Medical Innovation and the Business of Cures

Pharmaceutical innovation sets the U.S. apart from the world in healthcare. When people say, “The United States has the best healthcare in the world,” they are talking about the American propensity for pharmaceutical innovation. New medicines have helped increase childhood cancer survival rates from 58 percent in 1970, to 83 percent in 2016. They have also contributed to the decline of death rates for HIV/AIDS patients, heart disease patients, and cancer patients. While some newly patented prescription drugs are often more costly, medical innovation helps patients live longer, be healthier, and lead more productive lives.

This is particularly true in the case of the prescription drug ‘cure’ for Hepatitis C in the development of the Sovaldi, Viekira Pak and Harvoni drug therapies. A course of these drugs is 95 percent effective in eradicating Hepatitis C in an individual, however range in costs of $83,000 to $95,000 per treatment. By bringing cures that will eradicate diseases such as Hepatitis C to market, people are healthier, which leads to fewer doctor visits, reduces costly hospital stays, and helps patients avoid expensive surgeries such as liver transplants.

Unfortunately, beneficiaries of public assistance programs such as Medicaid and other institutional care populations have a slightly higher chance of acquiring Hepatitis C. Prisoners have an acquisition rate 30 times higher than the general population. Because Sovaldi, Viekira Pak and Harvoni are so costly, state run programs have cut down on issuing the drugs other than to those in advanced stages, resulting in people developing other diseases of the liver that potentially cause greater health problems and much greater cost of care.

The U.S. Centers for Disease Control and Prevention (CDC) reports 60 to 70 percent of those diagnosed with Hepatitis C will develop chronic liver disease, five to 20 percent will develop cirrhosis, and one to five percent will die of liver failure or cancer. Those affected might even need a liver transplant to help them get back their health.

At least 34 states have restricted treatment to patients who have reached an advanced stage of liver disease, and 29 states would only consider approval if the prescriber was a specialist in gastroenterology, hepatology, infectious diseases or liver transplantation. Matt Salo, Executive Director of the National Association of State Medicaid Directors has said making the drugs available to all those infected with hepatitis C “…would blow up state budgets. We would be spending more on this one drug than all other drugs combined,” Salo said. “There isn’t the capacity to do that.” For example, a Medical Director of Oregon’s state prison system estimated it would cost more than $200 million to treat prisoners with Hepatitis C, an amount is four times greater than the system’s entire annual health care budget.

There must be room for compromise on this issue. In the past eight months, a deadly epidemic occurred in Massachusetts, Minnesota and Pennsylvania, which could have been avoided. State budget officials should audit their spending on emergency room visits, hospital admission and readmission rates and surgery for individuals diagnosed with Hepatitis C in state-run programs, then consider the cost of prescribing a course of these life-saving treatments.

There also seems to be an opportunity to develop medically reasonable recommendations around prescribing practices for new, life-saving drugs for state-run programs, in collaboration with pharmaceutical drug developers so there is a tiered system of payment for and access to new medicines.

In order to continue the track the U.S. is on with medical innovation, there is much need for a robust dialog on this issue. While many drug innovations are complex, time-consuming, and expensive to develop, statistics show that states benefit by saving money in different areas of surgery and emergency room visits in their healthcare budget over time. Not only do patients benefit from new drug innovation, but also the economy benefits from a healthier workforce. And above all, most certainly, hope is restored in patients when new drug development occurs. We must have legislators and the private sector develop solutions together, not restrict access and/or set price controls that will jeopardize long term development to treat chronic and other serious disease that plague our families and communities.

In Depth: Health

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