March 13, 2014

When are effective medications just too expensive?

doi: 10.3949/ccjm.81a.14010 Cleveland Clinic Journal of Medicine March 2014 vol. 81 3 173-175


Division of Gastroenterology, Perelman School of Medicine, University of Pennsylvania; Center for Health Care Innovation, University of Pennsylvania, Philadelphia 

ADDRESS: Shivan J. Mehta, MD, MBA, Perelman School of Medicine, University of Pennsylvania, 1133 Blockley Hall, 423 Guardian Drive, Philadelphia, PA 19104; e-mail:


Center for Health Care Innovation, University of Pennsylvania, Philadelphia; Center for Health Equity Research and Promotion, Philadelphia VA Medical Center

The era of all-oral agents for hepatitis C virus infection has begun. Previous treatments for this disease included pegylated interferon and ribavirin, which had limited effectiveness and side effects severe enough to reduce adherence and quality of life. Recent trials have documented the effectiveness of the new direct-acting antiviral agents.1 These new drugs work better and offer the promise of an all-oral treatment regimen that avoids pegylated interferon.

See related article, page 159

But they cost a lot. Prices of more than $50,000 are estimated for a 2-to-3-month course of treatment.2 These new medications reflect the kind of societal advances that justify a long-term investment in basic and clinical research. But do we value advances at any cost?


Leaving aside the question of whether these particular drugs are too expensive, the general question remains whether effective therapies can ever be so expensive that we should not use them.

Does cost matter? Well, we all know that it does. We pay attention to cost in our individual purchasing and in how we think about business and government spending. And yet, while everyone agrees that we shouldn’t pay for care that provides no benefit, many of us stop at just that line, and think or act as if we can’t put a price on those elements of health care that offer some potential to save lives. It’s a comfortable position, because in going after pure waste we feel like fiscally temperate guardians of societal resources without feeling responsible for heart-rending choices about overspending on things that do work. Yet that spending threatens societal resources just as much as useless therapies.

In the end, though, it is an illogical position. The illogic is easy to understand once you walk it through: if you are unwilling to put a price on life, then you are saying that there is no price too high for any potential health benefit, no matter how small. That means you commit all your resources to health and you go bankrupt.

So, implicitly or explicitly (our society does so implicitly—and inconsistently, at that), you have to put a maximum price on life. But at that point, you are (again, implicitly) saying that when there are treatments that cost more, you shouldn’t buy them.3 Admittedly, it doesn’t sound good, and in health care, which touches us so intimately, it doesn’t feel good either.


Many of us were taught in medical school that it isn’t the doctor’s job to think about cost. Physicians are to be clinical advocates for their patients without consideration of cost—but that can’t be right, and it isn’t right.

First, even if physicians are patient advocates first, they ought to consider cost when the patient is paying. The rise in the use of high-deductible health insurance plans has expanded the financial risk that individual patients face in their own health care decisions. Physicians may be unprepared to help patients with those decisions, but it seems like a service they ought to provide.

Second, the line between cost to the individual and cost to society is blurred at best. Our societal health care spending is nothing more than the aggregation of our individual health care spending. Even if we don’t want physicians to focus on cost when with an individual patient at the bedside or at the examination table, don’t we want societal cost to be at least in their peripheral vision?

Many obstacles impede this view. Even if physicians can keep societal costs in their peripheral vision, they certainly can’t see to the edges of the broad canvas that all of health care represents, and they have no easy decision rules for how to turn what vision they have into a decision for a particular patient.

A variety of stakeholders have succeeded in turning what might have been seen as socially responsible thinking into a dirty word. The same politicians who use the term “stewardship” when they are in favor of considering societal implications call it “rationing” when they feel the other way. As a result, some of our most important institutions—eg, Medicare—are prohibited from considering price. Commercial insurers, still smarting from the managed-care backlash of the 1990s, have limited ability to effectively manage costs while maintaining quality. In some sense, this vacuum creates an opportunity for physician leadership.


