New Guidelines, High-Cost Treatments Driving Surge in HCV Testing

Laboratories can expect to see a surge in hepatitis C virus (HCV)-related testing given adoption of expanded guidelines calling for one-time screening of all baby boomers, who are now more likely to undergo screening given the availability of a new generation of effective HCV treatments. However, this surge in HCV testing is not likely to last long term after the initial wave of screening and associated treatment passes. “In light of the policy implications of greater screening coverage and the emerging therapeutic trends in the clinic, we believe clinical labs will play an increasingly important and visible role to the investment community as the hepatitis market gains steam over the next 12 to 24 months,” writes Darren Lehrich, an analyst with Deutsche Bank, in a research note from March. National estimates say that there are likely more than 3 million people chronically infected with HCV in the United States, but more than half of them are unaware that they are infected. The availability of new, high-cure-rate, direct-acting anti-viral drugs is causing great enthusiasm for screening and treatment, but their high cost is giving insurers and many providers pause, possibly dampening the enthusiasm for screening. “The cost of treating chronic HCV infection is set to increase by untold billions of dollars a year,” writes co-author Robert Steinbrook, M.D., in an editor’s note published May 5 in JAMA Internal Medicine. “At current projections, the cost of directly acting antiviral agents for HCV is likely to quickly overwhelm the budgets of any state Medicaid program or any private insurer.” In the United States, the costs of 12 weeks of therapy for drugs alone can range from $66,360 for simeprevir to $84,000 for sofosbuvir, or roughly $1,000 per tablet. Reports show that sofosbuvir (marketed as Sovaldi by Gilead) sales were $2.3 billion just in the first three months of 2014. According to Reuters, UnitedHealth Group Inc., the largest U.S. health insurer, spent more than $100 million to cover Sovaldi treatment in its initial months on the market, an amount that was “multiple” times what UnitedHealth had expected. This, experts say, is partially explained by the pent-up demand for new, effective treatments but also due to company-sponsored, direct-to-consumer advertising to encourage HCV testing in asymptomatic persons. “The most significant brake on enthusiasm for the new direct-acting antiviral drugs is their potential addition of many billions of dollars of costs to an already burdened health care system,” writes Daniel A. Ollendorf, from the Institute for Clinical and Economic Review (Boston), in another paper published May 5 in JAMA Internal Medicine. “Unless the prices of the new drugs decrease, public and private insurers face an untenable spike in short-term costs and will be forced to develop stringent patient eligibility criteria as the only way to manage the tension between access and affordability.” These efforts to increase access can be seen in a final Decision Memo for Screening for Hepatitis C Virus published by the Centers for Medicare and Medicaid Services (CMS) June 2. CMS will cover a screening test for adults at high risk for hepatitis C virus infection, defined as a current or past history of illicit injection drug use, having received a blood transfusion prior to 1992, and all other adults born from 1945 through 1965. “We believe the CMS action could further accelerate the HCV testing market beyond what was originally set forth by U.S. Centers for Disease Control and Prevention and the U.S. Prevent[ive] Services Task Force,” writes Lehrich. “Our model sizes the HCV testing market at ~$300 million per annum for the foreseeable future, and assumes the following: (1) ~10 percent of the 80M baby-boomer cohort gets tested each year; (2) ~3 percent of the screened population cohort tests positive for HCV (2012 CDC report cites 3.25% prevalence in baby-boomer cohort) with a one-time test (86803—Clinical Laboratory Fee Schedule [CLFS]~$19/test); (3) patients placed on therapy receive a one-time genotype test (87902—2014 CLFS ~$351/test) and then once on therapy are tested four times with follow-up RNA quantitative tests (87522—2014 CFLS ~$58/test) as well as a battery of routine tests per guidelines (80053/84443/G0306—2014 CLFS ~$48 total for tests).” Lehrich adds that the reimbursement rates in his model are assumed to be 15 percent below current CLFS rates, reflecting a mix of discounted patients and potential for future CLFS reductions. “We will start to see primary care physicians screen the birth cohort in agreement with guidelines when they feel they can improve quality of patient care,” Nancy Reau, M.D., a member of the American Liver Foundation Medical Advisory Board, tells DTET. “With the simplicity of the newer therapies, I strongly think we will see primary care doctors screening and treating their own patients. Like, with H. pylori, they will just send nonresponders [to specialists].” Reau says it is important that laboratories are prepared for this influx of testing by getting rid of archaic options and focusing on sensitive assays with low thresholds for detection for monitoring. Takeaway: Laboratories can expect to see a surge in HCV-related screening and testing in light of recent expanded guidelines and greater availability of new, effective treatments. This wave will be passing as higher cure rates are achieved and unknowingly infected baby boomers receive one-time screenings.