Dive Brief:

• In a surprising new report, hepatitis C drug prices negotiated in the U.S. by pharmacy benefit managers (PBMs) for Medicare Part D were usually lower than price-controlled European countries and Japan in 2015.
• The Pharmaceutical Care Management Association (PCMA) commissioned the IMS Institute for Healthcare Informatics report focused on pricing of two drugs, Gilead's blockbusters Sovaldi (sofosbuvir) and Harvoni (sofosbuvir/ledipasvir). Net prices in the U.S. for Sovaldi are below the European average price of $45,055; for Harvoni, it costs patients $50,400 after discounts in the U.S. compared with lower than the European average of $52,279.
• PCMA President and CEO Mark Merritt said the report reflected the success of this country’s practice of negotiated prescription drug costs.

Dive Insight:

With rising drug prices at the core of much debate and a major focus of PBMs' contract negotiations to curb costs, the report can be seen as both good news and bad news. While the U.S. costs are relatively less than other countries, the nature of the disease itself shows significant costs are ahead, according to the report, Comparison of Hepatitis C Treatment Costs.

Of seven countries analyzed, only Italy had a lower average net cost than the U.S. for a 12-week course of hepatitis C drug treatment, but the report pointed out Italy had a far lower treatment rate. Other countries studied included France, Japan, Spain, Germany and the U.K.

The comparisons show that "conventional wisdom has underestimated the ability of large, sophisticated, private-sector payers to reduce costs and improve access to high cost drugs," Merritt said in a statement, reacting to the report that he said was conducted independently by IMS Institute for Healthcare Informatics.

A proportion of infected patients treated under Part D in the U.S. was "in-line" with the average treatment rate for other countries, according to the PCMA, although the prices and access to treatments in other countries were determined through government action.

A significant factor impacting prices of the drugs is the length of the treatment, which the report said could be as short as eight weeks, or as high as 48 in some cases. Eight countries studied spent about $25.7 billion in hepatitis C treatments. In 2015, 5.8% of infected patients in the countries were treated and presumably cured.

Because it has the largest population of the countries reviewed, the U.S. also "has the highest total net expenditures of hepatitis C treatments, with half of that in the Medicare part D program," the report said.

Specifically, the net U.S. price per treatment with Harvoni - $50,400 - was below the net price in France, Japan, Spain, German, and the U.K. in 2015. The U.S. also had more discounts than other countries. Average discounts for hepatitis C medications were 15% to 20% off list prices, but in the U.S. discounts were listed at 45% to 55% for Sovaldi and Harvoni. The list price for a course of Solvaldi is about $84,000. 

Even though costs are being managed through discounts, hepatitis C is still a significant burden on the healthcare system. "Hepatitis C treatment costs are substantial and represent a dramatic shift in the allocation of healthcare resources in short period of time since the newest generation" of treatment introduced in late-2013, the report said. "With current treatment rates, even at discounted prices, significant costs (and budgetary impact) from hepatitis C treatments can be expected to continue for some time."