Cost-effectiveness analysis, which represents the health care value of a therapy as the ratio of its financial cost to its benefit (eg, cost per quality-adjusted life-year), offers a disciplined approach to these conflicts between individual good and social good.4

The long-term costs of hepatitis C are substantial and include multiple diagnostic tests, hospitalization, surgery, and death. A major treatment for both liver failure and hepatocellular cancer is liver transplantation, which can entail hundreds of thousands of dollars in cost for the surgery and ongoing care. Preventing just one transplant can provide enormous savings, in addition to freeing up cadaveric organs for another patient. A careful cost-effectiveness analysis could tell us whether the new direct-acting antiviral agents are worth their cost.

These analyses are appealing because they are formal and disciplined, but it turns out that they are far from value-free. Their methodology is complicated and is sensitive to subjective modeling assumptions whose implications are often not straightforward, are hard to report in the compact methods sections of manuscripts, and are harder still to interpret by most readers of these articles.

Further, these models focus exclusively on economic efficiency, so even the most carefully constructed cost-effectiveness analyses need to be tempered by a sense of social equity not captured in these models. For example, an emphasis on increasing quality-adjusted life-years will naturally lead to policy decisions that favor groups that have more life-years remaining. That may sound fine if we are comfortable with the idea that, in general, we should target our resources toward younger people rather than older people. But the same thinking means we should target our resources away from men (who don’t live as long as women) or away from members of racial minority groups (who don’t live as long as whites).

Finally, although some throw about numbers like $50,000 to $100,000 per quality-adjusted life-year as a guide, the price thresholds revealed by our current practices and policies are inconsistent. Hemodialysis is funded through Medicare by a federal mandate, but more cost-effective vaccines and preventive care are not covered to the same degree. Cost-effectiveness analyses are essential to establish a quantitative sense about the efficient use of resources, but they need to be interpreted alongside other considerations we also value. Cost-effectiveness analyses don’t take us all the way to the decision line by themselves.


The high cost of the new direct-acting antivirals for just months of therapy seems excessive on its face. Even though most patients will not pay these costs directly, they are borne by society through higher taxes or premiums for commercial insurance, which are paid out-of-pocket by those who purchase individual insurance, or substitute for wages in employment-based health insurance.

We know that the actual cost to manufacture these drugs is significantly less than the prices charged by pharmaceutical companies5 and that the government subsidizes both the research and the reimbursement for certain therapies. However, the companies need to cover the long-term costs of research and development not only for these drugs but for other drugs that did not make it through the pipeline but might have.6

There are at least two sides to this economy. First, the more we are willing to pay for successful drugs that go to market, the more the developers of those drugs will be willing to invest in finding new ones. If we were to pay less for individual successes, we would in the end have fewer trials and fewer overall successes.

Second, pharmaceutical companies hire economists to do their own cost-effectiveness calculations. One reason it should be no surprise that new drugs often arrive on the market at prices that are pretty close to commonly accepted thresholds for cost-effectiveness is that this is partly how they were priced in the first place. Pharmaceutical companies naturally want to price their products as high as they can. Since there is a limit to what people are willing to pay for the benefit they get in return, determining that limit and setting the price at that point helps firms extract as much of the surplus as possible.


A disciplined analysis of the costs and benefits of new drug therapies is critical to any medical policy decision, rather than cost alone. There will always be a point where new treatments are too expensive—a point not based on absolute cost, but on cost relative to what is gained over and above the next best alternative.7 However, we should acknowledge that these analyses are based on estimates that may change over time, that they require modeling assumptions that are often subjective and opaque, and that the interpretation and implementation of these policies within their social context is just as important as the analysis of their economic efficiency.

