News & Current Affairs
13 January 2015
The miracle cure with a billion-dollar price tag
It's been hailed as a miracle cure for hepatitis C – but comes with a billion-dollar price tag.
The Commonwealth government is under pressure to subsidise Sovaldi, produced by drug company Gilead, that has been approved by the Therapeutic Goods Administration but has been rejected for listing on the Pharmaceutical Benefits Scheme on value-for-money grounds.
The Pharmaceutical Benefits Advisory Committee, the independent expert body that decides which drugs should be subsidised, will consider a second application to list the drug at its March meeting, along with applications to list three other new hepatitis treatments.
The committee rejected the first application to list Sovaldi at its July meeting on the grounds that it was insufficiently cost-effective compared with existing treatments, and the budget impact of listing the drug on the PBS was "high and likely underestimated".
The drug company's asking price was provided to the health department on a confidential basis. But in what may constitute the most expensive proposal for PBS listing in history, the department has revealed that the total cost of listing the drug at the price asked by Gilead exceeded $1 billion over five years.
The total cost of the PBS this financial year is expected to be $9.25 billion. The department said Sovaldi's cost per person was "significantly higher" than the cost of treatments now available under the PBS. The listed drugs Incivo and Victrelis cost the PBS $44 million in the past financial year, while combination interferon and ribavirin therapy cost about $29 million. A course of treatment using these drugs cost about $45,000, the department said.
In the United States, the cost of a 12-week course of Sovaldi is about $US84,000 ($102,000).
Helen Tyrrell, the chief executive of patient group Hepatitis Australia, which is campaigning for the listing of the new treatments, acknowledged new drugs such as Sovaldi were priced "at a very high rate" but said failure to treat the disease carried a big cost.
A Boston Consulting Group report commissioned by drug company Janssen in 2012 estimated the five-year cost to Australian governments of treating Hepatitis C at $1.5 billion.
Only about 1 per cent of the 230,000 Australians with hepatitis C receive treatment. Hepatitis C is a blood-borne virus that causes liver damage
"About three-quarters of people with hepatitis C are over 40 years of age and they're in what we call the liver danger zone, where the risk of serious liver disease is significantly increased," Ms Tyrrell said.
Sovaldi and other new treatments had a cure rate of more than 95 per cent and could be taken orally, while existing treatments had a cure rate of about 75 per cent, required injections and carried severe side-effects, Ms Tyrrell said.
"You can actually bring people back from being on the transplant waiting list, to not requiring a transplant if they're treated with these new medicines," she said.
"They really do represent a huge step forward in hepatitis C treatment, such that people are now talking about the potential to actually eliminate hepatitis C – that's how successful they are."
Mental health researcher Grenville Rose, 59, has completed two courses of treatment since he was diagnosed with hepatitis C in 1990, but neither has cleared him of the virus. During his most recent course of treatment, in 2006, drug side-effects such as exhaustion, skin rashes and flu-like aches and pains were so severe he couldn't work for more than a year.
He says the disease saps him of energy and he's excited about the possibilities the new treatments offer.
"I think this is the greatest leap forward in 25 years," he said. "I've heard a lot of people talk about having more energy when they get cleared from hep C. I'd like to see if that works for me."
A spokeswoman for the federal Health Department said the Pharmaceutical Benefits Advisory Committee was legally required to take into account the clinical effectiveness and the cost-effectiveness of any drugs it considered for listing.
The spokeswoman said by law the government could not list a medicine on the PBS unless it was recommended by the committee.
Greens senator Richard Di Natale, whose question to the department revealed the information about the cost of Sovaldi, said an assessment of cost-effectiveness was an important part of the PBS system. But he said the cost of new drugs such as Sovaldi needed to be weighed against their benefits, such as the prevention of disease transmission by reducing the number of people who carried the virus.