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A new drug has a 90 to 100 percent chance of curing the Hepatitis-C virus, but costs tens of thousands of dollars for a course of treatment. The announcement by the manufacturer that it earned more than $2 billion in the year’s first quarter raises the question, who should pay when drugs are highly effective, but extremely expensive? Hari Sreenivasan reports on the profits, coverage and costs.
Now: Who should pay when drugs are very effective, but extremely expensive?
That's an important question for the U.S. health care system as new treatments come along, and it's a matter of real concern over a new drug that has a 90 percent to 100 percent chance of curing the hepatitis C virus. Its manufacturer announced record sales yesterday of more than $2 billion in just the first quarter of the year.
Profits, coverage and costs are all at issue, as Hari Sreenivasan reports.
Kim Bossley knows how fragile life can be. In 2005, Bossley was diagnosed with hepatitis C, a blood-borne virus that can destroy the body's liver.
I went from stage one to stage four, decomposed liver, very quickly.
News of her rapidly declining health was devastating for the 46-year-old mother of two.
You fall into a depression when you're diagnosed with hep C. Your own mortality rate hits you.
DR. GREGORY T. EVERSON, University of Colorado Hospital: That's a pretty good response.
This fall, after nine years of battling the virus, Kim Bossley was accepted into a treatment trial with a new drug called Sovaldi.
DR. GREGORY T. EVERSON:
So, Kim, we will check your labs here.
Almost immediately after taking Sovaldi, the hepatitis C virus disappeared.
Not detected, not detected, not detected.
Bossley's doctor, Gregory Everson, is an expert on the hepatitis C virus. He says results with Sovaldi are remarkable.
Do you feel like you can do what you want to do on this treatment?
A hepatologist at the University of Colorado hospital, Everson has treated some 200 patients with the new drug.
Kim's response is typical. Her viral load was in the millions — within a week or two, undetectable. That is what we're seeing in almost all the patients we're treating today. It's really quite extraordinary.
In fact, across the United States, hepatitis C patients are experiencing the same dramatic results, so much so that Dr. Everson calls the new drug manufactured by Gilead Sciences a game-changer.
We're not talking about chronic disease anymore. We're talking about getting rid of the infection completely. We're talking about a complete cure rate.
And that is welcome news for the three million Americans infected with the hepatitis virus, 25 percent of whom are projected to die from it.
Even better news, in December, the Food and Drug Administration approved Sovaldi. But as spectacular as Sovaldi appears to be, so too is its price tag. Each pill is $1,000. And at a typical treatment of 120 days, the drug's extraordinary cost has raised concerns.
MATT SALO, National Association of Medical Directors: The new development is simultaneously very exciting in terms of its efficacy, but potentially very, very frightening in terms of its cost, because we're talking about a nexus of a drug that is, on the face of it, very expensive.
Matt Salo heads the National Association of Medicaid Directors. He says states are scrambling to figure out how to pay for Sovaldi with government-funded insurance, particularly when existing drugs are 50 to 70 percent effective.
Medicaid is actually kind of used to dealing with pharmaceutical treatments that are very expensive, but for small numbers of people. With hepatitis C, we know there are at least three million people and potentially as many as five million people in this country who have hepatitis C.
So when you multiply those two, you are really looking at a game-changer in terms of cost.
One a day of that one.
Kim Bossley's treatments are free because she's part of the study for those with advanced liver disease. And while she agrees the drug's price tag is high, she says the combination of drugs she used before Sovaldi, interferon and ribavirin, were extremely rough.
There is no comparison.
Her previous drug treatment, she says, caused exhaustion, depression and hair loss.
It is a very harsh regimen. It's very debilitating.
In fact, Dr. Everson said the existing drug treatments are so tough on his patients, many hepatitis C sufferers avoid them altogether.
Most patients didn't even want the treatments because of the side effects. People wouldn't even come for treatment. They wouldn't get their hepatitis C addressed.
And beyond the physical costs, Everson says there is a price for in the curing the virus.
It's one of the costliest diseases when you get to the end stages, where people start to have complications of cirrhosis.
That point is echoed by John McHutchison, executive vice president at Gilead Sciences.
JOHN MCHUTCHISON, Gilead Sciences, Inc.:
The costs of caring for patients with hepatitis C are not all up front. So whilst it might be expensive to treat somebody up front now, by curing somebody, you are preventing the costs of care of that patient later on, so, as their disease progresses over time, the cost of liver transplant, the cost of caring for somebody with liver cancer.
So if you can treat more people, and spend those dollars up front to cure those people, in the long-term, and over the long-term horizon, you will save the costs to the health care system.
If you are one of the millions of people with hepatitis C, you haven't been forgotten.
But while Gilead calls Sovaldi a cure, it is not a vaccine. Hepatitis C, which is transmitted through blood, can be contracted more than once. The most common way to get the virus is through I.V. drug use.
One of the things to keep in mind with Sovaldi is that this is not an immunization. This doesn't make someone hepatitis-free forever. And if you got hepatitis C because of certain risky behaviors and you go and you get, in effect, cured, there is nothing to prevent from you getting it again if you relapse back into those same behaviors.
Kim Bossley contracted the virus from a blood transfusion at her birth. Bossley was the first baby born to a mother who had undergone a kidney transplant. She was featured in "Good Housekeeping" magazine as a miracle baby. During the birth, Kim's mother received a transfusion of blood infected with hepatitis C.
But neither knew they had the virus until getting sick later in life. Bossley's mother ended up dying from the condition, something that makes Kim's own condition even tougher.
Seeing my mom suffer through the latter part of her stages, it really took a lot out of me, to the point where I finally had to — you know, this is not how mom or I want to live. You know, I want to fight. I want to find a cure.
As new sophisticated drugs to treat all kinds of conditions enter the market, Matt Salo says the question of costs will likely arise again.
It's not a Sovaldi question, per se, because this really is the tip of the iceberg. There are so many other drugs that have the potential of bringing on one hand, you know, incredible improvements in human life and health and well-being, but on the other hand extraordinary costs.
Salo would like to see a national dialogue about what insurers should cover.
I think it is critically important that we start having that conversation about, how do we value health, what price health, and what price pharmaceuticals? I think this is an important conversation we need to have.
For her part, Kim Bossley has started a foundation to hep offset drug costs for other hepatitis patients.
Online, you can read about how free samples can influence what doctors prescribe to their patients. That's on our health page.
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