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An Expensive Cure, but an Even More Expensive Disease

As Gilead's Sovaldi (sofosbuvir) hit the market in December 2013, its price of $84,000 for a 12-week treatment course caused many insurers to balk, including ExpressScripts, Catamaran Corp, Aetna, and CVS/Caremark.1 Their concerns were not unfounded: Recently, UnitedHealth reported an 8% dip in profits in the first quarter of 2014 due, in part, to $100 million in additional medical costs resulting from rapid uptake of Sovaldi.

As Gilead’s Sovaldi (sofosbuvir) hit the market in December 2013, its price of $84,000 for a 12-week treatment course caused many insurers to balk, including ExpressScripts, Catamaran Corp, Aetna, and CVS/ Caremark.1 Their concerns were not unfounded: recently, UnitedHealth reported an 8% dip in profits in the first quarter of 2014 due, in part, to $100 million in additional medical costs resulting from rapid uptake of Sovaldi.2

The high cost of Sovaldi to insurance companies reveals nothing about the cost to patients without insurance. In one analysis of National Health and Nutrition Examination Survey data collected between 2005 and 2008, even after adjusting for confounding factors, such as demographic disparities, patients with hepatitis C virus (HCV) were 57% less likely to have insurance than people without HCV.3 In the current economic climate, many of these patients are eligible for coverage under the Affordable Care Act.

Given the shifting of costs to insurance programs administered through the Affordable Care Act, one highly relevant question was posed by Jami Rubin, an analyst with Goldman Sachs Group, Inc, who asked in a January 2014 Bloomberg news article on HCV, “What will society pay for a cure?”1

One estimate of the average per-patient total cost of medical complications associated with HCV infection, measured in 2003, was $33,407, assuming no pharmacologic treatment was used.4 Untreated patients with HCV may incur costs related to managing cirrhosis and hepatocellular carcinoma, as well as liver transplantation.4,5 Despite these high costs and long-term effects, a 2010 analysis of data from the National Ambulatory Medical Care Survey revealed that fewer than 10% of ambulatory patients with HCV sought treatment.6 However, that percentage may increase rapidly as more tolerable treatments become available, including interferon-free and ribavirin-free regimens.

Because many patients living with chronic HCV infection are aging, complications become more common. Between 2005 and 2009, the inpatient burden of HCV based on the National Inpatient Sample and the National Hospital Discharge Survey indicated a significant increase in HCV-related inpatient mortality rates, from 1.7% in 2005 to 2.6% in 2009 (P <.001).7

The costs associated with hospitalization due to the later effects of HCV can be very high. One early estimate placed the cost of a hospitalization related to HCV complications between $39,235 and $222,968 per patient, and more than onethird of these costs were due to end-of-life hospitalization. Improving access to treatment may reduce the risk of cirrhosis, and may drive down hospitalization costs. As demonstrated by Gordon et al, even in the sickest patients, such as patients with end-stage renal disease, treatment reduces overall healthcare costs.8

Even patients who are not seriously ill may benefit from a functional cure. Chronic HCV infection may cause malaise and is associated with higher overall healthcare costs. According to a 2010 study by Su et al, the morbidity associated with chronic HCV costs $8352 per patient per year in lost productivity.9

Although the cost of treatment with interferon-free regimens is high, on the basis of the cost per functional cure, these agents may be comparable to the cost of older, less effective treatments, such as telaprevir and boceprevir. In fact, considering the cost of managing adverse events, the cost of 1 functional cure from HCV with a regimen composed of telaprevir, ribavirin, and peginterferon is approximately $189,000.10

Even combination treatment with simeprevir and sofosbuvir may reduce costs in some groups of patients. In a pharmacoeconomic analysis, Hagan et al defended the decision by the American Association for the Study of Liver Diseases (AASLD) and the Infectious Diseases Society of America (IDSA) to recommend combination treatment with simeprevir and sofosbuvir for interferon-ineligible patients. Using a Markov model, a lifetime time horizon, and a societal perspective, investigators estimated that a 50-year-old treatment-naïve patient with HCV would save $91,590 in future healthcare costs by receiving simeprevir/sofosbuvir treatment rather than a sofosbuvir/ribavirin treatment course.11

Although newer agents come at a higher cost than older agents, on a per-tablet basis, the cost per patient cured may be comparable or, in some cases, lower. The resistance to cover HCV treatment may stem from considering shortterm costs over long-term costs, considering the insurance perspective rather than the societal perspective, and failing to account for savings in hospitalization costs and human pain and suffering accrued over time.


1. At $84,000 Gilead hepatitis C drug sets off payer revolt. Bloomberg website. http://www.bloomberg.com/news/2014- 01-27/at-84-000-gilead-hepatitis-c-drug-sets-off-payerrevolt. html. Accessed June 30, 2014.

2. CBS News. UnitedHealth’s 1Q profit tumbles 8 percent. http://minnesota.cbslocal.com/2014/04/17/unitedhealths-1qprofit- tumbles-8-percent/. Accessed June 30, 2014.

3. Stepanova M, Kanwal F, El-Serag HB, Younossi ZM. Insurance status and treatment candidacy of hepatitis C patients: analysis of population-based data from the United States. Hepatology. 2011;53(3):737-745.

4. Wong JB. Hepatitis C: cost of illness and considerations for the economic evaluation of antiviral therapies. Pharmacoeconomics. 2006;24(7):661-672.

5. Siebert U, Sroczynski G, Aidelsburger P, et al. Clinical effectiveness and cost effectiveness of tailoring chronic hepatitis C treatment with peginterferon alpha-2b plus ribavirin to HCV genotype and early viral response: a decision analysis based on German guidelines. Pharmacoeconomics. 2009;27(4):341-354.

6. Cheung R, Mannalithara A, Singh G. Utilization and antiviral therapy in patients with chronic hepatitis C: analysis of ambulatory care visits in the US. Dig Dis Sci. 2010;55(6):1744- 1751.

7. Younossi ZM, Otgonsuren M, Henry L, et al. Inpatient resource utilization, disease severity, mortality and insurance coverage for patients hospitalized for hepatitis C virus in the United States. J Viral Hepat. 2014.

8. Gordon SC, Hamzeh FM, Pockros PJ, et al. Hepatitis C virus therapy is associated with lower health care costs not only in noncirrhotic patients but also in patients with end-stage liver disease. Aliment Pharmacol Ther. 2013;38(7):784-793.

9. Su J, Brook RA, Kleinman NL, Corey-Lisle P. The impact of hepatitis C virus infection on work absence, productivity, and healthcare benefit costs. Hepatology. 2010;52(2):436-442.

10. Medscape. Costs for hepatitis C treatment skyrocket. http:// www.medscape.com/viewarticle/814295. Accessed June 30, 2014.

11. Hagan LM, Sulkowski MS, Schinazi RF. Cost analysis of sofosbuvir/ ribavirin versus sofosbuvir/simeprevir for genotype 1 hepatitis C virus in interferon-ineligible/intolerant individuals. Hepatology. doi:10.1002/hep.27151. [Published online March 28, 2014.]