January 09, 2020

Background Information

An estimated 3.5 million people live with chronic hepatitis C. In 2016, approximately 3,000 new cases of acute hepatitis C were reported to the U.S. Centers for Disease Control and Prevention (CDC). Actual acute cases are estimated to be 13.9 times higher than the reported numbers in any year due to significant underreporting and underdiagnosis.¹ Left untreated over time, hepatitis C can lead to serious liver damage and failure.

There are six different forms of hepatitis C (genotypes 1 through 6). About 75% of Americans with hepatitis C have genotype ¹. Until the development of “direct-acting antivirals” like Harvoni and other newer therapies, most treatments for hepatitis C had only been effective for this one form.²

In June 2013, the U.S. Preventive Services Task Force (USPSTF) recommended screening for hepatitis C for those at high risk for infection (e.g., those who had injected illicit drugs, received a blood transfusion before 1992 or received a tattoo with unsterilized tools), and one-time screening for all adults born between 1945 and 1965 (a USPSTF “B” recommendation).³ This expanded screening protocol led to an increase in the number of individuals diagnosed with hepatitis C and who chose treatment.

Historically, treatment for hepatitis C involved a complex dosing regimen, which took up to 48 weeks, was associated with severe side effects and had a cure rate of less than 50%.^4,5 In contrast, newly approved drugs offer higher cure rates (ranging from 90%-100% depending on the therapy), significantly shortened treatment time (as short as 12 weeks versus up to 48 weeks for older treatments), fewer side effects, easier administration (especially for regimens that do not require combinations with interferon), and simplified dosing schedules.⁶ As a result, these new treatments have transformed the management of hepatitis C and reduced the disease’s morbidity and mortality rates.⁷

The number of patients receiving treatment—and treatment costs—for hepatitis C spiked in 2014, largely because many physicians had been delaying treatment in anticipation of the new therapies.⁸ As treatments improved in versatility across genotypes, sales of older drugs have been outpaced by newer products entering the market at lower price points and with faster treatment courses.⁹

Quick Comparisons

Cure rates for these drugs are all above 90%, and each represents a major leap in clinical effectiveness over older therapies. There are notable differences between them, outlined below:¹¹

New Treatments and Clinical Breakthroughs

The FDA approved several new drugs for the treatment of chronic hepatitis C in 2013 and 2014, including two oral combination products: AbbVie’s Viekira Pak® (with or without ribavirin) and Gilead Sciences’ Harvoni®, which does not require the use of ribavirin. Ribavirin is an anti-viral medication used in conjunction with traditional hepatitis C treatments to help boost the response rate and deter relapse. Neither product requires the injectable medication, peginterferon alfa, which patients often cannot tolerate due to its unpleasant side effects. These new drugs presented consumers with superior efficacy claims compared to previously available therapies, including higher cure rates, shorter treatment duration and more convenient oral treatment regimens.

Since 2013, additional hepatitis C treatments have made their debut on the market, each building on the previous drugs to address the different disease subtypes and varying degrees of liver cirrhosis. There are now several pan genotypic medications designed to effectively treat all subtypes of the disease. For example, Abbvie’s Mavyret, approved in August 2017, offers an 8-week treatment course at a 2017 list price of $26,000, well below all other drugs on the market. Shortly after this approval, both Johnson & Johnson and Merck halted development of upcoming therapies to treat hepatitis C and have no plans for further development in this area.¹²

This leaves Gilead, AbbVie and Merck as the primary players in the hepatitis C medication market. While development of new drugs has slowed, Gilead has announced plans to release generic versions of Epclusa and Harvoni by January 2019, further driving drug costs downward. Generics, along with the introduction of cheaper and faster-acting medications, will provide much-needed relief from the high cost of hepatitis C treatment. Nonetheless, there are some concerns that even with Gilead introducing these generics at lower price points, uptake will be limited due to existing rebate structures in place for the older branded therapies.

