On World Hepatitis Day, Looking at Innovation That Goes Beyond a Pill

By Michael Ciarametaro, Vice President of Research, National Pharmaceutical Council

One decade ago, we celebrated a breakthrough: the first of a new kind of hepatitis C drug had been approved. The new regimen was given over 48 months, cured nearly 80% of patients and cost around $50,000. 

But science – and economics – is an extraordinary thing, and that decade-old milestone, a revolution at the time, now feels like ancient history. Today, we have a stable of even better medicines. More than 95% of patients are cured, and now they are cured with more easily tolerated treatments in a quarter of the time and for a quarter of the price. 

Today, as we recognize World Hepatitis Day, we have even more to celebrate in this area. Hepatitis treatment is an example of the pharmaceutical industry working as it should—delivering more competition, more cures and lower prices. 

That doesn’t mean that the miracle we’re experiencing today came without controversy. The new crop of hepatitis C drugs with their initial price tags and stunning efficacy – combined with the prevalence of the disease – generated new challenges for the health care system. Even though the treatment was unquestionably of high value, the sudden crush of long-untreated patients raised new questions. 

One question involved the short-term financial impact of a revolutionary treatment. State governments were worried that they would be incentivized to limit treatment to avoid busting limited budgets. 

The rise of these medicines also raised questions about how society finances cures. The insurer that pays for a course of hepatitis C treatment incurs an immediate cost, but the value of that cure – the foregone liver transplant, for instance – might not accrue until later, when the patient may be on another insurance plan. 

The challenges had nothing to do with whether the medicines were “worth it” and everything to do with how our sometimes-chaotic health care system paid for them. It was clear that the scientific revolution of hepatitis C would have to beget a corresponding reimbursement revolution. 

And it did. Hepatitis C became a fertile ground for large-scale experiments that have offered new ways of thinking about how we pay for medicine. Encouraging the use of such approaches – from alternative financing models to new risk-sharing models to a more thoughtful regulatory environment – has long been a priority of the National Pharmaceutical Council. 

Breaking from old models can be difficult, but the hepatitis C examples showed that it can be done. States, in particular, wanted freedom to contract with pharmaceutical companies in novel ways that required a rethinking of rules around rebates, and the Centers for Medicare & Medicaid Services found a way to enable that. 

Indeed, a shift to new and different kinds of contracting, including ways of sharing risk, alternative financing approaches and more thoughtful pricing regulations, will be key in ensuring access not just to hepatitis C medicines, but also a whole host of new powerful therapeutic approaches. 

Other issues remain sticky. The coming wave of one-time transformational treatments such as gene therapies will again force conversations about the gap between who pays today and who benefits years down the road. It will underscore the importance of innovative contracting approaches that take us away from increasingly antiquated, volume-based reimbursement paradigms, along with the policy changes needed to make that a reality.

But the great lesson of hepatitis C is that it’s possible to begin to reshape the system in a way that works better for everyone. Approaches such as the Netflix model prove that stakeholders – working together – can come up with novel approaches that change public health. When we think of hepatitis C and innovation, our first thought is often of the advances in virology that the study of the disease has delivered. But the breakthroughs in how we finance cures may leave every bit as much of a legacy.