The American Journal of Managed Care Special Issue: HCV
Coverage for Hepatitis C Drugs in Medicare Part D
Objectives: The recent arrival of new hepatitis C virus (HCV) drugs has brought fiscal pressures onto Medicare Part D; spending on HCV drugs in Part D jumped from $283 million in 2013 to $4.5 billion in 2014. We examined the current benefit designs for HCV drugs in Part D plans and analyzed patients’ financial burden for those drugs.
Study Design: A cross-sectional analysis of CMS’ July 2015 Part D Plan Formulary File and the Wolters Kluwer Health Medi-Span Electronic Drug File v.2.
Methods: We analyzed the type and amount of cost sharing for HCV drugs and the extent to which plans apply utilization management tools. We then estimated total out-of-pocket spending for beneficiaries to complete a course of treatment.
Results: All Part D plans covered at least 1 recently introduced HCV drug, as of July 2015. Nearly all plans charged relatively high coinsurance and required prior authorization for new HCV drugs. For enrollees with no subsidy, the mean out-of-pocket spending needed to complete a course of treatment is substantial, ranging from $6297 to $10,889. For enrollees with a low-income subsidy, out-of-pocket spending varies between $10.80 and $1191.
Conclusions: Under the current Part D benefits, HCV drug users with no subsidy face sizable financial burdens, even with catastrophic coverage and the recent in-gap discount for brand name drugs. As baby boomers—the group most likely to have HCV—join Medicare, efforts should be made to ensure patient access to these needed drugs.
Am J Manag Care. 2016;22(5 Spec Issue No. 6):SP220-SP226
- All Part D plans cover at least 1 new, expensive HCV drug.
- Nearly all plans charge relatively high coinsurance and require prior authorization.
- Expected out-of-pocket spending for enrollees with no subsidy to complete a course of treatment ranges from $6297 to $10,889; for enrollees eligible for a low-income subsidy, total expected out-of-pocket spending varies between $10.80 and $1191.
- Under the current Part D benefits, HCV drug users with no subsidy face sizable financial burdens.
These HCV drugs are not an isolated case: highly effective, yet extremely expensive, drugs for other diseases are increasingly being introduced to market. Nevertheless, HCV drugs present a clear example of the fiscal pressures that new drugs are imposing on the healthcare system. The financial impact of the new HCV drugs has been particularly salient in Medicare Part D, where spending on these drugs jumped from $283 million in 2013 to $4.5 billion in 2014.2 Spending on Sovaldi alone—the drug with the highest spending in Part D—exceeded $3 billion.3 HCV drug spending in Part D is expected to reach $9.2 billion in 2015.4
With this alarming trend, strategies and benefit designs to effectively manage HCV drug spending are being sought.5,6 Coverage decisions on these drugs are challenging because they require a balance between ensuring patients’ access to needed drugs and controlling healthcare expenditures. Examination of benefit designs currently used for HCV drugs can be informative in exploring tools to manage HCV drug spending and refining benefit designs to improve patients’ access. We analyzed the current Part D coverage for HCV drugs and calculated expected out-of-pocket (OOP) spending for beneficiaries to complete a course of treatment.
HCV and Its Treatments
More than 3 million Americans are infected with HCV, with its prevalence concentrated among baby boomers, who were born between 1945 and 1965.7 HCV causes more deaths in the United States than HIV/AIDS.8 Chronic HCV is a cause of serious and costly liver diseases, such as cirrhosis and liver cancer, and related hospitalizations and costs have increased during the past decade.9 Although the burden of HCV can be reduced through screening and treatments, the implementation of recommended screening is limited, and half of the infected population goes undiagnosed.9
The conventional HCV treatment for the most common type of HCV (genotype 1) consisted of peginterferon and ribavirin (known as PR therapy), which required a 48-week treatment course. Both peginterferon and ribavirin have several products (brand names). The “cure” rate, measured by sustained virologic response (SVR) and defined as having no HCV ribonucleic acid in the blood 24 weeks after a treatment, was about 50% for PR therapy.10 Due to the side effects of interferon, some patients could not tolerate this therapy. One study reported about 40% of patients completed the interferon therapy.11
The first direct-acting antivirals (DAAs)—Incivek (telaprevir) and Victrelis (boceprevir)—were approved in 2011. With these drugs, SVR reached 75% to 80%10; however, patients had to simultaneously be on the PR regimen and were required to dose every 7 to 9 hours.
Sovaldi (sofosbuvir), introduced in December 2013, brought several innovative aspects, including convenient administration (once-a-day pill), a short treatment period (12 weeks), and a high cure rate (90%).10 However, Sovaldi also came with a price tag of $1000 per pill, which immediately caught the attention of the media and payers. Two competing drugs entered the market in late 2014: Harvoni (ledipasvir/sofosbuvir) and Viekira Pak (ombitasvir/paritaprevir/ritonavir co-packaged with dasabuvir). An additional drug, Olysio (simeprevir), was introduced in 2013 to be used in combination with PR therapy; however, its utilization increased after it was approved for combined usage with Sovaldi in November 2014.12 The first DAAs were discontinued after these new drugs arrived.12