Australia negotiates volume-based pricing
The Australian government announced in December 2015 that treatment will be available for everyone with hepatitis C in Australia, where an estimated 230,000 people have HCV. Of these 75% have already been diagnosed.
“This was a hard fought battle – we were told we had 'rocks in our heads' if we thought these drugs could be made available without restriction,” Helen Tyrrell of Hepatitis Australia told a symposium on treatment access in high-income countries at the International Liver Congress in Barcelona in April.
“The narrative was all about price. We aimed to change the discussion to talk about the value of the medicines and the opportunity they presented. We showed that a high proportion of people were in the age group where the rate of progression of liver disease increased. We wanted them to think about elimination, about paying for a cure not tablets, and to think about volume.”
The Australian government has negotiated a unique volume-based price agreement with pharmaceutical companies to treat 62,000 people at a cost of AUS$1 billion over five years – an average price per treatment of AUS$16,129 (US$11,715 / £8234) if all 62,000 people are treated. This deal creates an incentive for Australia to diagnose and treat as many people as possible.
Although the details of the agreement have not been made public, there has been speculation that the deal includes a risk-sharing arrangement. If expenditure exceeds a certain level in any year, the cost of any extra treatment courses is believed to fall in a stepwise fashion until drugs are being supplied at virtually no profit to the manufacturer – or free of charge, those with insight into the process have told aidsmap.com.
One Australian hepatitis expert told aidsmap.com it is possible that 30,000 people will start hepatitis C treatment in 2016 alone, potentially driving the cost per treatment below AUS$10,000.
Hepatitis C Trust considers judicial review to challenge treatment cap in England
In Europe access to hepatitis C treatment in almost all countries is rationed on the basis of liver disease stage, and as Professor Antonio Craxi of the University of Palermo pointed out at the International Liver Congress, one of Europe’s wealthiest countries – the United Kingdom – has taken one of the most extreme positions on rationing, restricting access to 20,000 people in England over the next two years, at an average cost of around £20,000 per treatment. In comparison Italy treated 42,000 people from December 2014 to April 2016, but still needs to treat three times as many people to cure those in greatest need of treatment, Professor Craxi said.
In the United Kingdom the Hepatitis C Trust is threatening to ask the High Court to rule on whether the Department of Health has acted lawfully in restricting access to hepatitis C drugs that have already been approved by the National Institute for Health and Care Excellence (NICE) – a judicial review. Medicines approved by the NICE technology appraisal procedure should be provided by the National Health Service in England and Wales (Scotland runs its own health system and has already committed to providing hepatitis C drugs). NICE made a series of recommendations by drug, genotype and liver disease stage, including a recommendation that ledipasvir/sofosbuvir (Harvoni) should be made available to all previously untreated people with genotype 1 infection.
NHS England says that the limit on numbers treated is not just driven by cost, but also reflects the logistic problems in delivering treatment to a large number of people through specialist centres. The Australian government refused to let concerns about capacity stand in the way of treating as many people as quickly as possible; all general practitioners are able to prescribe direct-acting antiviral treatment in Australia in consultation with a liver specialist, in order to ensure equity of access.
Australia treats as many people in 1 month as England is permitted to treat in 3 months
Figures provided by NHS England show that the entire system of 22 'operational delivery networks' in England will be permitted to treat fewer people in a three-month period than Australian GPs started on treatment in two weeks in March 2016. In March 2016, at least 1811 people began treatment for hepatitis C in Australia, compared to 2790 in the whole of 2014, according to figures released by the Kirby Institute. NHS England plans to provide treatment for 2000 people with hepatitis C from April to June 2016, with slight increases in subsequent quarters. Approximately 160,000 people in England are estimated to have hepatitis C.
In comparison the Scottish government plans to treat 1500 people each year up to 2020, out of an estimated infected population of 37,000.
NHS England says that the majority of 5000 people with hepatitis C and cirrhosis have now been cured, and that NICE recognised in its guidance that treatment for all would take several years. However, as Professor Antonio Craxi observed at the International Liver Congress, the progression of fibrosis is unpredictable. Clinicians are being forced to make individual decisions about which people to treat first, leading to disappointment and frustration for many.
“People have been waiting years for these drugs because they felt what was on offer before was too toxic,” said Samantha May, the Hepatitis C Trust’s Support Services Manager, in a press statement on the decision to seek judicial review. “Now suddenly to be told they may have to wait months, even years more is really distressing. Our helpline is overwhelmed with people who cannot understand why NICE says they can be treated now but their hospitals are sending them away and telling them they’ll get a letter at some point in the future.”
The list price of the 8-week course of treatment with Harvoni approved by NICE for people with genotype 1 is £25,986.66, almost three times higher than the potential volume-based treatment price negotiated in Australia, a country with almost 30% higher GDP per capita than the United Kingdom. (Drug prices are negotiated country-by-country with reference to GDP per capita.)
What discounts NHS England may have negotiated on listed drug prices have not been made public, but the £200 million annual envelope for hepatitis C treatment funding implies that if treatment is rationed to 10,000 people each year, the average price of treatment in England is around £20,000 per treatment course.
Lack of ambition limits access
Lack of ambition in tackling hepatitis C translates directly into higher drug costs, the contrasting Australian and British experiences suggest. Whereas the Australian government is committed to elimination of hepatitis C as a public health problem, the United Kingdom approach is restricted to limiting future medical costs, with little potential impact on future transmission. Modelling by Public Health England and academic groups suggests that targeting treatment to 3,500 people with cirrhosis a year will be sufficient to almost halve the incidence of end-stage liver disease and liver cancer by 2020, but to reduce HCV incidence it will be necessary to treat people who inject drugs with mild fibrosis, as well as people with cirrhosis.
What might be achieved in the United Kingdom – both England and Scotland – by a more ambitious approach to hepatitis C elimination and volume-based pricing agreements – is uncertain, but Australia's example shows that setting an ambitious target and using government's monopoly power as the only buyer of medicines can have dramatic effects on access to treatment.