As challenging as these decisions are, they offer an opportunity for leadership from medicine. Some organizations have already taken a stance on eliminating waste—through their participation in the Choosing Wisely initiative led by the American Board of Internal Medicine8 or through stands against the use of drugs and procedures that offer no benefit over cheaper alternatives.9 As these decisions get harder and as we aim to reduce not just zero-value care, but also low-value care, physicians have an enormous amount to contribute.

  • Copyright© 2014 The Cleveland Clinic Foundation



Standardized evaluation consent forms for living liver donors needed


Contact: Dawn Peters

Call for liver transplant centers to incorporate an alibi in donor documents

New research reveals that 57% of liver transplant centers use living donor evaluation consent forms that include all the elements required by the Centers for Medicare and Medicaid Services (CMS) and 78% of centers addressed two-third or more of the items recommended by the Organ Procurement and Transplant Network (OPTN). The study published in Liver Transplantation, a journal of the American Association for the Study of Liver Diseases and the International Liver Transplantation Society, reviewed the living donor evaluation consent forms from 26 of the 37 transplant centers that evaluate living liver donors in the U.S.

In addition, the Yale researchers found that only 17% of transplant centers' evaluation consent forms offer an alibi to potential donors. An alibi is a statement of unsuitability for donation that a transplant center can provide to an individual who decides that he or she does not want to donate. The OPTN guidelines for living liver donors endorse the use of alibis to help ensure that individuals are free from undue pressure to donate.

The first successful U.S. living liver donor transplant was performed in 1989. Living liver donors account for 4% of the 7000 transplants occurring each year in the country. In contrast, approximately one-third of transplanted kidneys come from living donors. Prior studies suggest the relative infrequency of living liver donation is due to the complexity of the procedure and greater mortality and morbidity risk to living liver donors.

"Our study is the first to systematically examine written informed consent for living liver donor evaluation donation in the U.S.," explains lead author Dr. Carrie Thiessen from Yale School of Medicine in New Haven, Conn. "Our findings reinforce the need for standardization of living liver donor liver evaluation consent forms. We also recommend that written offers of alibis be included in consent forms to help preserve donor autonomy. Evaluation consent forms should explicitly address whether a transplant center will or will not disclose a potential donor's decision to decline donation, reason for opting out, and health details following withdrawal."

Dr. Thiessen concludes, "We hope that our study results will inform the current OPTN and UNOS efforts to revise national living liver donor policy and will aid transplant centers in improving the clarity of their living donor consent documents."

Dr. David Mulligan contributing author and Chair of the UNOS Liver & Intestine Committee agrees, "This study emphasizes the importance of building transparency in the living liver donor programs by standardizing the consent forms. The goal is to encourage more living donors to donate and that will only happen if donors fully understand the process for donating, the risks involved, and the course of recovery. Ultimately, the transplant community wants to make it as safe as possible for living donors who are providing a life-saving piece of their liver to patients with liver failure."


This study is published in Liver Transplantation. Media wishing to receive a PDF of the article may contact

Full citation: "Written Informed Consent for Living Liver Donor Evaluation: Compliance with CMS & OPTN Guidelines and Alibi Offers." Carrie Thiessen, Yunsoo A. Kim, Peter S. Yoo, Manuel Rodriguez-Davalos, David Mulligan and Sanjay Kulkarni. Liver Transplantation; (DOI: 10.1002/lt.23822) Published Online: February 24, 2014.


Author Contact: Media wishing to speak with Dr. Sanjay Kulkarni, the paper's senior author, may contact the Yale-New Haven Hospital Transplant Center at 203-785-2565

About the Journal

Liver Transplantation is published by Wiley on behalf of the American Association for the Study of Liver Diseases and the International Liver Transplantation Society. Since the first application of liver transplantation in a clinical situation was reported more than twenty years ago, there has been a great deal of growth in this field and more is anticipated. As an official publication of the AASLD and the ILTS, Liver Transplantation delivers current, peer-reviewed articles on surgical techniques, clinical investigations and drug research — the information necessary to keep abreast of this evolving specialty. For more information, please visit

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Viral Hepatitis Meeting a Must for Healthcare Providers

Fran Lowry
March 13, 2014

The growing concern about undetected hepatitis C infection, exciting developments in the management of the disease, and the realization that all healthcare providers — not just liver specialists — have a role to play in helping care for patients make the International Conference on Viral Hepatitis (ICVH) 2014 an important one for all stakeholders.

