- The Department of Veterans Affairs on Wednesday expanded its coverage of hepatitis C treatment to all veterans, regardless of the stage of disease progression.
- Increased funding from Congress in addition to lower drug prices enabled the VA to fund care for all veterans, rather than just the sickest patients.
- With this move, the VA anticipates it will spend $1 billion on hep C drugs over the course of 2016, up from the $696 million it allocated last year.
Paying for hepatitis C drugs has eaten up an outsized share of the VA's pharmacy budget, accounting for 17% of the overall budget in FY 2015. While new antiviral drugs like Gilead's Harvoni and AbbVie's Viekira Pak are highly effective, they are also quite expensive. Harvoni costs $94,500 for 12 weeks of treatment, and Viekira checks in at about $83,000 for a similar regimen.
However, the FDA recently approved Merck's Zepatier which treats chronic hep C (genotypes 1 and 4) and is priced at a highly competitive $54,600 per treatment course. The entry of a third, cheaper alternative to Gilead's and AbbVie's treatments promises to shake-up the hep C market.
While the VA did not specifically cite Zepatier as a factor in its decision, Merck quickly trumpeted the VA's decision and indicated it priced its drug as part of a strategy to expand patient access in public plans.
"As the single largest provider of chronic hepatitis C care in the United States, our goal has been to treat every Veteran with HCV infection. We are grateful to Congress and to pharmaceutical leaders like Merck that are committed to our Veterans who have nobly served our nation," said Sloan Gibson, deputy secretary for the Department of Veterans Affairs, in a statement from the company.
Over 76,000 veterans have received treatment for hep C from the VA, and an additional 42,000 have been treated since 2014 with some of the new antiviral drugs.
However, Merck noted that only about one in five veterans with the disease have received the new anti-viral treatments."The VA is now leading the way for the U.S. in showing what is possible in the fight against chronic hepatitis C," said Kenneth Frazier, CEO of Merck.
This deal with the VA could represent some of the shifting forces in the hep C market, now that a cheaper option has been introduced. But Gilead's hep C drugs are on formulary with CVS Health and Aetna, while AbbVie has an exclusive contract with Express Scipts, leaving both in a strong position.