HCV FORECAST 2015: New Approvals, Continued Barriers to Care
We are ahead of schedule in terms of release of direct-acting agents (DAAs) and the abandonment of interferon therapy, which in essence is now a reality.
I remember a conversation I had with Co-chief Medical Editor of HCV Next, Ira M. Jacobson, MD, in 2012. We had a friendly discussion about whether interferon would actually be needed or not to cure hepatitis C infection. There was equipoise around that question — about whether interferon was acting as an immune modulator that was essential to clearing the virus, or whether interferon was an antiviral such that when other antivirals are developed they can be effective without the use of interferon and whatever immune modulation that’s required from interferon is adequately provided, you could get sufficiently from endogenous interferon produced by the host.
Michael S. Saag
That question now has been resoundingly answered in the affirmative — that you don’t need interferon to be administered through injection at all.
That’s a huge step forward, and we both thought that the day when we would jettison interferon, if such was the case, it probably wouldn’t happen until late 2015 or early 2016 at the earliest. What we didn’t anticipate fully was the speed of approvals and the ability of companies to get their DAA drugs to market.
That’s a tribute to drug companies and their efforts putting this all together, but also a tribute to the US Food and Drug Administration, which gave appropriate leeway and approval pathways that did not require comparative studies against interferon and allowed crossover designs that did not require long exposure to placebos to get this done.
We can now get down to the reality of what’s coming along. There are fortunately still multiple agents that will likely be approved in the next 12 to 18 months.
I think it’s likely that daclatasvir (Bristol-Myers Squibb) will be approved in the next 6 months. That will help a lot with genotype 1 as an alternative to ledipasvir (Gilead) but I think it will be more helpful in other genotypes such as genotype 3 and perhaps genotype 2. Getting that drug out there will improve treatment options and create more competition.
The newer second-generation drugs are coming along. These drugs are pan genotypic and will enable more versatility in treatment, at least that’s the promise from them. These are among the most exciting developments we are anticipating in the coming 18 months.
With such a large number of these agents making it through [to patients] and being proven to be safe, effective and having similar efficacy that we see with the existing approved drugs, we end up with a world of choices that we can select from to treat patients.
All vs. Some Patients
How does this array of choices play out in the marketplace? How does this balance ultimately equilibrate between the pharmaceutical companies that are investing between $1 to $1.5 billion per drug and their need to satisfy shareholders in terms of profit and vs., on the other hand, the payers who are obliged to not just treat some patients with hepatitis C but also all patients?
In the US, we have 3 to 4 million people who are infected with hepatitis C and the guidelines clearly indicate that all patients with chronic hepatitis C (unless they have a terminal condition from something else that puts them at risk of dying in the next year) should be treated for hepatitis C to achieve a cure regardless of their fibrosis state. That’s a clear statement.
What the guidelines go on to say is that when resources are limited — and that could be interpreted to be access-to-care limitations or that there are not enough providers or financial resources to pay for treatments for everyone at once — we should be prioritizing treatment to those with more advanced fibrosis for the time being.
Those with F3, F4 cirrhosis stage should be treated with the highest priority. That, to me, makes sense, but that doesn’t mean we shouldn’t be thinking about treating all.
A common barrier that we’re encountering are the payers who are saying, “We didn’t budget for this type of expense at this stage because this all came on pretty fast,” and the providers and patients who are stuck in the clinic having to go through countless appeals and prior authorization paperwork.
This scenario has to end. It’s significantly hampering our ability to treat patients because we’re spending a lot of our time making appeals to the payers and sometimes the drug companies for compassionate use. That’s got to equilibrate in some way over the coming year, and to me, this means finding a balance between the cost of drugs and the ability of payers to pay.
Profit vs. Public Health
My hope is that the pricing will come down. As an example of how this might play out, the average drug that comes to market, the cost of development is $1 to $1.5 billion per drug. My rough sense after watching drug development and pricing over the years, is that the company tries to recoup its research and development costs within the first 18 months of release.