The conference will be held March 17 and 18 at the Icahn School of Medicine at Mount Sinai in New York City, and will be cohosted by the International Association of Providers of AIDS Care (IAPAC), in partnership with the International Association for the Study of the Liver (IASL).

"The conference presents an opportunity for a variety of clinicians — not just doctors, but pharmacists, nurses, and psychologists — to learn about the state of the art with respect to hepatitis B and hepatitis C, although at this point the highlights are in the hepatitis C area," Jos√© Zuniga, PhD, president of IAPAC, told Medscape Medical News.

The conference will help stakeholders gain valuable perspective on the tremendous progress that has been made in the management of hepatitis C in a variety of clinical practice settings, he said.

"Through the conference and the various means by which we disseminate the outcomes — whether it's the live webcasts, the archived webcasts, the coverage on Medscape, etcetera — our goal is to ultimately expand the universe of clinicians who are managing viral hepatitis, from screening to treatment and, in the case of hepatitis C, to cure," he said.

The recent development of new drugs has made treatment protocols for hepatitis C easier and successful, Dr. Zuniga said.

Paradigm Shift in Management of Hepatitis C

"Over the past several years, we have seen a complete paradigm shift in the clinical management of hepatitis C. That progress has continued through to looking at regimens that are interferon-sparing, meaning eliminating some of the side effects related to that specific drug," Dr. Zuniga said.

"We're also looking at more convenient dosing, which will make it as it is in the HIV world — much more possible for people to adhere to their regimens and ultimately achieve the goals of treatment, which in this instance is a cure."

Several presentations will offer information about treating hepatitis C patients in a general practice setting and stress the role of other members of the healthcare team, in addition to physicians.

“The universe of liver specialists is not capable of managing the hepatitis C epidemic in the United States, let alone globally.”

"These talks are extremely important because the universe of hepatologists and gastroenterologists — liver specialists — is not capable, from the shear perspective of volume of people, of managing the hepatitis C epidemic in the United States, let alone globally," Dr. Zuniga said.

"From our perspective as an association that represents a variety of providers, and now increasingly primary care physicians and clinicians, it's important that we provide them with the type of education that will allow them to screen, test, and treat," he explained.

"Any number of educational and structural interventions that will be discussed at the conference should make it easier to integrate larger numbers of nonliver specialists into the health workforce dealing with hepatitis," Dr. Zuniga noted.

A talk on the role of social workers in hepatitis C treatment is one that has been highlighted by conference organizers.

"To use the much-used cliché, it takes a village. We've learned this with HIV, and we're applying it to hepatitis. It's not just about the physician. In fact, at times, the physician is a barrier to the type of quality care that we want to deliver to people," Dr. Zuniga said.

"We know, for example, that if we want to improve adherence among patients on complicated regimens, or even lifetime regimens in the case of HIV, a nurse can do a far better job. Our interest as a group that represents all providers of HIV care, and by extension those who provide care to coinfected patients, is to ensure that the voices of nurses, pharmacists, psychologists, and peer educators are heard."

Baby Boomers Important Target for Screening

People born between 1945 and 1965 represent an important group for hepatitis C screening. Initiatives to increase awareness of screening in various settings, including emergency departments, will be discussed at the conference.

"Centers for Disease Control and Prevention guidelines focus screening activities on those most at risk, rather than on the general public. These guidelines have been out for a few years, and the US Preventative Services Task Force has endorsed them, which is a wonderful thing because it means that screening activities are reimbursed by insurance companies," Dr. Zuniga said.

