June 5, 2015

Looking Inside the Biotech Black Box (Part 10)


Cost-Effectiveness and Affordability of New Medicines (3)

The cost-effectiveness of treatments for chronic medical conditions is much more difficult to assess than for acute medical conditions. I am going to mention two groups of drugs, those used for modifying blood cholesterol levels and those used to treat hepatitis C.



The following quotations are from https://www.framinghamheartstudy.org/about-fhs/history.php.

  •  “The objective of the Framingham Heart Study was to identify the common factors or characteristics that contribute to CVD by following its development over a long period of time in a large group of participants who had not yet developed overt symptoms of CVD or suffered a heart attack or stroke.”
  •  “Over the years, careful monitoring of the Framingham Study population has led to the identification of the major CVD risk factors – high blood pressure, high blood cholesterol, smoking, obesity, diabetes, and physical inactivity – as well as a great deal of valuable information on the effects of related factors such as blood triglyceride and HDL cholesterol levels, age, gender, and psychosocial issues.”

There are many classes of drugs for treating high blood pressure and diabetes, several nicotine products for smoking cessation and a small number of drugs to treat severe obesity. There are no drugs to treat mild to moderate obesity or physical inactivity but, in the last 20 years, numerous drugs have been approved for modifying blood cholesterol levels.

Annual sales of the statin class of drugs (HMG-CoA reductase inhibitors) for the reduction of LDL cholesterol levels were about US$30 billion globally before generic versions of the statins became available. Pfizer’s Lipitor was the best-selling statin with peak global sales of almost US$13 billion and cumulative global sales probably close to US$150 billion by now.

Cholesterol occurs in the blood in many forms, three clinically important ones being:
BBB_Part10_I20604Reduction of blood cholesterol levels is not clinically significant unless it directly correlates with a clinical reduction in the rate and/or severity of cardiovascular disease (CVD).

  •  If a patient did not make any other changes to their lifestyle or other medical treatments, did a statin make a difference in their CVD risk over their lifetime?
    •  Have we followed enough patients long enough to determine whether a statin had a clinical benefit?
    •  Are there specific patient subsets in which a statin had a clinical benefit possibly over a much shorter period of time?
  •  Can it be stated that in patient group X that chronic statin therapy resulted in a reduction in costs associated with major adverse cardiac events (MACE) and that there was an increase in QALYs for that group?
    •  For that patient group, was the use of statins at peak brand prices cost-effective?
    •  For that patient group, is the use of statins at generic prices cost-effective?
  •  What treatment is being compared to the statins when doing the cost-effectiveness analysis?
    •  Standard medical care before the statin was prescribed
    •  Standard medical care with lifestyle changes such as decreased obesity, increased activity and smoking cessation
    •  Standard medical care with lifestyle changes such as decreased obesity, increased activity and smoking cessation, and with increased drug compliance for blood pressure and diabetes medications

I am not sure there is an answer to all or even many of these questions. It is extremely difficult for family physicians to get patients to make lifestyle changes and improve medication compliance. Combining the current low prices of generic statins with patient reluctance to make lifestyle changes, my personal conclusion is that statin therapy is probably cost-effective in some patient populations.

[Note: Consumers Union published a very informative report in 2007 titled “The Statin Drugs; Prescription and Price Trends; October 2005 to December 2006” – http://www.consumerreports.org/health/resources/pdf/best-buy-drugs/Statins-RxTrend-FINAL-Feb2007.pdf]


Hepatitis C drugs

The US$1,000 per pill cost of recently approved Hepatitis C treatments has been the subject of many headlines. In a slide presentation on its Q1 2015 financial results (http://investors.gilead.com/phoenix.zhtml?c=69964&p=irol-earnings), Gilead Sciences reported SOVALDI and HARVONI sales totaling US$4.57 billion.

Most people know very little about this virus – an excellent review on Hepatitis C infections is located on the U.S. CDC web site (http://www.cdc.gov/hepatitis/C/cFAQ.htm). The Hepatitis C virus was isolated and sequenced in 1989, after being known for many years as non-A, non-B Hepatitis. There is no vaccine for the prevention or treatment of Hepatitis C, whereas there are vaccines for Hepatitis A and B. Drug treatments for Hepatitis C have been available for many years, as outlined below (U.S. Department of Veterans Affairs; http://www.hepatitis.va.gov/provider/reviews/treatment-side-effects.asp#S1X).

“Alpha interferons, which are given as subcutaneous injections, have been used since the late 1980s in the treatment of chronic hepatitis C. Refinement of their use, pegylation to make them long-acting, and the addition of oral ribavirin to them, has brought their rate of long-term viral clearance (SVR or sustained virological response) from <5% to now approximately 50% in patients who have never before received treatment.”

Alpha interferon-based therapies had 50% SVR rates and many severe side effects, which left a substantial unmet medical need. To show the efficacy of HARVONI, a new oral 2-drug combination therapy from Gilead Sciences, I am showing a table from the Product Information brochure.


Table 11.  Study ION-2: SVR Rates for Selected Subgroups after 12 and 24 Weeks of Treatment in Subjects with Genotype 1 CHC who Failed Prior Therapy


From my perspective, there is no question that the new oral Hepatitis C treatments such as Harvoni are clinically superior (efficacy and safety) and more cost-effective than the older interferon-based therapies in achieving long-term viral clearance (a cure) in the patient populations in which they have been tested.

However, there is not a homogeneous Hepatitis C patient population. There are different virus genotypes, and patients have different levels of disease severity – the following information is from the CDC review cited above.

Of every 100 people infected with the Hepatitis C virus, about 


Cost-effectiveness is generally assessed for an average patient with a specific disease profile. Affordability looks beyond the single patient to entire disease populations, to healthcare systems and finally to regional and country economies. This will be discussed in the next blog.

[The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog. Past share price performance may not be an indicator of future share price performance. This blog does not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

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