The Price of Progress in Hepatitis C Management

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The hepatitis C virus is the most common blood-borne pathogen in the United States, with which more than 3 million people are currently infected.1 Complications of chronic viral hepatitis C infection—including cirrhosis, end-stage liver disease, hepatocellular carcinoma, and liver transplantation—cost the healthcare system approximately $6.5 billion annually, a total expected to increase to approximately $9.1 billion by 2024.2

While traditional therapy relied upon the use of pegylated interferon injected subcutaneously 3 times a week and oral ribavirin, recent advances have been made with the development of directacting antiviral agents such as the protease inhibitors, telaprevir, boceprevir, and simeprevir, and the first nonstructural protein 5B inhibitor (NS5B), sofosbuvir. Sustained virologic responses (SVRs) were only attained in approximately 45% of genotype 1 infections with traditional therapy, and many patients were unable to complete the full 48 weeks of therapy due to intolerable side effects such as flu-like syndrome, depression, and anemia.3 The first-generation protease inhibitors, telaprevir and boceprevir, increased SVRs in noncirrhotic patients to approximately 72%, but require triple therapy and do not avoid the aforementioned side effects of interferon and ribavirin.4,5

Simeprevir is a second-generation protease inhibitor that can be taken once daily, thus decreasing the pill burden and adherence issues with telaprevir and boceprevir.6 Simeprevir also causes less anemia than the previous protease inhibitors, although it brings additional side effects such as photosensitivity and pruritis. In phase 3 trials,

simeprevir (150 mg daily) with pegylated interferon and ribavirin yielded 80% SVRs at 12 weeks in genotype 1, treatment-naïve patients, compared with 50% with pegylated interferon and ribavirin alone. Side effects observed in greater than 3% of patients included rash, photosensitivity, pruritis, nausea, myalgia, and dyspnea.


Sofosbuvir provides an additional mechanism for combating hepatitis C by inhibiting NS5B RNA-dependent RNA polymerase, which is essential for viral replication.7 Sofosbuvir is also available as an oral once daily product, but, unlike simeprevir, is approved for genotypes 2, 3, and 4, in addition to genotype 1 hepatitis C. Additionally, sofosbuvir can be given for as little as 12 weeks in combination with pegylated interferon and ribavirin for genotype 1 patients or given for 12 to 24 weeks with ribavirin alone in interferon-ineligible genotype 1 or genotype 2, 3, or 4 patients. The combination of sofosbuvir 400 mg once daily with pegylated interferon and ribavirin produced 90% SVRs at 12 weeks in treatment-naïve, genotype 1 patients with hepatitis C, and up to 96% in genotype 4 patients.8 The most common adverse events seen with sofosbuvir, pegylated interferon, and ribavirin were fatigue, headache, nausea, insomnia, and anemia. Fatigue and headache were most common with sofosbuvir and ribavirin alone.

While the clinical benefits of these new products to treat HCV appear to represent a significant step forward, there is considerable concern related to their costs. At $1000 per dose, sofosbuvir alone will cost $84,000 for the typical 12 weeks of therapy in the United States, while the recently approved combination pill, Harvoni (ledipasvir+sofosbuvir) is estimated at $94,500. When combined with other treatments, these costs can quickly rise well above $100,000 per patient. Additionally, a plethora of yet-unapproved agents in late-phase development will likely be available soon. The best combination for optimal benefit at an appropriate cost has yet to be determined, and clearly, perspectives on “appropriate cost” vary markedly across payers and healthcare decision makers. The level of investment required for this new treatment has led to considerable discussion related to the cost-effectiveness of sofosbuvir compared with existing treatments, as well as a fundamental consideration of affordability for payers and patients.

A number of economic models have been put forward to assess the relative cost-effectiveness of these new treatments compared with existing alternatives.9,10 Gilead has produced its own economic model to assess both cost-effectiveness and budget efficiency for sofosbuvir and its comparators. Although the results vary based on important clinical characteristics, including genotype and the presence or absence of cirrhosis, the model generally supports the cost-effectiveness of sofosbuvir-containing regimens relative to the alternatives. A separate modeling project, performed as a component of a broader analysis for the California Technology Assessment Forum (CTAF), found that for many comparisons with previous standards of care, the incremental cost of 1 additional SVR with newer regimens exceeded $300,000. Subsequently, the CTAF panel determined that only those with the most severe liver damage should undergo treatment with the new drugs.

As is customary with these types of models, there has been much debate regarding modeling assumptions and the clinical basis for various data inputs. It is certainly not uncommon for different models with varying structures, assumptions, and data elements to provide a range of cost-effectiveness estimates. When one assesses the potential budget impact of adopting these new treatments at the population level, however, the fundamental consideration of affordability may well trump the concept of cost-effectiveness.

Given the significant cost of these new treatments and the expectation that they will enhance demand for treatment, there is much concern in the public and commercial payer world regarding their potentially enormous budget impact. Several payers in the United States have voiced strong concerns in this regard.11 Payers face a difficult dilemma: determining the costeffectiveness of sofosbuvir relative to existing alternatives, while managing the significant effects on their drug budgets. This dilemma is only enhanced by the fact that recent clinical guidelines are supportive of the use of these new treatments.12

A partial solution that has been articulated by several payers is to limit the drug’s use based on genotype and severity of hepatic disease, such that this treatment is reserved for only the most severely affected patients. This approach reflects payers’ significant concerns related to managing the budget impact of sofosbuvir and simeprevir, which the CTAF report estimated would be billions of dollars annually for the state of California alone.


Payers must thus perform a complex balancing act, establishing clinically appropriate and financially responsible policies for products that provide unique clinical benefit bolstered by prominent placement in recent clinical guidelines and some evidence supporting their cost-effectiveness. As new products are approved, payers will welcome the enhanced competition and will certainly look for opportunities to use that competition to help manage the financial impact of the category. In the meantime, they are left to carefully consider the existing evidence, highlight evidence gaps that need to be filled with real-world data, and execute policies that help ensure the appropriate use of these products in their populations.