies found DAAs to be cost-effective/cost saving.”

The Eradication Goal

Saag said while the lower price of Mavyret will definitely have a positive impact, he would have liked to see stronger action taken to make HCV care widely accessible. He cited Australia’s 2015 allocation to pay a fixed price of a little less than $1 billion over 5 years to cover the cost of treating as many HCV patients as they can identify. Since the drugs are paid for in advance, all HCV patients in Australia will be treated, regardless of age or how they contracted HCV, Saag explained.

PAGE BREAK

“This encourages all providers to find and test as many people who have HCV as they can, and to get them into therapy while this 5-year window of opportunity is available,” Saag said. “Patients are encouraged to get tested because it won’t cost them anything; the health system has already paid for the drugs using this lump sum agreement. Theoretically, Australia could eradicate hepatitis C from their continent, simply by adopting a public health-based policy like that.”

He said although the pricing of Mavyret is unlikely to bring about change on that scale, it is a good first step.

“The barriers of acquiring prior authorizations and encountering other obstacles to drug access should get better as the price comes down,” he said. “We don’t have the advantage that Australia does in having a public health solution that would help us in that way, but maybe one day.” – by Jennifer Byrne

Disclosures: Chhatwal has received research grants to his institution from Merck and Gilead and served as consultant to the World Health Organization, Department of Health and Human Services, Merck, Gilead, Complete HEOR Solutions and IQVIA. Saag reports receiving research support and acting as a scientific advisor to Bristol-Myers Squibb, Gilead, Merck and ViiV. Snyder is an employee of Gilead Sciences.