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The American Journal of Managed Care Special Issue: HCV
Real-World Outcomes of Ledipasvir/Sofosbuvir in Treatment-Naïve Patients With Hepatitis C
Zobair M. Younossi, MD, MPH, FACG, AGAF, FAASLD; Haesuk Park, PhD; Stuart C. Gordon, MD; John R. Ferguson; Aijaz Ahmed, MD; Douglas Dieterich, MD; and Sammy Saab, MD, MPH
Sofosbuvir Initial Therapy Abandonment and Manufacturer Coupons in a Commercially Insured Population
Taruja D. Karmarkar, MHS; Catherine I. Starner, PharmD; Yang Qiu, MS; Kirsten Tiberg, RPh; and Patrick P. Gleason, PharmD
Improving HCV Cure Rates in HIV-Coinfected Patients - A Real-World Perspective
Seetha Lakshmi, MD; Maria Alcaide, MD; Ana M. Palacio, MD, MPH; Mohammed Shaikhomer, MD; Abigail L. Alexander, MS; Genevieve Gill-Wiehl, BA; Aman Pandey, BS; Kunal Patel, BS; Dushyantha Jayaweera, MD; and Maria Del Pilar Hernandez, MD
Does Patient Cost Sharing for HCV Drugs Make Sense?
Darius N. Lakdawalla, PhD; Mark T. Linthicum, MPP; and Jacqueline Vanderpuye-Orgle, PhD
A Way Out of the Dismal Arithmetic of Hepatitis C Treatment
Jay Bhattacharya, MD, PhD, Center for Primary Care and Outcomes Research, Stanford University School of Medicine; Guest Editor-in-Chief for the HCV special issue of The American Journal of Managed
Value of Expanding HCV Screening and Treatment Policies in the United States
Mark T. Linthicum, MPP; Yuri Sanchez Gonzalez, PhD; Karen Mulligan, PhD; Gigi A. Moreno, PhD; David Dreyfus, DBA; Timothy Juday, PhD; Steven E. Marx, PharmD; Darius N. Lakdawalla, PhD; Brian R. Edlin, MD; and Ron Brookmeyer, PhD
The Wider Public Health Value of HCV Treatment Accrued by Liver Transplant Recipients
Anupam B. Jena, MD, PhD; Warren Stevens, PhD; Yuri Sanchez Gonzalez, PhD; Steven E. Marx, PharmD; Timothy Juday, PhD; Darius N. Lakdawalla, PhD; and Tomas J. Philipson, PhD
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Costs and Spillover Effects of Private Insurers' Coverage of Hepatitis C Treatment
Gigi A. Moreno, PhD; Karen Mulligan, PhD; Caroline Huber, MPH; Mark T. Linthicum, MPP; David Dreyfus, DBA; Timothy Juday, PhD; Steven E. Marx, PharmD; Yuri Sanchez Gonzalez, PhD; Ron Brookmeyer, PhD; and Darius N. Lakdawalla, PhD

Costs and Spillover Effects of Private Insurers' Coverage of Hepatitis C Treatment

Gigi A. Moreno, PhD; Karen Mulligan, PhD; Caroline Huber, MPH; Mark T. Linthicum, MPP; David Dreyfus, DBA; Timothy Juday, PhD; Steven E. Marx, PharmD; Yuri Sanchez Gonzalez, PhD; Ron Brookmeyer, PhD; and Darius N. Lakdawalla, PhD
Expanding private-payer coverage of hepatitis C treatment may yield significant long-term cost savings for private payers, reduced costs to Medicare, and increased social value.
Model Outputs
Across all scenarios, the spillover effects on Medicare are computed as the change in HCV cost burden resulting from private payers expanding HCV treatment coverage minus the change in annual total healthcare expenditures (ie, medical and HCV treatment costs), relative to the baseline scenario. This captures the net benefit from the payer perspective.
 
To capture the impact from patients’ perspectives, we computed the change in net social value of HCV treatment relative to the baseline scenario. We define net social value as the total value of QALYs accrued over time (ie, value of health gains from treatment) minus cumulative treatment and medical costs. We assumed a $150,000 value per QALY, given the range of values cited in the literature.37,38 We focused on outcomes for 5- and 20-year horizons, but results for 10 years are presented in the eAppendix.
 
RESULTS
Effects of Private Insurance Treatment Expansion
Table 2 shows the impact on private payers and on Medicare 5 and 20 years after private payers expand treatment from the baseline (F3-F4) to either F2-F4 or F0-F4. When treatment is expanded to F2-F4, private payers, as a class, realize net savings from reduced medical expenditures within 20 years. Relative to the baseline scenario, Medicare’s cumulative costs are reduced by $0.25 billion ($74 per HCV-positive Medicare beneficiary) after 5 years and $4.4 billion ($427 per HCV-positive Medicare beneficiary) after 20 years. These cost reductions represent the spillover effect on Medicare from private payers’ treatment expansion even though Medicare does not expand coverage. In other words, if private payers restrict treatment coverage to F3-F4, Medicare would face an additional $4.4 billion cost burden over 20 years, relative to F2-F4 treatment coverage.
 
Medicare receives a larger net benefit if private treatment coverage is expanded to F0-F4. After 20 years, Medicare’s medical expenditures declined by $9 billion and treatment costs declined by $2 billion, for a net benefit of $11 billion ($1134 per HCV-positive Medicare beneficiary). In both alternative scenarios, private payers with time horizons of less than 20 years have the incentive to restrict treatment coverage, even though this policy harms both Medicare and private insurers in the long term. Figure 2 makes clear, however, that private payers do not enjoy the same net benefit as Medicare in the short term, because they bear the upfront treatment costs. Private payers face increased total costs of $25 billion to $78 billion after 5 years of expanding treatment. It takes roughly 16 to 17 years for private payers to break even on their upfront investment in treatment; after 20 years, they enjoy net savings of $10 billion to $14 billion. When treatment is expanded to F0-F4, net benefits to Medicare are 2.5 times higher compared with expanding to F2-F4. In addition, despite 5-year costs that are almost 3 times larger compared to expansion to F2-F4, expanding to F0-F4 results in an additional $4 billion in savings to private payers over a 20-year period.
 
Expanding HCV treatment coverage also greatly benefits society, through both reduced mortality and improved health-related quality of life for treated patients.39 Relative to treating at stages F3-F4, expanding treatment to F2-F4 generates 0.9 million additional discounted life-years over a 20-year period, and this figure increases to 1.17 million discounted QALYs after applying health utilities to the model population. Similarly, expansion to F0-F4 generates 1.7 million discounted life-years and 2.35 million QALYs over 20 years, relative to treating F3-F4.
 
QALY gains represent considerable value for society (see Figure 3). The cumulative net social value for each treatment expansion scenario is positive within 8 years. However, expanding treatment to F0-F4 provides the largest societal benefits after 20 years, at $382 billion, compared with only $192 billion generated by only expanding to F2-F4.
 


 
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