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Same-Day Analysis

US ICER issues final HTA for new HCV drugs, urges payors to negotiate prices "vigorously"

Published: 13 March 2015

The budget impact on California's public programmes would be USD3 billion if all genotype 1, 2, and 3 hepatitis C infected patients were to seek treatment.



IHS Life Sciences perspective

 

Significance

The Institute for Clinical and Economic Review (ICER), a US independent non-profit health technology assessment agency, has issued a final report prepared by the California Technology Assessment Forum (CTAF), one of its main programmes, regarding the cost-effectiveness of the latest hepatitis C virus (HCV) treatments for genotype 1HCV infections, including Gilead Sciences (US)'s Harvnoi (ledipasvir and sofosbuvir), a combination of J&J (US)'s Olysio (simeprevir) and Sovaldi (sofosbuvir), as well as AbbVie (US)'s Viekira Pak (paritaprevir + ritonavir + ombitasvir + dasabuvir) with ribavirin.

Implications

According to the panel, Harvoni demonstrated clinical superiority over single antiviral therapy, and was also considered cost-effective compared to treatment with interferon and ribavirin therapies. However, CTAF noted that the treatment nevertheless represented "low value to health systems due to the immediate budget impact imposed by its high cost". Treatment would result in an estimated USD3 billion in short-term costs if all California Medi-Cal (Medicaid) and Department of Corrections patients with genotype 1 HCV were treated with Harvoni, and genotype 2 and 3 HCV patients received Sovaldi plus ribavirin.

Outlook

CTAF issued action guides to payors and policyholders encouraging them to negotiate prices "vigorously", and to partner with other stakeholders to find solutions that "can support the sustainable adoption of expensive high care value treatments that could breach acceptable budget impact thresholds". Although 2014 was a difficult year for most drug insurers, pharmacy benefit managers, and public programmes in the US regarding management of the HCV demand for treatments with the budget constraints, it is likely that moving forward significant discounts driven by increased competition on the market and negotiated rebates with payors will make the treatments much more accessible. However, it remains to be seen if the pricing debate fuelled by these breakthrough treatments will culminate in pricing regulation or oversight in the US.

The Institute for Clinical and Economic Review (ICER), a US independent non-profit health technology assessment agency (HTA), has issued a final report prepared by the California Technology Assessment Forum (CTAF), one of its main programmes, regarding the cost-effectiveness of the latest hepatitis C virus (HCV) treatments for genotype 1HCV infections. The CTAF panel reviewed the comparative clinical effectiveness evidence as well as value assessments for several HCV therapies including Gilead Sciences (US)'s Harvnoi (ledipasvir + sofosbuvir), a combination of Johnson & Johnson (US)'s Olysio (simeprevir) and Sovaldi (sofosbuvir), as well as AbbVie (US)'s Viekira Pak (paritaprevir + ritonavir + ombitasvir + dasabuvir) with ribavirin.

According to the panel, Harvoni demonstrated clinical superiority over single antiviral therapy and was also considered cost-effective compared to treatment with interferon and ribavirin therapies. A 12-week course of treatment with Harvoni in treatment-naïve and treatment-experienced patients as well as patients across all levels of liver fibrosis fell between accepted thresholds of cost-effectiveness; USD50,000–100,000 per quality-adjusted life year (QALY). However, CTAF noted that the treatment nevertheless represented "low value to health systems due to the immediate budget impact imposed by its high cost".

Budget impact and recommended price

With regards to budget impact, treatment would result in an estimated USD3 billion in short-term costs if all California Medi-Cal (Medicaid) and Department of Corrections patients with genotype 1 HCV were treated with Harvoni, and genotype 2 and 3 HCV patients received Sovaldi plus ribavirin. The ICER review also noted that even after 20 years, less than 50% of the cost would have been offset by savings generated from a reduction in liver complications. Furthermore, there was insufficient evidence to distinguish between Harvoni, Sovaldi/Olysio, and Viekira Pak in terms of clinical effectiveness. The analysis concluded that a total price range of USD34,000–42,000 per course of treatment would be required to allow treatment of all infected individuals without increased per member per month (PMPM) costs of more than 1% – the maximum level of increase that can be accommodated by most insurers without special measures.