This population is at risk because of a variety of risk-taking behaviors, such as injection drug use, that were prevalent when the baby boomers were coming of age. The lack of knowledge about hepatitis means that the bulk of these people have never been tested for hepatitis C.

The CDC has articulated deep concern about a potential wave of mortality related to liver cancers in undiagnosed baby boomers within the next 5 to 10 years.

"This is extremely frightening," Dr. Zuniga said. "Large numbers of people could be diagnosed with late-stage liver disease. That is why we are trying to educate as many clinicians as possible on the continuum of hepatitis C care.

There has been talk about the possibility of eradicating hepatitis C, at least in resource-rich settings like the United States and Western Europe. But that is not going to happen without the workforce, the infrastructure, and the financial resources to implement a robust response, Dr. Zuniga said.

"Amazing" Time in Hepatitis C

Meeting cochair Douglas Dieterich, MD, from the Icahn School of Medicine at Mount Sinai, told Medscape Medical News that this is an amazing time in hepatitis C, "both from the perspective of the CDC recommendations for screening baby boomers and the New York State law for screening baby boomers, and the confluence of new therapies that are all extremely effective, approaching 100% cure rates with virtually no side effects."

Because of these developments, there is now a growing need to equip more healthcare providers with the tools to manage patients, Dr. Dieterich explained. "We are going to need more providers who are able to treat hepatitis C and, of course, more primary care people who are willing to screen for hepatitis C and refer for treatment to gastroenterologists or liver specialists if they're not comfortable treating it themselves," he said.

Dr. Dieterich added that there will be a huge need for hepatitis C education in the primary care, infectious disease, HIV, gastrointestinal, and liver communities for the next decade or so.

Dr. Zuniga noted that the fact that the meeting is being held in partnership with the IASL is important.

"A liver association and an HIV association wanted to get together to communicate to the world that it's okay for liver specialists and nonliver specialists to work together to eradicate hepatitis," he said. "There is a gulf between the liver world and the nonliver world that we are trying to bridge. Given the magnitude of the epidemic and the health workforce restraints we have because of the numbers who can actually treat at this moment, this is a very powerful message that our associations are sending."

Dr. Zuniga and Dr. Dieterich have disclosed no relevant financial relationships.


APASL 2014: Nurses share the load to improve liver disease care


14 March 2014

Patients with cirrhosis of the liver who are at risk of developing liver cancer can be effectively monitored by experienced nurses, freeing up medical staff in busy liver clinics challenged by tight health budgets, medical workforce shortages and increasing patient demand.

Dr Wendy Cheng and nurse practitioner Saroja Nazareth initiated such a program at the Department of Gastroenterology and Hepatology at Royal Perth Hospital in 2010 and have been following patients for up to 50 months.

Presenting their experience to the 2014 meeting of the Asian Pacific Association for the Study of Liver (APASL) in Brisbane this week, they said the service was proving successful and patients were satisfied with the level of care.

“We have experienced nurses working effectively within strict clinical protocols, following up patients regularly and ensuring they have their blood tests and ultrasounds. Doctors only see the patients if there is a problem,” Dr Cheng said.

The close follow-up ensures that liver cancers are picked up early when curative treatment is possible.

Presenting a data set of 41 patients, they said 30 of these patients with cirrhosis achieved a sustained viral response after treatment for hepatitis C. Two patients who had abnormal ultrasounds requiring further investigation were subsequently found to have small liver cancers and were treated successfully.

They said support and follow-up via the nurses can be particularly important for patients enduring lengthy and difficult treatment for viral hepatitis.

A major report on the social and economic costs of liver disease in 2013 recommended more nurse-led programs to maintain the health of people at-risk of liver complications and reduce health costs.

The experiences of other initiatives including a nurse-led outreach program for the assessment and treatment of hepatitis C in NSW prisoners and a shared care program in South Australia will also be discussed at APASL 2014.