Declining Utilization and Exclusivity Deals Accelerate Innovation in Formulary Creation

Express Scripts’ specialty pharmacy, Accredo, in return for exclusive placement on the PBM’s formulary for hepatitis C treatment. Additionally, AbbVie agreed to accept a flat price for a course of treatment, even for some patients that require a second round of treatment for it to be clinically effective. Express Scripts also removed utilization management criteria that had limited which providers could prescribe Viekira Pak®, as well as coverage constraints for hepatitis C patients with advanced symptoms, thus broadening access to these medications.

In response to the AbbVie-Express Scripts contract, Gilead Sciences (Sovaldi® and Harvoni®) agreed to a similar deal with CVS Caremark. This arrangement called for exclusive placement on its formulary and a reduction of utilization management controls in exchange for significant discounts.¹⁴

In both exclusivity arrangements, patients can petition for coverage of non-formulary hepatitis C treatments based on medical necessity. Those patients already on a covered course of a non-formulary medication for hepatitis C could continue and complete their course of treatment. The size of individual discounts is proprietary information, but Gilead did share with its stockholders in February of 2015 that the average discount on its hepatitis C drugs was 46%. Commercial discounts are likely even lower, as the U.S. Department of Veterans Affairs and state Medicaid agencies can obtain steeper discounts by law.¹⁵

Some large insurers have also collaborated on exclusivity deals with drug manufacturers to drive down the price of these drugs, requiring patients to “fail first” on a preferred drug before gaining coverage for competing therapies.¹⁶ For example, in January 2015, Anthem Blue Cross Blue Shield announced that it would embrace Gilead’s Harvoni® as its preferred product for hepatitis C genotype 1 after negotiating favorable discounts and a 2015 price freeze with Gilead.¹⁷

What Employers Can Do

• Require participation in a hepatitis C clinical management program (such as those offered by specialty pharmacy vendors) to optimize response in patients. These programs help support patients throughout their therapy, including educating them about their disease and treatment and helping them cope with any side effects. They can also play a role in promoting adherence and therapy completion. As part of this strategy, program participation also may include asking patients to commit to therapy completion by signing a patient contract. Promoting optimal adherence is important due to the high cost of hepatitis C drugs. Moreover, a recent study shows that treatment discontinuation is also a challenge for new hepatitis C therapies, although they are better tolerated than previously available drugs.¹⁸
• Implement coverage review through utilization management and prior authorization criteria for hepatitis C therapies. According to the USPSTF, not everyone with hepatitis C needs immediate treatment, and many patients without signs of liver damage can be monitored and treated only if the virus becomes active.⁴ Prior authorization criteria can limit exposure to costs associated with the use of these drugs in patients who are asymptomatic and whose treatment can be deferred. These considerations should be aligned with national guideline recommendations published by the American Association for the Study of Liver Disease.¹⁹
• Require medical records or clinical documentation to support the approval of hepatitis C therapies and ensure that clinicians conduct the prior authorization review.²⁰ These measures can ensure that the medication prescribed is appropriate for each patient and that coverage criteria and quantity limits are being applied correctly.
• Continue to work with your PBM and health plan to stay informed about post-approval clinical trial results from the new hepatitis C drugs, as well as the clinical trial data from forthcoming medications. These data will help employers make coverage decisions based on rapidly-evolving information on safety and efficacy, inform any necessary revisions to prior authorization criteria and help determine if any drugs should be given preferred status on the formulary.
• Work with your PBM to monitor prices for new hepatitis C therapies. Employers should make every effort to understand pricing options offered by their PBMs, including rebates, preferred vs. non-preferred formulary status and other interventions-that may potentially influence cost. As additional pipeline drugs are approved, continued innovation in this drug class and the potential for generics to further drive down prices may call for pricing conversations mid-year, as PBMs may be able to successfully negotiate deeper discounts for “preferred” treatments.

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