cents and sensibility of hcv treatmentmedia.mycme.com/documents/245/13_wong_show_final_61004.pdf•...

Cents and Sensibility of HCV Treatment

John B. Wong, MD Professor of Medicine Tufts University School of Medicine Chief, Division of Clinical Decision Making Tufts Medical Center Boston, MA

Disclosures

• No commercial funding • Member of AASLD IDSA HCV

Guidance Panel • Co-chair, American Medical

Association-convened Physician Consortium for Performance Improvement for Hepatitis C

Objectives

• Describe drug pricing and cost-effectiveness of current all-oral DAA-based regimens

• Compare differing approaches: “test and treat” vs. stratified therapy based on disease staging

• Discuss the affordability of DAA regimens to payers

Nagle TT, Holden RK The Strategy and Tactics of Pricing 2002;

“Pricing is the moment of truth─all of marketing comes to

focus in the pricing decision”

− E. Raymond Corey

How did the company determine the price for

sofosbuvir? http://www.finance.senate.gov/ranking-members-news/wyden-grassley-sovaldi-investigation-finds-revenue-driven-pricing-strategy-behind-84-000-hepatitis-drug

Pricing

• Pharmasset: $62.4M • Morgan Stanley (5-7/11): $24-36,000 • Pharmasset (12/6/11): → $36,000 • Barclays (11/13/11): $55-75,000 • Gilead (1/17/12): $11.2B

Pricing

• Clinical attributes: faster, >efficacy, ↓IFN • Value determination

– Cost per SVR • Market research

– $80-90,000 acceptable access • Cost of current products

– Telaprevir $55,275 – Peg/Riba x 36 weeks $82,496

Pricing

• $80-85,000 ‘‘price will allow Gilead to capture value for the product without going to a price where the combination of external factors and payer dynamics could hinder patient access to uncomfortable levels.’’

Suppose a Treatment Purchases Added Years at a Price of

$250,000 per Added Life-year • Option A: American society should

purchase that added life-year for all . . . taxpayers should be compelled to pay extra taxes

• Option B: Americans with the means to purchase . . . or who have private health insurance, should be afforded the opportunity to purchase those added life years for themselves or their families

Reinhardt U. Pricing Human Life(-Years). The New York Times. 2009. http://economix.blogs.nytimes.com/2009/03/20/pricing-human-life-years/

Projected HCV Burden in US

Razavi H et al Hepatology 2013;57:2164-2170

Do the Currently Approved DAAs Provide Value?

• Besides Efficacy and Effectiveness, must now understand Economics or Efficiency or Cost-effectiveness

• Value = “Fair Price”? Does clinical benefit justify cost?

Cost-effectiveness Analysis

• Considers costs of drugs, drug monitoring, adverse effects, and tests and costs of the disease

• Savings from prevention or alleviation of disease complications

• Accounts for death, disability, discomfort, drug toxicity and dollars

“Our advice: Beware of geeks bearing formulas.”

─Warren Buffett

http://www.nytimes.com/2009/03/01/business/01buffett.html?_r=0

Incremental Cost-Effectiveness Analysis

(ICER)

Value = Additional cost ÷ additional benefit

Cost with New Drug – Cost with Standard Care Effectiveness with New Drug – Effectiveness with Std Care

Incremental Effectiveness

Incremental Costs

↓ Costs ↑ Effectiveness

Cost-Saving

↑ Costs ↓ Effectiveness

Dominated

↓ Costs ↓ Effectiveness

↑ Costs ↑ Effectiveness

Cost-Effectiveness Ratio

Simplified Simulation Model Time

0

1

2

CHep

Cirr

Cirr CHep

CHep Dead

Dead

Which Option Would You Prefer?

$100 Now $100 in 1 Year ?

Option A Option B

Would You Prefer to Live One Year with:

6 quality-adjusted months

1 year

? Perfect Health Hepatocellular CA

Option A Option B

What is Good Value?

$0

$25,000

$50,000

$75,000

$100,000

ICER

($/Q

ALY

Gai

ned)

>$1 million

?

Pignone M Ann Intern Med 2002;137:96; Freedberg KA N Engl J Med 2001;344:824; CDC Diabetes Cost Effectiveness Group JAMA 2002;287:2542 Winkelmayer WC Med Decis Making 2002;22:417; Heudebert GR Gastroenterology 1997;112:1078

Buying Health for $1 Million

0

20

40

60

80

100

ICER

($/Q

ALY

Gai

ned)

Pignone M Ann Intern Med 2002;137:96; Freedberg KA N Engl J Med 2001;344:824; CDC Diabetes Cost Effectiveness Group JAMA 2002;287:2542 Winkelmayer WC Med Decis Making 2002;22:417; Heudebert GR Gastroenterology 1997;112:1078

Genotype 1 Treatment Naïve: All Oral vs PegIFN+Ribavirin+PI

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Ledipasvir Sofosbuvir

Simeprevir Sofosbuvir

Daclatasvir Sofosbuvir

Omb-Par-Das

ICER

($/Q

ALY

Gai

ned)

