Executive Perspective

A $1,000-a-day cure: how do we price the value of promising new drugs?

| May 21 2014
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The recent approval of Sovaldi, a new Hepatitis C drug manufactured by Gilead Sciences, has spurred national debate about the cost of promising new drugs for those living with chronic and complex diseases.

Sovaldi could be a game changer for many of the estimated 3.2 million Americans with Hepatitis C. The drug has proven to be more effective than many existing treatments. Cure rates with Sovaldi exceed 90 percent for most people, though success and treatment duration depend on strain, or genotype, of the virus involved. Label indications include preliminary guidelines for treatment combinations based on genotype. But we still don’t really know if Sovaldi will be equally effective among people even with the same genotype. The treatment gamble comes at a high cost. The 12-week oral regimen costs $84,000, and of course that doubles for 24-week regimen. The cost of treating all known Hep C-positive Americans with Sovaldi could eclipse our nation’s entire pharmacy bill, which reached $263 billion in 2012, according to Centers for Medicare and Medicaid Services (CMS) data.

This all raises an important question: how do we balance the high cost of an effective treatment with the need to keep health care accessible and affordable for everyone?

We believe the solution lies in the clinical evidence. Evidence-based treatment guidelines help align the best treatments to the right patients. The guidelines may consider a number of factors including genetics, experience with other treatment options, symptoms, and disease progression. For example, Sovaldi is likely the right choice for people who have advanced liver disease. While the cost is high, effective treatment with Sovaldi compared to the cost of a liver transplant, which could be five times as high, may be reasonable. But only a small percentage of people with Hep C require liver transplants. Other people living with Hep C do not have an advanced disease. Some show no symptoms. Could they benefit from other proven treatments that are available today — or expected in the coming year — with significantly less costs?

Like many other areas of medicine and drug development, the clinical evidence hasn’t yet caught up to the advancement in Hep C treatment. We want to give Aetna members access to the medicines that work best for them and that’s why we cover treatment with Sovaldi today. At the same time, we are working with national physician organizations to examine new evidence and to create guidelines that will help doctors make the best treatment choices for their patients.

Sovaldi is not the first, nor will it be the last, new treatment with a hefty price tag. Yet few other drugs have the potential to inflict as large of a financial burden on the health care system and so it is important to raise questions. We continue to welcome vigorous debate about how the health care system can work together to reward clinical innovation while also pricing treatments and services based on the value they deliver to the system. We must have better solutions to balance cure and costs for all Americans.