Paying for High-Priced Drugs: Comparing Global Strategies from U.S., UK, and Scotland

It's been all over the news lately: Sovaldi, with its cure rate of over 90% and its price tag of over $1,000 per pill, remains the subject of much discussion and debate. Because of this, Sovaldi provides an excellent and timely case study of how different countries try to manage the cost of high-cost drugs. For Sovaldi or any high-priced drug, one way for countries to keep costs down is to limit the population of patients eligible for treatment. There are significant differences in the way these population restrictions are being handled in the United States and around the world. We thought it might be interesting to use Sovaldi as a case study to see how the U.S., UK, and Scotland differ in their approaches.

U.S. Approach to Restrictions

A significant part of the burden for supplying Sovaldi in the United States falls to public programs such as Medicare, Medicaid, and the Department of Veterans Affairs (VA). However, there are serious concerns about the ability of these programs to pay for Sovaldi, even at discounted prices negotiated with Gilead. One strategy these agencies are using to control the overall budget impact is to limit the population of patients eligible to receive the drug. In a number of states, only patients with advanced liver disease are eligible for Sovaldi under Medicaid. In Illinois, patients must meet and maintain 25 criteria to be eligible for treatment. Evidence of drug use in the last 12 months and failure to be deemed “mentally competent” can disqualify patients from treatment and losing or misplacing even a single pill results in discontinuation of treatment.

European Approach to Restrictions

The United States is not the only country in which restrictions are placed on the patient populations that are eligible for treatment. A number of countries, including England, Scotland, Germany, France, and Canada, have Health Technology Assessment (HTA) agencies that review clinical evidence on new drugs and issue recommendations about the overall efficacy/effectiveness of each drug. Some, such as the Scottish Medicines Consortium (SMC) and the National Institute for Health and Care Excellence (NICE) in the UK, also consider economic evidence and perform cost-effectiveness reviews.

The SMC advised listing Sovaldi for patients with any genotype of Hepatitis C virus (HCV), regardless of liver disease severity. They advised restricting use of Sovaldi in treatment-naïve patients with genotype 2 HCV to those who are ineligible for or intolerant of peginterferon alpha.

Though NICE has not yet completed their final evaluation, a draft guidance from August 15 recommended Sovaldi for those with HCV genotypes 1, 2, and 3, but not for 4, 5, or 6. NICE indicated that their decision was linked to major uncertainties about the cost effectiveness of treating those with genotypes 4, 5, and 6, even though Sovaldi was found to be effective/efficacious in those populations.

Cost vs. Benefit: A Difference in Perspective

NHS England voiced concerns to NICE that the drug “may prove to be ‘unaffordable’” and indicated a desire to work with NICE to ensure that “only those patients who will get significant benefit from the addition of sofosbuvir will be offered treatment.” This reveals a major difference in perspective between NHS England and public programs in the United States. Both recognize that immediately providing the drug to every single person with Hepatitis C isn’t feasible. In the UK, the restrictions are imposed to ensure that those who will benefit the most are able to access the drug. Many of the public programs in the United States, on the other hand, choose to supply Sovaldi only to those in the most desperate of situations after everything else has failed.

The Medicaid approach may seem reasonable from a cost-cutting perspective, but it may also mean that people receive numerous redundant treatments. Peginterferon-based treatments for Hepatitis C cost nearly as much as Sovaldi and have a considerably lower success rate, so in many cases, public drug programs may end up paying twice for the same outcome, not to mention additional costs associated with suffering from a chronic disease for a longer period of time. Restricting treatment only to those who are sick enough results in more sick people relying on Medicaid for a longer period of time.

The NHS, on the other hand, advocates treating those for whom the drug will be the most effective. NICE’s evaluation intends to show where NHS funds will have the greatest and most positive effect. Restrictions are imposed where there is uncertainty about the overall cost-effectiveness of treatment, not on everyone who isn’t yet sick enough.

No one is claiming that the approach of NICE and other HTA agencies is absolutely perfect or that the United States public health programs are entirely wrong. It is important to remember that the above concerns apply only to a subset of those health plans. However, there are clear benefits to limiting access to Sovaldi based on whom it will help the most. Withholding treatment from those not yet sick enough results in more sick people staying sick—and using public health program funds—longer.