(Bloomberg) — Health insurers that have been reluctant to cover hepatitis C drugs with list prices of $1,000 a daily dose will face more pressure after a report concluding the medications are “cost-effective” given their benefits.
The report, still in draft form, is by an influential panel of doctors and medical experts that helps insurers set policies. While insurance companies already cover the sickest patients for treatments by Gilead Sciences Inc. (Nasdaq:GILD) and AbbVie Inc. (Nasdaq:ABBV), they’ve resisted extending coverage to people who aren’t yet showing damage from the disease. Even with negotiated discounts, the pills can cost hundreds of dollars a day.
The 32-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. Its recommendations, which haven’t previously included cost-effectiveness language, will give doctors backing to argue that insurers should make the drugs more widely available.
The answer to whether these drugs are cost-effective is “a resounding yes,” Benjamin Linas, a member of the group and a doctor at Boston Medical Center, said by phone. The conclusions will be issued soon, Linas said.
Linas co-wrote a separate paper that found that Gilead’s drug was only cost-effective for some early-stage patients after being discounted between 40 percent and 60 percent. The panel’s report refers to the cost of the drugs after discounts, Linas said.
Health insurers and government programs have negotiated discounts of almost half of Gilead’s list price, on average, the company has said.
Still not cheap
The way the panel defines it, being “cost-effective” doesn’t mean that a drug is cheap or will save a patient money in the long term. It means the treatment is worth the price because of its health benefits, weighing its value against its expense and comparable treatments.
“If you look at the catalog price, which is like the sticker price on the car, no one actually pays that,” Linas said. “The more realistic, actual cost, the price people are paying — it’s in the cost-effective zone.”
The report’s cost-effectiveness conclusions aren’t meant to tell doctors how to treat patients, he said, but rather to help them “when they engage with payers so they have some sense of what the big-picture environment is.”