Hepatitis C Spending Breaking the Medicare Part D Bank

A 2016 report by Health and Human Service’s Office of the Inspector General lists the hepatitis C medication, Harvoni, as the largest expense for Medicare Part D’s catastrophic coverage in 2015.

Another hepatitis C drug, Sovaldi, also made by Gilead Sciences was the third largest. Together they accounted for over $7.4 billion in spending on catastrophic coverage that year. Catastrophic drug coverage accounts for 80% of all drug spending.

California alone is set to spend over one billion on hepatitis C medications in 2017 through its managed care plans according to California Healthline. Harvoni is listed as the 16th largest drug expenditure for the state in 2015. In 2014, it was 230th.

The heavy spending is part of a campaign by the federal government to deal with a sharp increase in hepatitis C cases. That campaign includes approving new, expensive drugs, waivers for at-home hepatitis C tests, and recommendations by the CDC in 2012 that all baby boomers get tested.

Previous CDC Director Tom Frieden said the test "should be on every baby boomer’s medical checklist" to "protect the health of an entire generation of Americans and save thousands of lives."

But the effort and money aimed at the disease hasn’t shown much benefit as the mortality rate from the disease hasn’t budged, and fingerprick blood tests—like OraQuik, the recently-approved by the FDA to test for hepatitis C—have come under increased scrutiny following the collapse of the Theranos blood testing company.

Outbreak in Appalachia, Increase in Mortality in Baby Boomers

Two demographics are the source of the spike in hepatitis C infections or recognition of infections in the last eight years: Appalachia among younger drug users and older baby boomers.

An “emerging epidemic” is how a 2012 paper in the Clinical Infectious diseases journal referred to the growing number of rural Appalachians associated with intravenous heroin use being diagnosed with the hepatitis C virus (HCV).

Following a noticed increase in mortality rates, the CDC recommended the widespread testing of all baby-boomers—those born between 1945-1965—because of the high prevalence of disease in that cohort.

Combined with the convenience of at-home fingerprick tests, acute hepatitis C infections have more than doubled since 2010, which has contributed significantly to the large growth in Medicare recipients needing catastrophic drug coverage.

Questions About Clinical Utility of Treatments

New drugs to treat the disease like Sovaldi and Harvoni have been considered “breakthrough treatments” by the FDA—a designation that confers expedited review because of evidence of substantial improvement for a life-threatening disease compared to current therapies.

Clinical trials for Harvoni sometimes showed a 96%-97% sustained viral response—effectively a cure.

But despite the sometimes 90% cure rate, those suffering from the disease still have a higher mortality rate than the non-infected population—almost double the rate—according to a study in the Journal of Hematology.

The general summary was that, despite being cured of hepatitis C, patients that happened to have the disease also had histories of heavy and alcohol abuse that led to early mortality and which is often associated with contracting the disease.

If a drug cures a disease but does nothing to improve the outcome of quality of someone’s life despite being accurate and effective, it’s said to have a low clinical utility. It works, it’s just not useful.

Efficacy of Fingerprick Tests

In June of 2010, the FDA granted a waiver to OraSure for their at-home OraQuick rapid HCV antibody test, which uses a fingerprick blood test, to provide presumptive evidence of infection as there were only a few false positives compared to previous tests—less than .5%.

Receiving a waiver means it does not have to be tested on a regular basis according to CMS’s Clinical Laboratory Improvement Amendments (CLIA) standards and can be used at home.

Since then it has become a popular and convenient test with sales of about $1 million per quarter in 2013.

But efficacy of fingerprick tests has come under scrutiny since the public collapse of the blood testing company Theranos.

Theranos promoted fingerprick blood testing technology for a number of diseases—including hepatitis— that would ostensibly revolutionize blood testing for those hesitant to have full blood samples.

The technology was criticized for potentially being inaccurate, with some doctors publicly commenting that fingerprick tests don’t provide enough of a blood sample, that the samples can be contaminated with lanced capillaries and damaged tissue, and that the technology wasn’t peer-reviewed.

Theranos disagreed and stood by their technology, but eventually it was revealed that the company was secretly using standard blood testing equipment for most of their tests, which was the only way it could pass CLIA inspections.

With the fall of Theranos, other fingerprick tests have come under scrutiny to see if they, like Theranos, have been gaming their test results.

Hepatitis C is a Two-Part Test

One other source of uncertainty with the at-home hepatitis C testing regimen is that it may give the false impression of having an active disease.

While the at-home tests have been shown to be accurate, the test is only for hepatitis C antibodies. A secondary test—hepatitis C RNA test—is usually required to confirm that there is an active disease in the system that requires treatment, but there is no data to determine if at-home users are receiving the follow-up test.