Introduction
To be informed that medication for treating and curing Hepatitis C is available has truly opened window of hope and relief to everyone who have and are suffering from this silent killer disease. However, as with everything else, the most liberating feeling for people is when they know they can afford the treatment costs for Hepatitis C, which they clearly cannot manage without help.
Problems of Healthcare
• Costs
Right now the costs of health care have become a major concern in the United States and the world in general. Skyrocketing costs have impacted profits of small and middle class businesses and has resulted in significant deficits in the federal budget.
The current rate of healthcare spending is spiraling out of control and if it continues along the same path by 2082, it will make up close to 50% of the GDP of the United States. This will witness an alarming jolt in drug prices that will ultimately affect those suffering from the disease.
It’s even more urgent when the increase in cost isn’t because the disease is spreading faster or the rate of treatment has escalated. Rather it’s the cost of the treatment that’s on the high side which in turn has been caused by the advent of new and expensive technology.
The rise in drug spending which forms part of the healthcare spending surge of between 25% and 75% has placed the United States as the highest spender on drugs than any other industrialized country.
The use of biotechnology has increased drug costs beyond the reach of the average citizen, especially new direct acting medications. It’s true biotechnology has revolutionized drug production beyond expectations but it has also driven prices upwards.
Equally disconcerting to users is the practice of insurers in curtailing their cover for expensive drugs which has done nothing for them except to limit their access to drugs they desperately need.
The reality of the situation is that while biotechnology is churning out effective drug treatments at a rapid pace, national expenditures on treatment drugs are escalating while access to them by average citizens is becoming remote all the time.
Main Aspects to Consider
• High healthcare spending and limited access
It is believed that biotechnology has led to the problems of exorbitant health care spending and limited access by those infected with the Hep C virus
• Leading cause of death in the U.S.
Hep C has been categorized as one of the main causes of deaths in the United States with 3.7 million infected with chronic Hepatitis C.
• Chronic hepatitis can be lifelong infection that leads to cirrhosis and cancer
• Mortality rate from Hep C is increasing
15, 106 people infected with hepatitis C died in 2007 alone.
• Not all Hep C infections are identical
There are currently six different Hepatitis C genotypes, with some aggressively resisting treatment.
Causes of the Problem – Sovaldi and Olvsio
Historically speaking, treatment for Hep C was drawn out and was beset with rather severe side effects. Fortunately, health care was revolutionized in December 2013 with the approval of Sovaldi (sofosbuvir) and Olysio (simeprevir) by the FDA.
The two medications are biologics meaning that they derive from living organisms and are biotechnologically produced which involves the use of a living system to manufacture a medication. They also differ in properties than traditional medications.
Prescriptions for Sovaldi and Olvsio are usually given in combination with other drugs for a full antiretroviral treatment of Hep C and the first orally taken, free from interferon medication with very few mild side effects.
Previously patients could not put up with the painful side effects of past and presently combined interferon prescriptions for previous treatments of the Hep C virus. Of the two the efficacy of Sovaldi has shone through across the board of genotypes and while equally effective Olysio occupies second place.
Despite their revolutionary nature, the disadvantage of the innovative drugs was their cost. They were and are very expensive. Sovaldi commands a price of $1000 for a single pill which, when taken over a 12 week treatment course, would cost $84,000 as compared to the cost of Olysio at $23,600 per month of treatment.
The treatment course for Olvsio of 24 to 48 weeks was even longer than Sovaldi and therefore even more expensive given the per pill price.
When considered on a national scale only for the 3.7 million people infected with chronic Hep C with Sovaldi as the medication used, the total cost would be $310 billion dollars. When compared with the total national spending on all drugs of $360.7 billion, the difference is obvious.
The direct result of this significant discrepancy in costs has caused limited access to treatment for patients infected with chronic Hepatitis C.
• High innovation costs
o Free market economy
The main reasons for the high price of Sovaldi and Olysio, was the high cost of innovation, a free market and the absence of drug price negotiations in the United States. The cost of marketing a drug was between $92.0 and $883.6 million.
This exorbitant cost does not reflect the cost of the 90% (according to a study) innovations to produce new Hepatitis C medications and these costs have to be paid back at some stage. The usual practice of passing it on to consumers will help increase prices even higher.
o Lack of national drug price negotiations
The whole national outlook is based on the classic business model of a fair ROI and manufacturers of drug medications are no exception to this model. They want a price that will reflect the amount of investment that went into producing efficacious drugs. Government should interfere along the line somewhere, somehow.
o Nature of the market
While the health care market in the United States is a consumer based-driven system and due to free market enterprise, is rife with duplicity, which means there’s no single health care that can cater for the needs of the more than 3 million hepatitis C cases in the country.
Possible Solutions
• Use of prior authorization
• National price negotiations to lower price of new drugs
• Limitations on direct-to-consumer advertising
• Tiered copays
• Easing restrictions on the importation of drugs
• Changing the way Hepatitis C patients are insured
• Many infected people aren’t insured. Some say 30% others say 65.7%
• Those who are insured are thought to have no private insurance
• Expansions to Medicaid due to the Affordable Care Act may increase insurance cover
• Insurance coverage was very low before passage of the Affordable Care Act.
• More people insured would mean more demand for innovative drugs
• Spending should be curbed and prices of medications should be decreased.
Recommendations
In the light of all these issues, a balanced approach has been recommended
o Sensitive use of preauthorization to limit expensive treatments to those that really need it
o Encourage insurance provider price negotiations
o Increase research on the Food and Drug Administration Safety Innovation Act’s effect on reducing backlog
o Increase restrictions on and enforcement of limitations to direct-to-consumer advertising
o Reduce the length of the biologic patent and
o Expand insurance coverage and create innovative insurance plans for people infected with Hepatitis C.
These recommendations will:
• decrease spending
• maintain innovation
• increase access to lifesaving hep C treatments.
Conclusion
You can feel a positive sigh of relief in knowing that leaders actually care about the plight of hepatitis sufferers. The trend progressions seem to be this; that previous medication for hep C was unsatisfactory, new and efficacious medications have proved too expensive, the introduction of the Affordable Care Act and the ongoing forums to make it possible for sufferers to afford treatment costs for Hep C.