Chhatwal Najafzadeh Zhang Chidi

Cost-saving

Cost-saving

Chhatwal J et al Ann Intern Med 2015;162:397-406; Najafzadeh M et al Ann Intern Med 2015;162:407-19; Zhang S et al BMC Gastroenterology 2015;15:98; Chidi AP et al Hepatology 2016;63:428-36

Genotype 1 Treatment Naïve: All Oral vs PegIFN+Ribavirin+PI

0.00

0.20

0.40

0.60

0.80

1.00

1.20

$0 $20,000 $40,000 $60,000 $80,000

Incr

emen

tal E

ffect

iven

ess

(QA

LY)

Incremental Costs

Ledipasvir Sofosbuvir

Daclatasvir Sofosbuvir

Simeprevir Sofosbuvir

PegIFN+Ribavirin+PI

*

Najafzadeh M et al Ann Intern Med 2015;162:407-19

$14,432 per QALY gained

Objectives

• Describe cost-effectiveness of current all-oral DAA-based regimens

• Compare differing approaches: “test and treat” vs. stratified therapy based on disease staging

• Discuss the affordability of DAA regimens to payers

http://www.medpagetoday.com/MeetingCoverage/CROI/50246?xid=nl_mpt_DHE_2015-03

Treat Now?

• Higher SVR pre-F3 or F4

• Nonlinear progression

• Extrahepatic disease

• HCC risk after SVR (2-5 / 1000)

• Not all patients progress to F3 or F4

• HCC risk F3 or F4 SVR (7-15 / 1000)

• Future therapeutic improvements with reduced costs

Wong JB, Koff RS Ann Intern Med 2000;133:665-75; Morgan RL et al Ann Intern Med 2013;158:329-37; Simon TG, Chung RT Hepatology 2015;62:666-7

60 year-old F0 Genotype 1 SVR 96% for $73,500

$0

$50,000

$100,000

$150,000

$200,000

$250,000

F0 F1 F2 F3

ICER

($/Q

ALY

Gai

ned)

Treat at Fibrosis Stage

Chahal HS et al JAMA Intern Med 2016;176:65-73

Objectives

• Describe cost-effectiveness of current all-oral DAA-based regimens

• Compare differing approaches: “test and treat” vs. stratified therapy based on disease staging

• Discuss the affordability of DAA regimens to payers

http://www.cbo.gov/publication/51129

https://www.cbo.gov/publication/51129

Health Budget Limitations

• 2014 U.S. health care expenditures $3.0 trillion or 17.5% of GDP

• “Every country spends 100% of its gross domestic product on something”

• What is important is the value obtained by the spending: opportunity costs

Fuchs VR Ann Intern Med 2005;143(1):76-8; http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html

Cost-effective but Affordable?

• Cost-effectiveness ≠ cost-savings • Cost-effectiveness analysis

– Takes societal perspective – Long-term time horizon – ↑ medication now ↓ hospital, outpatient

future • Prescription for uncontrolled costs

Gafni A, Birch S Can Med Assoc J 1993;148:913-7; Kamal-Yanni M Lancet Global Health 2015;3:e73-4

http://kaiserhealthnews.org/news/most-illinois-medicaid-patients-denied-new-hepatitis-c-drugs/

http://kaiserhealthnews.org/news/most-illinois-medicaid-patients-denied-new-hepatitis-c-drugs/

http://www.bostonglobe.com/business/2015/02/27/obamacare-drug-costs-drive-operating-losses-for-mass-health-insurers/GOi2SXKKwhQ3AZ3g1wuxDM/story.html

Peterson-Kaiser Health System Tracker

Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) Historical (1960-2014) and Projected (2014-2024) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group (Accessed on December 7, 2015) Note: 2014 to 2015 percent changes are calculated using 2014 actual and 2015 projected amounts.

Growth in prescription spending had slowed, but increased rapidly in 2014 and 2015

Average annual growth rate of prescription drug spending per capita for 1970’s – 1990’s; Annual change in actual prescription drug spending per capita 2000 – 2014 and projected prescription drug spending per capita 2015 - 2024

7.1%

11.8%

10.4%

14.7% 13.7%

12.6%

10.9%

8.1%

5.4%

8.2%

4.2%

1.5%

3.8%

-0.7%

1.5%

-0.6%

1.6%

11.4%

9.6%

3.6%

5.2% 4.7% 5.1% 5.5% 5.6% 5.8% 5.8% 5.9%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

1970

s

1980

s

1990

s

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Prescription (Actual) Prescription (Projected)

Total Health (Actual) Total Health (Projected)

Is limiting all oral HCV medications to Metavir stage 3 or 4 liver disease – A: Rational – B: Rationing

Areas for Consideration • “How should an innovative therapy’s value

be represented in its price?” • “What measures might improve price

transparency . . . while maintaining incentives . . . to invest in new drug development?”

• “What tools . . . address the impact of high cost drugs and corresponding access restrictions . . . on low-income populations and state Medicaid programs?”

http://www.finance.senate.gov/ranking-members-news/wyden-grassley-sovaldi-investigation-finds-revenue-driven-pricing-strategy-behind-84-000-hepatitis-drug

Conclusions

• All oral DAA-based regimens likely “cost-effective”

• Staging and stratified therapy may improve cost-effectiveness

• Budget impact of DAA regimens has been substantial