The brave new world of pharmaceutical economics and clinical outcomes continue to collide in the real world of healthcare delivery. A recent
The brave new world of pharmaceutical economics and clinical outcomes continue to collide in the real world of healthcare delivery. A recent Bloomberg News story stated that Express Scripts plans a specialty drug price war over new hepatitis C treatments. That news follows the release of a new drug, sofosbuvir (Sovaldi, Gilead), which reportedly costs $1,000 per pill.
There is no question that 6-figure prescription drug costs raise the ante for more attention by plan sponsors and patients. Many more biologic-based or specialty drug therapies are poised to enter the market for cancer, multiple sclerosis, arthritis, and orphan disease conditions. However, the healthcare reform has generated high deductible health plans, with correspondingly high cost sharing methods, and puts a greater emphasis on “affordable” while begging the question of who is really going to pay for these drug costs.
As Adam J. Fein, PhD, president of Pembroke Consulting, Inc. and CEO of Drug Channels Institute, noted on Drug Channels: “Along with Vertex and Merck products, sofosbuvir is not the first novel oral hepatitis treatment to be released. Simeprevir (Olysio, Janssen) is another new hepatitis C treatment, but is only indicated for patients with the common genotype 1 disease form. By contrast, sofosbuvir was approved to treat a significantly larger patient population-people with genotypes 1, 2, 3, or 4,” an increasingly important criteria using gene-based markers when determining optimal therapy.
Dr Fein also pointed out that Express Scripts projects the hepatitis C drug trend will grow by 168% by 2015, so commercial plan payers are closely watching this test case. For hospitals, health systems and group purchasing organizations (GPOs), what does the Pharmacy and Therapeutics (P&T) committee or purchasing staff do when there are multiple treatments in a therapeutic class that are not interchangeable? Does a licensed care professional really think that a competitive pricing or contracting strategy will be that successful when a single oral dose therapy to hep C with a 95+% sustained virologic rate (SVR) rapidly becomes the standard of care?
Dr Fein also stated: “Although simeprevir and sofosbuvir are the two newest players multiple companies are in the hepatitis market, including AbbVie which has a hepatitis C regimen in its pipeline with a 96% SVR for genotype 1. SVR is essentially a cure rate, so AbbVie’s high success rate may make the drug regimen well positioned to jump into the fight at any minute, pending FDA approval. These treatments do not appear to be therapeutically interchangeable.” For P&T committees, the question also is where should the battle lines be drawn on behalf of patients and their own organization who may be sharing the financial risk of treatments?
A related issue to consider is the looming “precautionary” or preventive prescribing trends that will likely open up the flood gates for treatment because of the recent CDC hepatitis C guidance for adults who are older than aged 50 years. Those healthcare entities with large primary care services could be on the hook for a different set of economic considerations that may clash with population health.
Advancing technologies in drug therapy show no favorites in the marketplace, yet many third-party entities continue to follow old technology management patterns with public relations campaigns for marketing their tools. Clearly innovation is required and critical decisions will be facing formulary leaders in 2014.
Hepatitis C may become the first poster child for the new decision-making questions that have greater meaning in a healthcare reform landscape for drug, diagnostic, and device manufacturers as well as hospitals and managed care.
Vogenberg is principal, Institute for Integrated Healthcare and Access Medical Intelligence, Greenville, S.C.
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