New All Oral Therapy for Chronic Hepatitis C Virus (HCV): A Cost-Benefit Analysis

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2 Disclaimer This tool is not intended to predict any actual cost savings but rather is only intended to provide a possible estimate of cost savings based on certain assumptions made by Walgreens as well as criteria that are self-reported by the user of this tool. Walgreens makes no recommendation or endorsement of any drug or treatment regimen, and makes no representations or warranties as to the accuracy or completeness of the information contained in this tool and disclaims any liability resulting from the use of or reliance upon the information or any errors or omissions contained herein. The anticipated genotype 1 all oral therapy referenced herein is a fixed-dose combination consisting of the drugs sofosbuvir and ledipasvir. Please note that ledipasvir has not yet been approved by the U.S. Food and Drug Administration (FDA), and the fixed-dose combination has been submitted to the FDA for approval and is currently under review. Information regarding approved drugs is available at: Walgreen Co. All rights reserved. 2

4 Background Hepatitis C cost explosion Baby boomers (48-68 years old in 2013) 1 USPSTF recommendations 1 Patient warehousing 2 This is justifiably a concern to payers However, we have developed a model to estimate the overall costs when factors such as medical costs are incorporated in to the cost equation 2014 Walgreen Co. All rights reserved. 4

5 Project Objectives The models allow payers to estimate: Burden of chronic HCV in their population Compare potential costs for treating chronic HCV according to:» standard of care (up to November 2013)» all oral therapy (new/future)» natural course of disease (no treatment) 2014 Walgreen Co. All rights reserved. 5

6 Overview of interactive models Model assumptions were based on: Peer-reviewed literature Industry benchmarks Wholesale acquisition costs (WAC) Actuarial judgment 2014 Walgreen Co. All rights reserved. 6

9 Overview of interactive models: Model 2 Model 2: Estimates the current number of chronic HCV positive in target population that are not cured and are expected to receive treatment in the next 14 years 3 Not diagnosed Diagnosed but not treated Diagnosed, treated, and not cured 2014 Walgreen Co. All rights reserved. 9

11 Overview of interactive models: Model 3 Model 3: Contrasts the pharmacy, medical, and overall costs according to three different therapeutic scenarios: Standard of care therapy (up to November 2013) All oral therapy Natural course of disease 2014 Walgreen Co. All rights reserved. 11

14 Model 3: Medical cost assumptions Medical costs over 14 years Cured Not cured, no cirrhosis Not cured, cirrhosis, no end stage liver disease Not cured, cirrhosis, end stage liver disease 2014 Walgreen Co. All rights reserved. 14

18 Limitations The pharmacy cost for genotype 1 all oral therapy is an estimate since many proposed all oral regimens are not yet FDA approved. 4 The model also assumes all-oral efficacy rates equal to those reported in phase III trials of a fixed-dose combination of the investigational sofosbuvir/ledipasvir combination. 5 The medical and pharmacy costs do not take into account liver transplantation, treatment for side effects, or treatment for hepatocellular carcinoma. The costs modeled are representative of what may be incurred over the long-term. Thus, results may not be applicable to costs or savings incurred over the short-term Walgreen Co. All rights reserved. 18

19 Limitations (continued) The prevalence of HCV that has already been diagnosed in the target population is based on a managed care population 6 and may not be generalizable to the general population in the United States. The treatment costs calculated for standard of care (up to November 2013) and all oral therapy only take into account one course of treatment. All in the uncured population are tested and treated in the first year. This may underestimate the pharmacy costs as they are not inflation adjusted since they all happen within the current year Walgreen Co. All rights reserved. 19

20 Limitations (continued) The models only apply to adults with HCV. The proportion of the uncured population that undergoes treatment and progresses to end stage liver disease may be underestimated as the proportion developing cirrhosis does not account for the likelihood of those with more advanced disease failing treatment. The proportion of the uncured population that is cured within each of the therapeutic scenarios may be over-estimated as the impact of prior failed treatment is not taken into account Walgreen Co. All rights reserved. 20

21 Conclusions This model allows payers to estimate the burden of chronic HCV in their population. The model is intended to be transparent and allow payers to insert their organization s costs and demographic and medical variables as individualized to their beneficiaries and program. It can be updated to incorporate new drugs and new costs as this information becomes available Walgreen Co. All rights reserved. 21

23 References 1. Screening for Hepatitis C Virus Infection in Adults: U.S. Preventive Services Task Force Recommendation Statement. (2013). Ann Intern Med. doi: / Bio Trends Research Group. (2013). The Majority of Physicians that Treat Hepatitis C Virus (HCV) Have Begun Warehousing and Preparing Their HCV Patients for the Next Generation of HCV Treatments. Retrieved September 24, 2013, from Virus Dolan B., A. R. (2007). Prognosis in decompensated chronic liver failure. Fast Facts and Concepts. Retrieved 9/25/2013, from Walgreen Co. All rights reserved. 23

24 References (continued) 4. Tucker, M. E. (2013). FDA Approves 'Game Changer' Hepatitis C Drug Sofosbuvir. Retrieved March 6, 2014, from 5. Gilead Sciences Inc. (2013). Gilead Announces SVR12 Rates From Three Phase 3 Studies Evaluating a Once-Daily Fixed-Dose Combination of Sofosbuvir and Ledipasvir for Genotype 1 Hepatitis C Patients, from studies-evaluating-a-oncedaily-fixeddose-combination-of-sofosbuvir-and-ledipasvir-for-genotype-1- hepatitis-c-patients 6. Spradling, P. R., Rupp, L., Moorman, A. C., Lu, M., Teshale, E. H., Gordon, S. C.,... Holmberg, S. D. (2012). Hepatitis B and C virus infection among 1.2 million persons with access to care: factors associated with testing and infection prevalence. [Research Support, Non-U.S. Gov't Research Support, U.S. Gov't, P.H.S.]. Clin Infect Dis, 55(8), doi: /cid/cis Walgreen Co. All rights reserved. 24

25 Appendix: Strengths Model is customizable: Population Demographics Pharmacy cost assumptions Models take into account not only pharmacy costs for treatment, but medical costs by cured status Model assumptions are evidence-based 2014 Walgreen Co. All rights reserved. 25