To arrange an interview or for further information please contact:

Maria Padua on 0419 200 935 or Mardi Chapman on 0466 805 735.


APASL 2014: New treatments promise a future free from hep C


12 March 2014

A new era in hepatitis C is on our doorstep with treatments boosting cure rates to over 90% and the very real prospect of eradicating the condition within the next 20 years.

The new anti-viral medications also offer a much shorter duration of treatment and fewer side effects, significantly improving the outlook for people with the disease and reducing the risk of virus transmission in the community.

Almost two-thirds of the 180 million individuals with hepatitis C live in the Asia-Pacific region, including about 300,000 Australians and 50,000 New Zealanders.

According to Professor Ed Gane, University of Auckland and Deputy Director of the New Zealand Liver Transplant Unit, identifying people with hepatitis C is now of the utmost importance along with assessing their liver disease and preparing them for antiviral treatment.

“Based on some preliminary modeling, we believe if we can increase the number of patients receiving antiviral treatment three-fold and increase the success of treatment to more than 90%, it may be possible to eradicate hepatitis C in both Australia and New Zealand within the next 20 years.”

Speaking at the 2014 meeting of the Asian Pacific Association for the Study of Liver (APASL) in Brisbane this week, Professor Gane said direct acting anti-virals such as sofosbuvir and simeprevir had improved the safety and efficacy of antiviral therapy in patients infected with the most common hepatitis C genotype 1.

By adding simprevir to the current treatment of pegylated interferon plus ribavirin and halving treatment time from 48 week to 24 weeks, cure rates have doubled from 40% to 80%.  Similarly, the addition of sofosbuvir has reduced the duration of treatment to just 12 weeks and improved cure rates to 90%.

“For the most prevalent form of the hepatitis C virus (genotype 1) in the world and the hardest to treat, this is a huge leap forward,” Professor Gane said.

Sofosbuvir and simeprevir are currently under review in Australia and New Zealand.  They received FDA approval in the US in December 2013, European Medicines Agency (EMA) approval in January 2014 and were recognised as the treatments of choice for hepatitis C in new US guidelines for the management of hepatitis C published last month [February].

Professor Gane said the next imminent advance for patients infected with HCV genotype 1 was an all-oral, interferon-free treatment regimen such as the combination of sofosbuvir and ledipasvir, which achieved 90-99% cure rates in phase 3 trials.

“The beauty of sofosbuvir-based treatments is that they are safe for everyone including those co-infected with HIV, those who have had a liver transplant and patients whose livers are deteriorating badly.”

“The new medications enable people to get better quickly and recover without the need for a transplant. So it is more important than ever for people with hepatitis C to be identified so they can benefit from the new wave of medications.”

“Australia has one of the highest diagnosis rates of hepatitis C in the world because they have been very successful in raising awareness, advocating and testing for hepatitis C.  Japan has always been a leader in surveillance and treatment and China is doing much better now. Poorer countries in Asia-Pacific though are struggling.”

He said compared to Australia’s diagnosis rate of 90%, New Zealand was lagging behind at 40%. However a government-funded, community-based pilot project to improve uptake of hepatitis C testing, assessment and treatment was currently underway.

Professor Gane said less common forms of the hepatitis C virus (genotype 2 and 3) were also responding to the new medications.

“Twelve weeks of sofosbuvir and ribavirin has a cure rate of 98% in people infected with genotype 2 and 24 weeks of sofosbuvir and ribavirin has a cure rate of 94% in those infected with genotype 3.”

“The remaining issue will be the cost of these medications. In some countries with limited resources, it may be that they are initially rationed to people with the most severe disease. However, widespread access to affordable all-oral therapy in all countries will be needed if we want to achieve global eradication of HCV,” Professor Gane added.


To arrange an interview or for further information please contact:

Maria Padua on 0419 200 935 or Mardi Chapman on 0466 805 735.