Cents and Sensibility of HCV Treatmentmedia.mycme.com/documents/245/13_wong_show_final_61004.pdf•...
Transcript of 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