(If, instead, you are looking for July 23/30 JAMA paper on the cure rates in co-infected folks that kind of made the news overnight, that link (also full free text) is here.)
Treatment of infection with hepatitis C virus (HCV) has changed substantially in the last 3 years, with new therapies now reaching cure rates (defined by sustained virologic response) higher than 95%. As little as 3 years ago, treatment involved an arduous course of pegylated interferon and ribavirin, which caused serious adverse effects in more than 80% of patients; less than 50% of patients could finish the treatment course.
In 2011, introduction of the first generation of protease inhibitors, particularly telaprevir and boceprevir, heralded change. ... However, these agents were much more expensive than standard therapy, at a cost of more than $80 000 per course of therapy, and were associated with high levels of viral resistance ... if patients did not strictly adhere to therapy.
In 2014, the introduction of polymerase inhibitors set a new standard. The first in this class, sofosbuvir ... in patients with genotype 1 HCV. Sofosbuvir also can be combined with another new protease inhibitor, simeprevir, to treat patients in whom interferon-based therapy has failed. These regimens provide interferon-free treatment protocols that are shorter and well tolerated and have 80% to 95% cure rates. This fall, an oral combination of sofosbuvir and ledipasvir will be introduced ... and has been shown to reduce treatment to an 8-week course with cure rates of more than 95%. Now, a chronic disease that affects millions of Americans can be cured by well-tolerated oral medications.
The price of sofosbuvir is essentially $1,000 per pill, or $84,000 for a standard 12-week course. The fact that pricing in the United Kingdom for a similar regimen is $54,000, and perhaps as low as $900 in Egypt and other developing countries, indicates that the pricing in the United States is a purely financial decision by Gilead and has outraged many. Indeed, some pharmacy benefit managers are calling on their clients to boycott these products until alternatives are available late in 2014.
While a daily oral medication that costs $1000 per pill gains attention, the more important issue is the number of people eligible for treatment. With broader screening, the pool of eligible patients may be as high as 3 million in the United States alone. The simple math is that treatment of patients with HCV could add $200 to $300 per year to every insured American's health insurance premium for each of the next 5 years. Thus sofosbuvir is not really a per-unit cost outlier but is a "total cost" outlier ...
These costs will be especially burdensome over the next year. Presently, Gilead has a monopoly, and its investors expect it to make a profit during this period. However, it is anticipated that by December, another highly effective oral regimen will become available.
Given this context, how should costs be managed? In some state Medicaid programs, the new medications have not been added to the formulary, despite the new practice guidelines. Physicians for whom the drug is denied by the state are going to Gilead, and, by report, the company is quietly subsidizing the costs--there is an official assistance program offered by Gilead.
Some private insurers have added sofosbuvir to the formulary and are absorbing the costs but also are taking steps to ensure appropriate utilization by developing prior authorization programs based on practice guidelines. Some insurers are asking physicians to treat only patients who absolutely need therapy now.
The ultimate approach to cost will be lower prices, which will occur as more products create competition. However, it will likely entail narrower formularies, in which the physician choice of a particular medication is limited by the deals negotiated by insurers and pharmacy benefit managers.
For more on the business side of HCV drug development, as well as a bit of a look into the future of hep C rx, have a look at Matthew Herper's piece in Forbes magazine last month: Why Merck Just Spent $4B On New Drugs for Hepatitis C