16 May Insurers Can Pay High Cost of Hepatitis C Drugs, But Not Benefit If Patient Switches Plans
MedicalResearch.com Interview with:
Dr. Darius Lakdawalla
Darius Lakdawalla PhD
Quintiles Chair in Pharmaceutical Development and Regulatory Innovation
School of Pharmacy
Professor in the Sol Price School of Public Policy
University of Southern California
MedicalResearch.com: What is the background for this study?
Dr. Lakdawalla: New treatments for hepatitis-C are highly effective but also involve high upfront costs. Because they effectively cure the disease, all the costs of treatments are paid over a short period of time – about three months – but the benefits accrue for the rest of a patient’s life. This creates problems for the private health insurance system, where patients switch insurers. The insurer that pays the bill for the treatment might not be around to enjoy the benefits of averting liver damage, liver transplants, and other costly complications associated with hepatitis-C.
MedicalResearch.com: What are the main findings?
Dr. Lakdawalla: Treating hepatitis-C patients early with novel therapy generates
substantial benefits to society in the form of longer and healthier lives – these benefits would exceed $100 billion over the next 10 years. Private insurers would face large short-term costs from covering treatments early, but they would recover all those costs in the form of averted medical expenditures within 15 years. Unfortunately, many patients will have left their original insurer over that period, so these payers will be paying for benefits they will never see.
From the federal government’s standpoint, Medicare also stands to benefit from early treatment of hepatitis-C by private payers – Medicare could save about $5 billion within the next 10 years, if patients were treated early. Thus, if private payers fail to expand treatment, both patients and the Medicare program will lose, and society as a whole will lose out on a chance to improve health far beyond the total cost of doing so.
MedicalResearch.com: What should readers take away from your report?
Dr. Lakdawalla: A key policy challenge is to find ways to encourage private payers to take a longer-term perspective on the benefits of treatment, rather than focusing on their own short-term perspective. Private payers that make long-term investments in their patients ought to be rewarded, even if those patients end up switching to other insurers. Failure to solve this problem will result in myopic healthcare decision making that treats too few patients and foregoes a substantial amount of value for society.
MedicalResearch.com: What recommendations do you have for future research as a result of this study?
Dr. Lakdawalla: Policy researchers should focus on developing creative mechanisms to ensure that private payers can enjoy the long-term benefits of their short-term investments.
MedicalResearch.com: Is there anything else you would like to add?
Dr. Lakdawalla:
MedicalResearch.com: Thank you for your contribution to the MedicalResearch.com community.
Citation:
Costs and Spillover Effects of Private Insurers’ Coverage of Hepatitis C Treatment.
Gigi A. Moreno, PhD; Karen Mulligan, PhD; Caroline Huber, MPH; Mark T. Linthicum, MPP; David Dreyfus, DBA; Timothy Juday, PhD; Steven E. Marx, PharmD; Yuri Sanchez Gonzalez, PhD; Ron Brookmeyer, PhD; and Darius N. Lakdawalla, PhD
American Journal Managed Care
Published Online: May 03, 2016
Note: Content is Not intended as medical advice. Please consult your health care provider regarding your specific medical condition and questions.
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Last Updated on May 16, 2016 by Marie Benz MD FAAD