For a long time, conspiracy theorists posited that the pharmaceutical industry wouldn’t create drugs to actually cure disease, because it wasn’t profitable to help patients get and stay better. There was more money to be made, this cynical narrative went, in developing medicines that must be taken every day forever. Those who’ve dedicated their lives to searching for cures understandably found this accusation offensive.
Yet, here we are at the dawn of a new era of personalized medicine and miracle remedies. Our scientists have cured hepatitis C, but many payers don’t want to pay despite the opportunity to solve a huge public health challenge and eradicate the leading cause of liver cancer and liver transplants in the United States.
Today is World Hepatitis Day, a time to rededicate ourselves to the global goal of eliminating viral hepatitis. This will require greater awareness, increased testing, public and private interventions (including vaccination), and more education about treatment options and blood and injection safety.
But right here at home, the most important thing we can do to eradicate this disease is ensure patient access to the cure.
There is a backlog of some 3.2 million Americans living with hepatitis C, and payers say they can’t afford to cure so many people at once. As a result, many insurers have gone out of their way to make it difficult for patients with hepatitis C to access the cure.
Some insurance plans require patients to have advanced liver disease before approving the drug. Some Medicaid programs have sobriety requirements that deny the cure to patients unless they can prove they’ve been alcohol- or drug-free. Many insurers mandate that only specialists can prescribe the hep C drugs, requiring patients to pay multiple co-pays and see a physician they may not know or trust. These are all known as “utilization management” techniques, and their purpose is to encourage patients to give up. This saves the insurance company money.
When the first hepatitis C cure came on the market, the list price for a course of treatment was $84,000. This didn’t include rebates and discounts given to many segments of the market. Over the last three years, commercialization of additional hepatitis C cures already has halved what insurers pay, because competition lowers costs. These prices will continue to fall as patents expire and therapies go generic.
Express Scripts, the largest U.S. pharmacy benefit manager, reported that spending on hepatitis C medications fell by one-third last year. Over the next three years, it projects spending on these cures to fall 65 percent below current levels. Indeed, that’s the nature of cures — spending declines as fewer patients need treatment. Our goal is for the medicine to become unneeded.
Consider this: The average lifetime cost to treat diabetes is $85,000, and insurers don’t blink an eye about covering insulin because they realize it’s cheaper than paying for kidney transplants, dialysis or other treatment for serious diabetes-related complications.
Similarly, curing hepatitis C is a bargain. The price of the cure is a fraction of what it costs to finance liver transplants, treat liver cancer, or clog up emergency rooms and urgent care facilities with patients who otherwise might be cured in a matter of weeks. The new hepatitis C cures lengthen lives, stabilize families and improve an individual’s productivity for decades to come.
It is true that curative therapies, which are taken for a short time but provide a lifelong benefit, pose a challenge for our existing health care payment system, designed decades ago around the experiences of chronic treatment and care. But if there’s a medication that’s extraordinarily valuable, saves the healthcare system money, saves lives, reduces suffering, and helps patients live longer and contribute more, shouldn’t we expect insurers to cover these breakthroughs? Shouldn’t we all be willing to work together to make it happen?
If we don’t, we’re sending a toxic signal to the market that curative therapies aren’t valued by our health care system because, despite the long-term savings, their development costs are more than society is willing to pay. We must not go down this road; too many patients are counting on us.
The hepatitis C drugs are only the beginning. There are more actual cures in the biopharmaceutical pipeline today than ever before. As this exciting new era of modern medicine dawns, we must adapt by reforming our payment systems to meet the challenges of our time.
Senator Bill Cassidy (R-La.) was a liver doctor before coming to Congress. He noted that many state Medicaid programs won’t cover hepatitis C cures because of their high up-front costs. So he has proposed a mortgage-style payment system that would allow cash-strapped Medicaid programs to pay for the costs of these treatments over time, as their benefits are realized.
Another creative way to finance expensive specialty drugs is using a reinsurance model. Here, the costs of treatment would be borne by a risk pool of multiple payers. An insurer who covers an expensive drug would be reimbursed by the pool for a portion of a high-cost patient’s claim. This approach would share the responsibility to finance new cures for larger patient populations.
We need our leaders to embrace creative thinking about alternative financing methods to broaden access to biopharmaceutical advances. Yesterday’s thinking won’t incentivize tomorrow’s cures. We can eradicate hepatitis C within our borders in short order if we come together to devise and refine a drug payment system that’s half as innovative as our recent discoveries in the lab.
Jim Greenwood, a former six-term member of Congress from Bucks County (Pa.), is the CEO of BIO, the world’s largest trade association representing the biotechnology industry.
The views expressed by contributors are their own and not the views of The Hill.