Category: Cost of Healthcare

The Conundrum of Hepatitis C Part 2: To Treat, or Not to Treat?

By Michael Bertaut, Healthcare Economist

In Part 1 of this Blog on Hepatitis C, we looked at recent advancements in treatments and their costs, as well as the studies underway to determine how widespread the disease is. We learned that millions are infected, new prescription drugs are very effective and their costs sky-high.

To carry over one fact, if 3 million people are infected and they all present themselves for cure within the same 12-month period, the total amount spent on prescription drugs in the United States could double in a single year. This is unaffordable for state officials trying to run Medicaid programs, federal officials trying to manage Medicare or corporate America trying to offer health insurance to their employees at a reasonable cost.

This has led to a lot of head scratching and worried looks in policy meetings nationwide. How do we serve this population without bankrupting the system? Since the cost of the cure will affect us all eventually, let’s learn a little more about this disease.

The World Health Organization (WHO) reports Hepatitis C is a liver disease caused by a blood borne virus. It can cause liver cirrhosis or liver cancer in its worst forms. It is most often spread by sharing needles (drug injection or tattoo needles), contaminated medical equipment and improperly screened drug products. Although nobody knows for certain, it is estimated that 140 million people globally have the disease, and at least 3 million of them (potentially many more) live in the United States. Globally, Hepatitis C kills about 500,000 people annually by compromising their livers.

The current crop of anti-viral medications – essentially miracle cures for Hepatitis C – are effective in 90-95% of cases and typically require a 84-150 day course of pills (one per day). Prices for the drugs are about $1,000 per day. So, we can extrapolate the overall cost of the treatment to be $252 billion on the low end and $450 billion on the high end if all 3 million people in the United States with Hepatitis C were treated with these drugs.

But here’s the tricky part: According to WHO, 15-45% of all people infected with the disease spontaneously clear the virus on their own. The rest develop a chronic Hepatitis C viral infection that never goes away. Liver failure occurs for 15-30% of those infected within 20 years.

So we can see the full conundrum now. We have a virus with serious long-term negative effects for a significant portion of the infected population. In addition, an infected person can potentially infect others. Confusing the issue, a significant portion of those infected get well on their own within six months, with no assistance at all. And there is no way doctors can tell in advance who will shake off the disease.

We have a treatment that wipes out the virus in nearly everyone who gets it. The treatment is very expensive. We have a huge (and growing) infected population who will potentially have access to the cure if they have any sort of health insurance, but that comes with costs. We have government and insurance officials looking at this population and facing financial ruin if they treat them all.  And only one thing in this entire post is certain:

As more Hepatitis C patients seek/need treatment, we will all pay more to help them get it. Whether premiums, taxes or a deduction from your Social Security Check, we will all pay to cure these patients. And that, my friends, is the very definition of a conundrum.

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