Action Guides

CTAF has issued three Action Guides for patients, clinicians, and payors/policymakers, respectively. The guide for payors and policymakers lists several key points summarised below.

Summary of CTAF Action Guide for payors and policymakers

  1. Leverage the availability of multiple comparable treatment options to negotiate vigorously for lower prices.
  2. If lower prices are obtained expand coverage by eliminating requirements liver fibrosis and by allowing primary care clinicians to prescribe the new HCV regimens.
  3. Develop transparent approaches for identifying pragmatic thresholds for incremental cost-effectiveness and budget impact that represent both reasonable care value and health system value.
  4. Partner with other stakeholders to develop new mechanisms that can support the sustainable adoption of expensive high care value treatments that could breach acceptable budget impact thresholds.
  5. Support provider groups as they work to build a system to screen and identify patients with hepatitis C, track them over time, and provide treatment as needed.
  6. Closely monitor evolving evidence and clinical guidelines to ensure that prior authorization criteria and other coverage policies for hepatitis C therapies remain up-to date with the most recent evidence.

Source: CTAF "Next Steps for Payers and Policymakers: An Action Guide on the Newest Treatments for Chronic Hepatitis C Infection", 2015.

The full report can be found here.

Outlook and implications

Next-generation HCV antivirals have received significant pressure from payors and legislators due to their elevated pricing. Although the treatments are predominantly curative, the size of the infected population – nearly 3.2 million in the US according to the Centres of Disease Control and Prevention – makes the budget impact of providing coverage extremely significant in the short term. Sovaldi was priced at USD84,000 for a 12-week course of treatment and Harvoni's price was set at USD94,500.

It is notable to add that a large portion of the genotype 1 population would be eligible to receive an eight-week course of treatment, therefore reducing the costs to USD63,000. Gilead recently noted during its fourth quarter conference call in February that the gross-to-net adjustment for the HCV portfolio would average approximately 46%, as the firm offered notable discounts to public programmes and secured several exclusive deals with pharmacy benefit managers and insurers in exchange for rebates on the HCV drugs (see United States: 6 January 2015: CVS Health grants Gilead Sciences' HCV drugs Sovaldi and Harvoni preferred formulary status in US and United States: 4 February 2015: Gilead reports 122% y/y top-line growth in 2014, offers 50% discounts to US public payors in 2015).

There is little the United States can currently do regarding pharmaceutical pricing regulation and oversight, although legislators in California are hoping this could change in the near future (see United States: 10 March 2015: US state of California tightens transparency rules for expensive prescription drugs). Meanwhile, the CTAF Action Guides serve to provide recommendations to payors and policymakers regarding these issues in the absence of legislation. Although formulary management strategies and restrictions on eligibility for only the patients with the most advanced stages of the disease have served to ameliorate the impact of coverage for HCV drugs, greater discounts could provide much wider access to the treatments to all those than can benefit. According to executive director of the National Association of Medicaid Directors, Matt Salo, "policymakers need to work together to create innovative policy solutions aimed at making these drugs more affordable and accessible to the patients that need them".

Although 2014 was a difficult year for most drug insurers, pharmacy benefit managers, and public programmes in the US regarding management of the HCV demand for treatments with the budget constraints it is likely that moving forward, significant discounts driven by increased competition on the market and negotiated rebates with payors will make the treatments much more accessible (see United States: 11 March 2015: US prescription drug spend increases 13% in 2014, largest growth in over decade). It remains to be seen if the pricing debate fuelled by these breakthrough treatments will culminate in pricing regulation or oversight in the US.

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