San Francisco, Calif., February 17, 2015 – Gilead Sciences, the maker of Sovaldi® and Harvoni®, two of the highly-effective but expensive new drugs for hepatitis C infection, recently announced that in 2015 it expects to give an average discount of 46% off the original list prices of these drugs. This discount would produce an average price of approximately $40,000 for a course of treatment with Harvoni, assuming two-thirds of patients can benefit from a shorter 8-week regimen. At this price, not only does Harvoni (or comparable treatment options) represent a high value in the care of individual patients, but its likely budget impact across broader patient populations will meet the threshold at which the California Technology Assessment Forum (CTAF) would identify it as a “high value” for most health care systems.
The announcement of steep price discounts follows a brief period of intense negotiations between Gilead and insurance companies following the FDA approval of a rival drug treatment, Viekira Pak®, made by AbbVie. At its meeting on December 18, 2014, the independent review panel of CTAF [a core program of the Institute for Clinical and Economic Review (ICER)] voted that the evidence was insufficient to distinguish between the clinical effectiveness of the Gilead and AbbVie drug regimens, both of which have demonstrated hepatitis C viral clearance in over 90% of patients treated. At the time of the CTAF meeting, the AbbVie drug was not yet FDA approved and did not have a list price, but the CTAF panel voted that Harvoni, with a list price of about $95,000 for a 12-week course of treatment, represented a “low” health system value on the basis of its potential to push up state Medicaid costs by over 5% in a single year if all patients with known infections were treated.
The CTAF panel vote was informed by a drug pricing analysis performed by researchers at the University of California at San Francisco and ICER that suggested that a price range for Harvoni – or any other comparably effective drug regimen – of $34,000-$42,000 for an average course of therapy would serve as a benchmark for keeping health system cost increases below a threshold of 0.5%-1.0%. The ICER report notes that this threshold budget impact for a single new treatment is viewed by many payers as manageable without resorting to severe treatment delays or cuts in other services.
“The mission of CTAF and ICER is to help all participants in health care — and the public at large — tackle controversial questions about the appropriate use of new tests and treatments,” stated Steven D. Pearson, MD, the President of ICER. “We are gratified that our work has contributed to the national conversation about the benefits and the costs of new treatments for hepatitis C. Our analyses and the public discussion at our CTAF meetings have made it clear that the high list prices of these new hepatitis C treatments would make treating all patients unaffordable in the short term. Lower prices may therefore open up opportunities for expanding coverage to more patients. Looking forward, we remain committed to the vision that public discussion of medical evidence, including costs, can help ensure that new medical innovations bring high value for patients and the health care system.”
The California Technology Assessment Forum (CTAF) – a core program of the Institute for Clinical and Economic Review (ICER) – reviews objective evidence reports and holds public meetings to develop recommendations for how patients, clinicians, insurers, and policymakers can improve the quality and value of health care. For more information about CTAF, please visit www.ctaf.org.
The Institute for Clinical and Economic Review (ICER) is an independent non-profit health care research organization dedicated to improving the interpretation and application of evidence in the health care system. ICER directs two core programs: CTAF, and the New England Comparative Effectiveness Public Advisory Council (CEPAC). For more information about ICER, please visit ICER’s website, www.icer-review.org.