A drug offers better care for a disease that affect millions. How can it be ‘low value’?

By costing $1,000 a pill. The new hepatitis C treatment puts drug costs on the media agenda

When we first took a look at media coverage of Sovaldi, the new wonder drug to treat hepatitis C, late last year, reporters were paying startlingly little attention to the cost of the drug: $1,000 per pill, or $84,000 for a 12-week treatment. As we’ve followed the coverage since then, cost has increasingly come to the fore in reporting and commentary at outlets like The New York Times, Kaiser Health News, NPR, and The Washington Post. And after an article last week from The Associated Press, you have to expect that any new coverage of Sovaldi—or other hepatitis C treatments—is going to, at the every least, acknowledge the price tag. Nudged along by patient advocates and other industry players, drug costs are getting onto the media’s agenda.

The AP article reported that a panel of medical experts known as the California Technology Assessment Forum—a group that’s affiliated with the insurance industry and was recently incorporated into the Boston-based Institute for Clinical and Economic Review—had concluded that Sovaldi, made by Gilead Sciences, and a similar new drug from Johnson & Johnson were “low value” treatments. The drugs really are superior to older therapies, the panel said. But because of their cost, they were recommended only for patients with severe complications.

The hepatitis C virus is carried by an estimated 3 to 4 million Americans, and “the combination of the huge patient population and the price of the pills is creating a real tension in the system about the potential affordability of these drugs,” said Dr. Steve Pearson, who leads the group’s hepatitis drug assessment, according to the AP. In other words doctors, insurance payers, and other health experts are having second thoughts about whether the price is worth the outcomes for patients. A final report on Sovaldi (also known by its generic name sofosbuvir) and the J&J-developed competitor, Olysio, is expected next month.

The AP article carried some other pertinent information: some patients may need a second course of Sovaldi, which would bring the total cost to $168,000. Most patients would also still need to take traditional injectable drug cocktails. (Olysio is only slightly less expensive, at $66,000 per course of treatment.) The panel took into account Gilead’s argument that the drug’s costs will be recouped over the long term thanks to less spending on hepatitis complications, but concluded that after 20 years the offsetting reductions would equal only two-thirds of Sovaldi’s upfront costs. And the AIDS Healthcare Foundation, a patient advocacy group, has urged state Medicaid providers to deny coverage for Sovaldi until Gilead lowers the price.

If they do offer coverage, Medicaid programs—already under attack over the costs they impose on state budgets—will bear much of the price burden. About one-quarter of people with HIV infection also have hep C, and patients with both diseases are more likely to be enrolled in Medicaid.

The technology group’s assessment is especially important for reporters because there are few remaining avenues that offer public cost/benefit analyses for new drugs. Congress killed the federal Office of Technology Assessment years ago, and while the Affordable Care Act includes controversial features to restrain overall Medicare spending, Medicare is prohibited from taking cost-effectiveness into account when determining whether a particular new drug should be covered. It can also hard to get Medicaid officials to talk about their calculations. “Informally Medicaid directors say some things cost too much for them to cover, but they don’t say that publicly,” one expert who works in the field told me.

Meanwhile, Gilead Sciences has begun its direct-to-consumer advertising campaign with a soft-sell approach that urges aging boomers who might have the disease to begin a conversation with their doctors. The message: You haven’t been forgotten, and there’s never been a better time to benefit from scientific advances. At the same time, industry analysts are buzzing about record-breaking prescription rates, billions in annual sales, and potentially “industry analysts the best-selling medicine of all time.” Whether Sovaldi proves to be a medical miracle, as its boosters say, time will tell. But it’s already kick-started an important conversation about drug costs—and the AP story has given reporters more angles to explore.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , , , , , ,