The following is part of a series of guest posts on hepatitis C by Allan Joseph, a medical student at the Warren Alpert Medical School of Brown University and TIE research assistant. You can follow Allan on Twitter: @allanmjoseph. Links to all posts in the series to which this post belongs are in the introductory post. That post includes a glossary of terms as well.
I’ve already covered what insurance companies might do, but let’s take a look at some other policy solutions that could theoretically solve the problem of sofosbuvir’s cost.
The last post in this series pointed out that using sofosbuvir for patients with advanced liver disease could very well save Medicare money over the long run. In that case, Congress could expand Medicare eligibility to patients with advanced hepatitis C (HCV)-related liver disease. It wouldn’t be the first such group eligible for Medicare — patients with end-stage renal disease are covered by Medicare due to the high costs of their dialysis treatment. If the analysis holds, such a program could actually save the government money over a 20-year horizon. Unfortunately, the CBO scores legislation on a 10-year window, which would likely show this as a cost-increasing measure, not a cost-saving one. That’s, of course, not to mention the sizable political obstacles to passing such legislation.
Of course, allowing Medicare to negotiate drug prices for all of its beneficiaries might also reduce the price for Medicare patients. That doesn’t solve the problem for private insurance, nor has that been politically viable when previously proposed.
Though it might be too late for sofosbuvir, reforms proposed by Robert Kocher and Bryan Roberts in the NEJM might help reduce the cost of future drugs. Kocher and Roberts argue that “most clinical development programs go far past the point of diminishing returns for frequent safety events, but they do not go far enough to permit detection of rare events.” Since clinical trials account for the vast majority of drug-development costs, they argue drug trials should be far smaller, replacing large trials in the final stages of development with mandatory post-approval surveillance for rare adverse effects via electronic health records — possibly envisioned as a “conditional approval” of sorts. That would certainly reduce drug costs and could be used as an argument to shorten patent periods — but there are issues, too, such as the lack of a useful control group in post-approval surveillance.
Frankly, the sofosbuvir problem defies easy solution. Despite its high price, it might be cost-effective — yet it’s almost prohibitively expensive on a large scale. It’s a shockingly clear example of how resources in American healthcare are, in fact, limited, though we often pretend they’re not. For solutions, we may have to look abroad. Other, more explicitly resource-limited countries have studied the most cost-effective ways to treat diseases such as hepatitis C. It’s possible to stratify patients and treat them in ways that maximize cost-effectiveness, though it’s unsurprising that American patients would balk at such a strategy. But at some point, something’s going to have to give. If it’s not here for sofosbuvir, it might well be in the near future when more-efficacious, way-more-expensive combination therapies are approved.
This thought from Matthew Martin is a good one to close the series on:
I believe both 1)there's huge waste in current healthcare, and 2) optimal future health spending as share of GDP will exceed current levels
— Matthew Martin (@hyperplanes) May 14, 2014
Austin has made the same point in the past. It’s quite possible that advances in treatment like sofosbuvir will contribute to larger healthcare costs in the future. By simultaneously reducing waste in what we spend right now, though, we might be able to afford treatments like sofosbuvir without increasing healthcare spending. There are tradeoffs in everything, and sofosbuvir is forcing us to confront that fact right now.