Hepatitis C Drugs: Who Wins and Who Loses?

August 16, 2017

 

 

 

It’s no secret that drug prices are a major problem in healthcare. Treatments for the hepatitis C virus (HCV) have a ripple effect from the individual to industrial scale. Manufacturers, the government, patients and practitioners all have something to gain—but even more to lose—with regard to these treatments.

 

This comprehensive analysis will outline the perspectives of each party involved in this issue. Some parties are winning, some losing. Regardless, this drug pricing controversy could alter the future of pharmaceuticals and the foundation of healthcare.

 

Manufacturers: Some Winning, Some Losing

 

The most successful HCV treatments are Harvoni and Sovaldi, both of which are manufactured by Gilead Sciences. These drugs also happen to be the top two most expensive prescription drugs in America. A 30-day supply of Harvoni costs a whopping $87,800, and for Sovaldi, it’s $73,800.


With about 71 million people suffering from hepatitis C worldwide, there should be a hot market for these revolutionary drugs—and there was, but it didn’t take long for the heat to fizzle out. Harvoni and Sovaldi made Gilead the leader in HCV, even tripling the manufacturer’s revenue. By 2016, however, the market started teetering. Harvoni sales dropped 34%, as well as Sovaldi’s (24%), from 2015 to 2016, meaning Gilead lost $6 billion in sales that year.

 

In 2017, the numbers look abysmal, as Gilead predicts that HCV sales will be down 44% from what they were in 2016. Even with its recently FDA approved HCV drug Vosevi set to hit the market soon, Gilead still struggles. How is this possible? There are several reasons, the first being that these drugs are simply too expensive for most people to afford.

 

Competing manufacturers are another factor. Gilead’s stocks dropped 20% when the FDA approved Viekira Pak, which was subsequently picked up be the prescription provider powerhouse Express Scripts. Express Scripts began offering this drug to its network of HCV patients, instead of Harvoni and Sovaldi.

 

This blow compelled Gilead to lower its drugs’ prices, but there won’t be a substantial cost cut until the patents expire. That is, unless the government intervenes.

 

Government: Potential Win

 

President Donald Trump has claimed that the staggerly high cost of drugs is something he would like to change. It may not seem like the President could have a direct impact on pharmaceutical manufacturers, but it turns out he could shake the foundation of the industry.

 

For starters, he could make more prescription drugs, like the notoriously expensive EpiPen, over-the-counter, as well as accelerate the approval process for generic drugs. Even with these changes, however, it’s still not enough. An overwhelming majority (80%) of U.S. drug sales consist of generic medications, so if accessibility of generics isn’t the problem, what is?

 

It all boils down to the patents. Patented drugs are the most expensive sector of medications, but a little legislative piece called the Bayh-Dole Act could change that. This act enables the government to manipulate patent distribution. Since the majority of pharmaceutical research and development is federally-funded, the government has the right to ensure that taxpayers dollars are well-spent.

 

The controversy regarding this act is a vague clause stating that the government can only intervene in the patent holder’s affairs if “reasonable terms are not being met,” which, even if it wasn’t the original intent, could be applied to outrageous drug pricing. For example, Gilead’s Sovaldi patent is already under attack by patient access groups. If the government gets involved, it could take the patent away from Gilead and give it to another manufacturer that will meet these arbitrarily “reasonable terms.”

 

Harvoni and Sovaldi are the two most expensive meds in America, making them viable targets if the government chooses to flex its power. The government has everything to gain in making this move. HCV drugs in particular have made a significant impact on America’s drug spending, partially accounting for the 12.4% expenditure increase in 2014. The U.S. already far exceeds any other country in drug spending at $450 billion, with $65 billion devoted to HCV-related costs alone. Those number are only going up with projections putting America at $610 billion in total drug spending by 2021.

 

Healthcare is expensive, in part because of these soaring drug prices. If the government doesn’t support providing universal healthcare, one way it could alleviate the costs for its citizens is through the Bayh-Dole Act.

 

The question now isn’t whether or not President Trump can do it—but rather will he do it? Until then, many of the 3.2 million Americans suffering from HCV will not be able to access these treatments, and this virus will continue to kill more Americans than any other infectious disease.

 

Patients: Losing

 

With the government on hold, taxpayers will continue to pay for the pharmaceutical research developing drugs that the majority of the public can’t afford. The patients are the ultimate losers in this issue. For them, it’s not just a matter of monetary gains and losses—but of life and death.

 

Federal aid for patients is where it gets tricky. The 2016 Medicare trustees report cite “increased use of new and expensive hepatitis C drugs” as a contribution to the significant increases in Medicare expenditure. Specifically, HCV meds accounted for a nearly 10% increase in Medicare Part D spending in both 2014 to 2015. During that same period, $18 billion of U.S. drug spending went to HCV drugs alone.

 

These drugs are draining Medicare, which is why the program established more stipulations to limit access. Many states won’t provide Medicare or Medicaid coverage unless the patient is in an advanced stage of the virus where they will have developed severe liver damage or cancer.

 

Medicaid may require that a healthcare professional perform a liver biopsy on a patient for assessment, which could result in pain, bleeding, infection and more. As if having a devastating virus isn’t enough, those with HCV have to risk more for the meager hope of getting better.

 

The unfortunate truth is that, if these stipulations didn’t exist, so many would benefit from these drugs. In fact, it’s because the demand for these treatments is so high that manufacturers can justify the costs. However, as evidenced by Gilead’s plummeting sales, manufacturers may be hurting themselves, as well as the patients they’re depriving, with these astronomical prices.

 

Practitioners: Only Time Will Tell

 

Gastroenterologists and hepatologists are the primary practitioners responsible for treating HCV patients, and both also happen to be among the top ten best-paying medical specialties. Gastroenterologists, in particular, are crucial to HCV treatment because they perform the liver biopsies to assess patients’ health, in turn potentially getting them access to Medicare or Medicaid.

 

According to CDC estimates, there were about 34,000 new cases of hepatitis C in America, and the trends indicate that HCV cases will continue to climb. As the number of cases increases, so too does the demand for more specialists.

 

There’s a catch, though. When HCV drugs like Harvoni and Sovaldi become more affordable, these meds will make treating patients easier and less risky. For this reason, the medical community is considering a new structure in HCV care, whereby patients can see a general practitioner (GP) for diagnosis and, if the infection isn’t too advanced, treatment.

 

As GPs take on more of the workload in HCV care, however, it could potentially eliminate the need for treatment from specialists altogether. Organizations like the American Academy of Family Physicians (AAFP) are pushing for policy changes that allow general practitioners to become more involved in HCV treatment, forgoing the “requirement of medical specialist consultation.”

 

More providers means better accessibility to quality care. Of course, these structural changes depend on the drugs first and foremost. Until the drug prices decrease, the government intervenes or health insurance policies change, everything will continue as is.

 

This HCV drug controversy is a tug-of-war on all sides. Of course, the real problem is the virus itself. What matters most in the midst of this devastating epidemic isn’t whether who wins or loses. It’s about ensuring that people stop suffering and dying unnecessarily just because everything is tangled up in corporate and political ties.

 

Giving people the quality care they deserve should be a collective goal within and outside of the healthcare community.

 

 

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