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Doctor panel to weigh hepatitis C drugs’ costs

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(Bloomberg) — An influential advisory panel of doctors and health experts will for the first time address the cost-effectiveness of pricey hepatitis C drugs in updated guidelines that may change prescribing and coverage for the medicines.

The 30-member panel is a joint effort by the American Association for the Study of Liver Diseases and the Infectious Diseases Society of America, which together represent more than 10,000 physicians, health workers and scientists. The guidelines are used by doctors for expertise on how to treat patients and by insurers and governments in setting policy.

Health insurers and government programs have been grappling with the cost of the pills. Made by Gilead Sciences Inc. (Nasdaq:GILD) and AbbVie Inc. (Nasdaq:ABBV), they offer higher cure rates and fewer side effects than older medicines, though their $1,000-a-day price tag has generated criticism.

“The panel will explicitly consider cost and cost-effectiveness,” Benjamin Linas, a member of the group and a doctor at Boston Medical Center, said in an e-mail Thursday.

Since last year, Gilead and AbbVie have been engaged in a back-and-forth price war, offering discounts to health insurers and pharmacy benefit managers in return for access to their patients or exclusive arrangements. The result has been deep price cuts — Gilead said it will discount its drugs Sovaldi and Harvoni by 46 percent this year, on average.

Gilead shares declined less than 1 percent to $103.53 and AbbVie shares were down less than 1 percent to $60.50 at the close in New York.

3 million

With more than 3 million Americans living with hepatitis C, health payers face a challenge to afford treatments like Harvoni, which can cost $94,500 for a 12-week course. Harvoni and Sovaldi are projected by analysts to sell $16 billion in 2019.

With discounts, AbbVie’s and Gilead’s drugs are more cost-effective, which should make payers more willing to treat all hepatitis C patients, said Steve Miller, chief medical officer at Express Scripts Holding Co., the biggest U.S. pharmacy benefits manager.

“What we’re recommending to our plan sponsors is that we treat everyone,” Miller said in a telephone interview. “As a physician, the idea that you have a curative therapy that is now affordable and that you would want to wait until people have end-organ damage just doesn’t make clinical sense.”

Cara Miller, a Gilead spokeswoman, declined to comment. A spokeswoman for AbbVie didn’t respond to a request for comment on the guidelines.

Economic sense

“It makes good economic sense to use these therapies,” Linas said. “But actually treating over 3 million HCV-infected patients will cost hundreds of billions of dollars — much of it charged to Medicaid and the prison system.”

Though the current guidelines don’t yet reflect it, “we all feel that it would be naive and unhelpful to make such recommendations without also speaking to the real cost concerns surrounding their use,” he said. “This is not to say that the panel is primarily considering cost-effectiveness in making its choices about appropriate therapy.”

Many hepatitis C patients are older — than 75 percent of adults infected with the virus were born between 1945 and 1965, according to the U.S. Centers for Disease Control and Prevention. The virus is also far more prevalent among the incarcerated. The CDC estimates that 12 percent to 35 percent of U.S. inmates are infected with the virus, which affects only 1 percent to 1.5 percent Americans out of prison.

Treat everyone

The price of medicine has come under scrutiny in the U.S., with hepatitis C as a major focus along with cancer. Last year, the world’s largest group of oncology doctors said it would begin assessing the price of cancer drugs and encourage doctors to discuss their costs with patients.

The current hepatitis C guidelines say that “evidence clearly supports treatment in all HCV-infected persons, except those with limited life expectancy,” but that immediate treatment is constrained by resources and “should be prioritized as necessary.”

While the guidelines are intended to be medical recommendations rather than policy suggestions, some payers have used them as a means of blocking treatment to earlier-stage patients, according to Daniel Raymond, a member of the panel and policy director of the advocacy group Harm Reduction Coalition.

Cost containment

Washington state’s Medicaid program for the poor, for example, only provides care for the “most acute cases” of hepatitis C, Amy Blondin, a department spokeswoman, said in a telephone interview.

“It’s really unfortunate that payers use the guidelines as an alibi for their own cost-containment strategies,” Raymond said in a telephone interview. “We’ve worked to clarify our language and that’s something that we’ll keep looking at. But at a certain point if we had a paragraph that said, ‘Treat everybody immediately,’ I don’t think that would affect payer behavior. They’re making an economic decision, not a clinical decision.”

The group hopes to publish the changes within the next few months, according to Henry Masur, co-chairman of the panel and head of the U.S. National Institutes of Health’s critical care medicine department.

The panel wants to “make the cost issue transparent,” Linas said. “Hopefully, that discussion provides ideas for cost control, as well as support to payers/agencies who want to follow guidelines, but simply cannot do so due to total cost.”