The $1,000 Hepatitis C pill: As sales soar, cost debate intensifies

July 25, 2014

The Hepatitis C drug Sovaldi may be a blockbuster, but experts question whether the system can handle the treatment’s cost.

The groundbreaking Hepatitis C drug sofosbuvir (Sovaldi) reached sales of $5.7 billion in the first six months of 2014 as demand for the drug has surged, prompting debate about the expensive treatment’s effect on the healthcare system.

Sovaldi, produced by Gilead Sciences, can cure Hepatitis C in a majority of cases with minimal side effects. Hepatitis C affects more than three million Americans, and curing the disease would mean preventing long hospitalizations and liver transplants, which can cost on average up to $600,000 per patient, reports The Washington Post.

But the treatment costs $84,000 for a 12-week course, and many healthcare experts, payers and pharmacy benefit managers say the drug could have an adverse impact on healthcare costs system-wide and put a particular strain on state budgets. That’s because 750,000 Hepatitis C patients are on Medicaid or are housed in state prisons.  Treating those patients would cost more than $55 billion and amount to a “tax on all Americans,” according to an analysis by Express Scripts.

The Washington Post reports that several states are attempting to limit which patients have access to the drug.

Troyen Brennan, MD, MPH, and William Shrank, MD, MSHS, executives with CVS Caremark, write in an opinion piece published in the Journal of the American Medical Association in July that the “simple math is that treatment of patients with HCV [hepatitis C virus] could add $200 to $300 per year to every insured American’s health insurance premium for each of the next 5 years.”

Brennan and Shrank  add: “In summary, the health care system is adjusting quickly, but perhaps not quickly enough, to compensate for the high prices of HCV medications and, more importantly, the high cost of treating all HCV-infected individuals.”

Impact on primary care

Primary care physicians can expect to deal more frequently with Hepatitis C patients as more patients begin seeking screening for the disease and inquiring about the drug.

The Centers for Medicare and Medicaid Services announced in June that Medicare will cover HCV testing for adults born between 1945 and 1965. The ruling specifies that covered testing must be ordered by a primary care provider.

The U.S. Preventative Services Task Force recommended in 2013 that all Americans born between 1945 and 1965 be tested for Hepatitis C regardless of risk factors because more than 4% of Americans between the ages 40 and 49 have the virus.