If that’s the case, for a blockbuster drug that treats, for example, 100,000 patients in the first year, then that means that the price for the entire treatment regimen should be $10,000 for the manufacturer to make back, in the course of a year, the billion dollar investment. The cost per drug per treatment regimen should be approximately $10,000.
So for recently approved compounds, my best guess is at most, the treatment regimen should cost $30,000 for them to make back their investment for all three drugs in 12 to 18 months.
Yet the list price is 2.5 times that amount. Moreover, this calculation only includes patients in the US. When considering that hepatitis C is a global disease with up to 170 million people infected world-wide, there is ample room for much lower pricing that is affordable to all.
Most companies say they’re heavily discounting the price for distributors. For example, one manufacturer has established an exclusive arrangement with Express Scripts while another has established an exclusive distribution agreement with CVS. I’m sure there is a heavy discount to get this exclusivity, and the manufacturers are smart to do that, but the pricing and the discount is opaque to the community of providers and patients.
This should be a free market. We’re all paying into our insurance plans and we’re all a part of this, yet consumers don’t see anything of what the pricing discount is. Let’s say it’s 50% off of list price: $40,000 is better, but it’s still $10,000 more than the calculation I predicted for three drugs like that. Perhaps the discount takes the pricing down to $30,000. That could be the case, but we don’t see the discount. That is my point.
Finally, the FDA has done a great service to these companies in allowing fast-track accelerated approval and the removal of barriers that normally cost them the majority of their billion-dollar cost in phase 3 studies. Their phase 3 studies were truncated because they did not have to go against a comparator arm containing interferon.
The question then emerges: “What is the obligation, if any, to turn those additional reductions in cost back to the public?” I don’t hear anyone talking about this.
Finding a Middle Ground
What I do hear is advocates ranting about payers, saying it’s unethical that they’re not allowing access to care because they’re trying to protect their bottom line. But, if it’s a not-for-profit system like Kaiser [Permanente] or the VA, they’re trying to keep themselves from going under by paying prices that are too high for these therapies.
Somewhere in the middle, what I hope we see is some balanced solution to this. The drug companies certainly deserve to earn a profit on their products. The question is, at what point do profits become excessive? And when does the profit hamper the public health and the health of individuals? That equilibrium has got to be established.
My final hope is that maybe the release of all these new drugs will create enough pure, genuine competition that, for the first time, we might actually see a competitive marketplace at work in the pharmaceutical industry, which we typically don’t see.
The one big barrier we have against the marketplace working is the lack of transparency of what negotiated pricing is between the drug company and the distributor.
The Role of Primary Care Providers
In terms of resources, what we’re going to need is the expansion of the workforce of available providers to treat hepatitis C. It can’t just be hepatologists. It can’t just be gastrointestinal physicians. It can’t just be infectious disease physicians. Or any combination thereof.
Even if we pool all those people together, it’s not like they’re sitting around with nothing to do and have tremendous capacity to absorb a large number of new patients with hepatitis C infection.
Rather, it’s going to require the enlistment of help of at least some primary care providers. This could be internal medicine or family medicine. It doesn’t matter as long as they have a commitment to treating hepatitis C infection and they want to learn about it.
There are ways they can be brought up to speed on the staging of liver disease and how to judge when they need to refer to the hepatologist for advanced liver disease. Once that’s done, I think we’re going to find they’ll get in the game and they’ll help cure as many people as possible.
For more information:Michael S. Saag, MD, is professor of medicine, Jim Straley Chair in AIDS Research and director of the Center for AIDS Research at the University of Alabama at Birmingham. He is also a Co-chief Medical Editor of HCV Next. Saag can be reached at HCV Next, 6900 Grove Road, Thorofare, NJ 08086; email: firstname.lastname@example.org.
Disclosure: Saag reports serving as a principal investigator for several clinical trials sponsored by Boehringer Ingelheim, Bristol-Myers Squibb, Gilead, Janssen Therapeutics, Merck and ViiV, where all funding went to his institution and he received no salary support.