In 2011, Food and Drug Administration (FDA) Commissioner Margaret Hamburg remarked upon a “new direction in the treatment of hepatitis C”, as a success rate of approximately 70% marked a significant improvement over the previous rate of approximately 50%, and suggested a cure was in sight. Today, that cure has been realized as Sovaldi® (sofosbuvir), a novel agent, has shown a success rate of 95% in clinical trials. Sofosbuvir comes without the debilitating side effects of what was our previous standard of practice, works in less time, eliminates accompanying interferon therapy, and eliminates injections altogether, in favor of a pill that can be taken once daily. But, most notably (and the primary reason behind the price tag), it represents a virtually unparalleled conquest of a virus without a vaccine, in a population that presents a significant burden upon our healthcare costs.
Sofosbuvir is the definition of disruptive in a market that craves disruption. It is on pace to overtake Lipitor® (atorvastatin) as the best selling drug of all time, probably within the next three years. It is well documented that sofosbuvir costs $84,000 for a full 12-week regimen, or $1,000 per pill, and this estimate does not include expenses for diagnostic assays, monitoring, and physician visits. Importantly, the question we must ask is, Is it worth it?
In this post, we wrote about the “spoiled rich kid” mentality and opined that instead of the Cadillac, we must learn to choose the Ford, which may very well get us where we need to be just fine. However, this idea is limited by the cost of disease progression; it makes sense in every situation except disease states in which the consequences of morbidity and mortality associated with treatment failure are costlier than the drug savings.
Hepatitis C seems to fall in this category, which is why it is considered such a valuable industry. For starters, the cost of a liver transplant is approximately $300,000 per patient, and at least 3 million Americans are infected with hepatitis C (and surely more do not even realize they have it, as it is a ‘silent disease’). Despite a recent decrease in new infections, the death toll is increasing as infections incurred years ago have started to take a toll; today, more people die of hepatitis C than Human Immunodeficiency Virus (HIV). Sofosbuvir makes financial sense mainly because it represents a substantial savings of morbidity and mortality costs associated with progression of hepatitis C.
If the decision were simply between sofosbuvir, a liver transplant, cirrhosis, liver cancer, or death, it would be an easy one. The decision becomes more complicated when we consider that hepatitis C is unpredictable and it can take decades to damage the liver enough to cause serious liver damage, yet we would pay for the cure today. An estimated 50% of hepatitis C patients receive some form of government assistance (mainly veterans, prisoners, and those on Medicaid), a population with increasing access to care, based upon the provisions of the Affordable Care Act. A recent study by the Institute of Clinical and Economic Review (ICER) estimated an additional cost of $18 billion to treat half of California’s Medicaid population. The Chief Executive Officer (CEO) of Express Scripts, albeit a biased expert, recently claimed sofosbuvir will “break the country”.
The odds of winning the lottery are approximately 1:176 million, yet data shows that most of us play. Why? Because there is a chance of winning. We must not practice this way in medicine, but we do all too often. Waiting is recommended for many patients – particularly those with little or no liver damage, as competition will inevitably bring the price down. However, if I were a patient with hepatitis C and I knew of a cure, I would certainly do what I could to get it now. If we concede that sofosbuvir is worth the price, the most important question then becomes, Is it worth it for everyone?
Gilead Sciences, the manufacturer, estimates that only 58,000 Americans are currently undergoing treatment for hepatitis C, and based on their actions to this point, they plan to embark upon the Blue Ocean Strategy of creating a blue ocean by altering the boundaries of an existing red one. One commonly cited example of this strategy is the success story of Cirque du Soleil, which redefined the circus industry and ultimately created a new form of entertainment, making its competition irrelevant in the process. It was recently estimated that if Gilead Sciences were able to treat every hepatitis C patient in America, the company would make $227 billion, more than the sale of every other drug combined. Currently, television advertisements sponsored by Gilead encourage people to get screened and to talk with their doctors about new treatment options.
These are important questions that set a precedent for our future decisions. These medications are considered the first of a new wave of expensive specialty medications in development, the Food and Drug Administration (FDA) is bound by law not to consider price when making decisions, drug prices are unregulated, healthcare is not price elastic, and the days of Jonas Salk altruism are long behind us. If we are willing to pay $84,000 today to cure for hepatitis C, how much might we pay for a cure for Alzheimer’s Disease?