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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
Currently Reading
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.
This study adds to the growing evidence that earlier HCV treatment generates considerable value to patients and society, contributing to the ongoing debate about when to initiate HCV treatment, given its costs. Although treatment guidelines do not recommend limiting treatment by fibrosis stage, insurers must balance the increasing evidence for early treatment against their actuarial costs.30 Additionally, this study demonstrates the magnitude of the wedge between payer incentives today, and when patients infected with HCV age into Medicare in the future. Decision makers charged with allocating limited healthcare resources are faced with difficult tradeoffs between short-term costs and long-term benefits. Although this issue is salient in the treatment of HCV, it applies to numerous other clinical settings as well.
 
Our results present a challenge to policy makers regarding who should be responsible for HCV treatment coverage decisions. Although the socially optimal strategy is for private insurers to expand treatment coverage, this conflicts with their short-term financial incentives. A blunt solution would subsidize HCV treatments directly, since their long-term social benefits exceed the benefits internalized by private payers.
 
A more nuanced solution would allow private payers to capture the long-term benefits they create from expanded treatment, even if patients switch coverage. An insurer who treats a patient lowers the actuarial cost of covering that patient in the future, which could be rebated to the original insurer as a “handoff payment” if the patient were to switch coverage.40 Alternatively, an explicit credit could be granted to each payer that treats a patient.41 An example is the idea of “Healthcoins,” or a similar market-based tradable asset pegged at the value society derives from treatment (benefits of treatment minus costs).41 These and other policy options remain an open area of further research and discussion.
 
Limitations
As in any modeling-based analysis, our approach has some limitations. Markov models are designed to capture cohort-level effects and therefore cannot forecast individual disease processes and outcomes.42,43 We assumed individuals belong to a single risk group to avoid double counting, but some overlap is likely to exist in reality. We also assumed no retreatment for individuals who initially failed treatment, but this limitation likely results in a small impact on cost estimates, since existing research indicates that the number of nonresponders is low.6,44-46
 
Although NHANES provides reliable population-level estimates, subpopulation estimates are less reliable due to small sample sizes. Additionally, due to NHANES’ self-reporting design, it is possible that stigmatized behaviors, such as sexual activities and intravenous drug use, are underreported, which would affect subpopulation estimates. However, NHANES-based estimates are similar to other estimates reported in the literature.47 Finally, NHANES also does not capture homeless and incarcerated populations, both of which have high HCV prevalence and limited treatment access.15,48
 
Lastly, our model was designed to examine spillover effects of private coverage policies to Medicare; thus, transitions between insurance types are not modeled, except for individuals aging into Medicare at 65. Spillovers to Medicaid and uninsured populations are limited in our model to the impact of reduced disease transmission. Incorporating insurance transitions could generate additional positive spillover effects from healthier individuals switching among Medicaid, private plans, and uninsured. Additionally, our model assumes uniform coverage among private insurers and does not capture variation in insurance coverage levels. We did not, therefore, study the effects of private insurers who offer different levels of coverage. Differences in coverage may be relevant in a competitive private market or one in which employers and beneficiaries vary in their demand for benefit generosity. Differences in benefit design and competition among insurers present valuable questions for further research.
 
CONCLUSIONS
Expanding HCV treatment coverage significantly benefits patients and society through a reduced disease burden; however, the optimal approach to paying for these treatments is less clear. As our results demonstrate, expanding private insurance coverage of HCV treatments reduces treatment costs and medical expenditures for Medicare over all time horizons. It also generates net savings for private insurers in the longer term and benefits to society in terms of QALYs. The misalignment between short-term treatment costs and long-term benefits that private payers face, however, may not promote socially optimal treatment strategies. Public policies may be required to realize the benefits of expanding HCV treatment coverage. 

Author Affiliations: Precision Health Economics (GAM, KM, CH, MTL), Los Angeles, CA; Arete Analytics (DD), Andover, MA; AbbVie, Inc (TJ, SEM, YSG), North Chicago, IL;  Department of Biostatistics, University of California (RB), Los Angeles, CA; Leonard D. Schaeffer Center for Health Policy & Economics, University of Southern California (DNL), Los Angeles, CA.

Source of Funding: Support for this research was provided by AbbVie, Inc.

Author Disclosures: Drs Juday, Marx, and Sanchez Gonzalez are employees and stockholders of Abbvie, Inc, which develops and markets treatments for hepatitis C virus. Drs Moreno and Mulligan, and Ms Huber and Mr Linthicum are employees of Precision Health Economics (PHE), a healthcare consultancy to life science firms. Dr Lakdawalla is the chief strategy officer and owns equity in PHE, and Drs Dreyfus and Brookmeyer are consultants for PHE.

Authorship Information: Concept and design (GAM, KM, DD, TJ, SEM, YSG, RB, DNL); acquisition of data (GAM, KM, CRH); analysis and interpretation of data (GAM, KM, CRH, MTL, DD, TJ, SEM, YSG, RB, DNL); drafting of the manuscript (GAM, KM, CRH, MTL, TJ, SEM, YSG); critical revision of the manuscript for important intellectual content (GAM, KM, CRH, MTL, DD, TJ, SEM, YSG, RB, DNL); statistical analysis (KM,DD, TJ); obtaining funding (TJ, YSG); administrative, technical, or logistic support (GAM, KM, MTL); and supervision (GAM, TJ, YSG, DNL).

Address correspondence to: Gigi A. Moreno, PhD, Precision Health Economics, 11100 Santa Monica Blvd, Ste 500, Los Angeles, CA 90025. E-mail: gigi.moreno@precisionhealtheconomics.com.
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