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A lot has happened in the world of Hep C treatment in the past 2 years. How will pharmaceutical companies develop sustainable pricing strategies in this fast moving sector.
Two years ago I interviewed a Toronto-based Hep C nurse about her usage of Victrelis and Incivek – then leading treatments for Hep C. We also talked about pricing and payer coverage for Hep C. This discussion contributed to my argument about why older, middle-class Canadians will be taking a more active role in paying for the cost of healthcare.
A lot has happened in the world of Hep C treatment over the last 2 years. A week or so ago I had another discussion with this same Hep C nurse. This time we talked about her recent adoption of Harvoni, the pricing and coverage of Hep C drugs more generally, and about some of her discussions with sales reps. Here are 5 things I learnt from our discussion:
#1 – Not all Hep C patients are the same
Canadian payers are naturally concerned about the budgetary implications of using Sovaldi, and now Harvoni, to all Canadians with Hep C.
Quoting this Mclean’s article from July 20141 , ex-public payer Helen Stevenson made the comment:
“a new drug for hepatitis C — called Sovaldi — which has been touted by some as a potential cure. But a full treatment costs approximately $84,000 in the U.S, and here in Canada, where the drug received regulatory approval in December 2013, treatment can cost as much as $55,000. In some cases, patients need a second course, increasing the cost to $168,000 and $110,000, respectively. And, Sovaldi is given in addition to the traditional combination of drugs for hepatitis C. The challenge is that millions of people have hepatitis C, so some view the new drug as almost a mass-market drug. ‘Giving every hepatitis C-positive Canadian that treatment [Sovaldi] would cost an estimated $14 billion’2
Yet, talking to the Hep C nurse, it is clear that not all Hep C patients are the same. For very severe patients, Sovaldi/Harvoni is going to be a clinically better and more cost-effective option than a liver transplant. Other Hep C patients are not in such a critical condition. Indeed, for around a quarter of Hep C patients the virus may actually disappear on its own without requiring any treatment.
I question whether a payer would ever realistically consider a blanket coverage of Sovaldi/Harvoni – but rather to allocate it to patients with higher needs according to certain rules.
Yet that doesn’t seem correct either – or at least not totally correct. In June 2014, Quebec did approve Sovaldi for “treatment-naïve patients living with genotype 1 or 4 hepatitis C, regardless of their disease severity”. Whilst this still is not all Hep C patients (treatment-naïve patients are perhaps 40% of all patients), it still looks to be a big commitment as long as Sovaldi is a leading therapy. It will be interesting to see the budgetary impact of this in practice.
#2 – Nurses are on the frontline with patients
In Ontario, Hep C patients get Sovaldi/Harvoni either through their private insurance plans, or they can pay for it out of their own pockets. Harvoni is not publically covered anywhere in Canada, at least not yet.
Hep C nurses are at the frontline of complying with, and interpreting, payer guidelines as to who is eligible for treatment. They can also be there to make their own clinical judgement as to the value of the new treatments on a case-by-case basis. In real-life, this means that nurses can help as trusted and knowledgeable advisers to those Hep C patients who could really benefit from these new treatments. It could be that the nurses support the application of compassionate use of the drug for Patient A, or they help negotiate a high-level of discount for cash-paying Patient B.
As further advanced therapies become available, nurses will be able to help patients make meaningful choices between competitive drug therapies. For example, in this role it could be imagined that nurses would guide patients in their choice between the efficacy/side-effect/dosing profile of Gilead’s Sovaldi or Harvoni compared to AbbVie’s Holkira Pak at different price points.
#3 – Nurses can now treat many more patients
Harvoni is transforming the work that Hep C nurses are doing in terms of patient care. Until now, nurses have been limited in the number of patients they can each treat, given the requirement to frequently monitor side effects and ensure compliance during treatment.
With Harvoni, this monitoring has been greatly reduced, lifting this potential prescribing barrier. This means that maximum usage volume for individual nurses has gone up by a factor of (perhaps) around three – a change which would be of interest to both sales reps (greater potential sales) and payers (greater potential budgetary impact).
#4 – How Sales Reps are justifying the price of Harvoni
Naturally, the issue of price gets discussed between Gilead sales reps and Hep C nurses. From my Hep C interview, it seems as though ‘the need to get ROI on an expensive R&D process’ and ‘the need to keep prices similar to the US’ are the key arguments used by the sales reps to justify the price of Harvoni.
Given the very fast changing world of Hep C treatments, the need to get ROI is a strong argument in this therapy area. Hep C nurses would likely have the experience to be receptive to this argument. The Hep C nurse respondent I spoke to was aware of the very short product life of past therapies, and that these drugs likely did not have a very long time to make their money. She was also aware that pharmaceutical companies also had to invest in compounds that failed to make it to market.
#5 – Everyone will be looking for a new gig soon enough
The nurse also commented on how temporary jobs were in this fast-moving environment. There was no loyalty to the reps; it was all about what drugs they had.
The sales reps that she used to deal with from Merck, Roche and Vertex had all moved on. She was now dealing with Gilead reps and was about to meet the AbbVie team. With Merck’s grazoprevir/elbasvir, (a new two-drug, single-pill combination) due later this year, maybe she will reconnect some of her previous sales contacts?
Semi-seriously, she also wondered about her own long-term prospects. Would there be a need for my job as a Hep C nurse once there are a wide number of interferon-free therapies available?
It will be intriguing to see how each pharmaceutical company develops sustainable pricing strategies in this fast moving world. Who will be temporary players, and who will be in it for a long profitable ride? Navigating these commercial waters is going to be interesting for sure.
In the immediate future, the list price of Holkira Pak in Canada is rumoured to cost around CAN$56,000 for a standard course of treatment compared to CAN$55,000 for Sovaldi. Let’s see how Canadian payers respond!
Article written by Peter Winters, Senior Consultant – Healthcare, Pricing Solutions Ltd. Peter is headquartered in Montreal. Pricing Solutions is an international pricing strategy consultancy dedicated to helping clients achieve world class pricing competency.
References:
1) Genna Buck, “A cure for hepatitis C,” Macleans July 28, 2014
2) Helen Stevenson, “Making a Right Turn,” January 2015
