HCV patient cost sharing for DAAs does not make sense

Despite the high cost of novel direct-acting antiviral (DAA) treatments for hepatitis C virus (HCV) infections, high patient cost arrangements that impose large out-of-pocket expenses are “sub-optimal solutions,” according to a new commentary.

“Many policymakers have focused on what they see as a high price for three months of therapy, but the value of curing hepatitis C lasts a lifetime,” said Darius Lakdawalla, Quintiles Professor of Pharmaceutical Development and Regulatory Innovation at the University of Southern California Schaeffer Center for Health Policy and Economics..

When DAAs were launched in 2013, their high cost raised protests from insurers and health systems. The concerned was that treating the estimated 3.5 million Americans HCV patients would bankrupt the healthcare system. As a result, some insurers shifted the cost burden partly onto patients by placing DAAs into high-cost specialty drug tiers.

“This approach might seem appealing and equitable at some level, but closer reflection reveals that it would expose patients with HCV to potentially significant financial burdens at a time when they are least able to cope with them,” writes Lakdawalla in a commentary published online in the American Journal of Managed Care.

He notes that higher cost sharing did not discourage adherence to earlier HCV regimens and patients appeared to be willing to bear higher out-of-pocket costs for the older generation of drugs. “Economic theory would suggest that they would be just as, if not more, willing to bear higher out-of-pocket costs for the newer, more effective and more tolerable generation of drugs,” he writes.

The economic goal of cost sharing is to discourage inappropriate use of therapies that are not legitimately needed, but this is not the issue with novel HCV therapies since the new DAAs “are highly appropriate and effective, curing HCV in more than 90% of patients,” writes Lakdawalla.

High cost sharing for HCV is not only inefficient but also inequitable, he states, noting that high out-of-pocket costs can have disastrous effects on patients’ financial well-being. He notes that nearly one-third of American patients with HCV live below the poverty line. Lakdawalla writes that modestly higher premiums for all beneficiaries can “achieve the same financial goals for the insurer, without excessively burdening the sickest and least advantaged members of society.”

The price of curing hepatitis C in the long term is much less expensive than that of older therapies or of delaying treatments, including liver transplants, he writes.

“Screening the population for hepatitis C and treating patients early in their disease course poses upfront costs but generates substantial long-term benefits to patients, private insurers and Medicare,” Lakdawalla told Medical Economics. “Policymakers must determine how to encourage private insurers to undertake these short-term costs in the service of substantial long-term benefits.  Innovative policies that allow private insurers to harvest the savings they create-even when they accrue to other insurers down the road-may represent a critical strategy for help society unlock the value of cures for hepatitis C and other diseases.”