Karen Ignagni's WSJ oped claims that spending on the new Hepatitis C (HCV) drug will hike health premiums and bring insurers to ruin.
In fact, new drugs like Sovaldi will not only rescue patients, but also reduce the cost of health care. The reason is simple. Cure are always less expensive than treating the same disease using no or halfway measures. Would Ignagni wail about a cure for Ebola that cost $1000 a pill?
Before HIV medicines came to market, there were nearly 100000 people with HIV were hospitalized. Today, about 38000 HIV patients are hospitalized each year. Hospitalization rates plummeted thanks to HIV drugs. Without HIV medicines, 111000 HIV patients would be hospitalized each year. Fewer people with HIV would be alive.
Sovaldi will produce similar savings. Millman (a health actuarial firm) estimates 984510 with HCV will be treated between 2014 and 2020. Assume everyone treated gets Sovaldi at $80000. That would cost $78 billion or more accurately about $13 billion a year for six years.
Sounds dire right? But Ignagni ignores how new HCV drugs eliminates a 48-week course of treatment for interferon (that is only effective half the time and has flu like side effects) costs about $6.12 billion year. If hospitalization rates drop by half, it will save another $1 billion per year. ($7 billion total.) Over six years insurers will save $252 billion in the process. Insurers will net savings of $174 billion.
None of this takes into account that new HCV drugs increase life expectancy and well being so that people can work, pay taxes and cover the cost of health premiums. Ignagni’s alarms about Sovaldi are intended to divert attention to these facts and to justify sticking more consumers with the cost of a treatment that saves lives and money.
In fact, new drugs like Sovaldi will not only rescue patients, but also reduce the cost of health care. The reason is simple. Cure are always less expensive than treating the same disease using no or halfway measures. Would Ignagni wail about a cure for Ebola that cost $1000 a pill?
Before HIV medicines came to market, there were nearly 100000 people with HIV were hospitalized. Today, about 38000 HIV patients are hospitalized each year. Hospitalization rates plummeted thanks to HIV drugs. Without HIV medicines, 111000 HIV patients would be hospitalized each year. Fewer people with HIV would be alive.
Sovaldi will produce similar savings. Millman (a health actuarial firm) estimates 984510 with HCV will be treated between 2014 and 2020. Assume everyone treated gets Sovaldi at $80000. That would cost $78 billion or more accurately about $13 billion a year for six years.
Sounds dire right? But Ignagni ignores how new HCV drugs eliminates a 48-week course of treatment for interferon (that is only effective half the time and has flu like side effects) costs about $6.12 billion year. If hospitalization rates drop by half, it will save another $1 billion per year. ($7 billion total.) Over six years insurers will save $252 billion in the process. Insurers will net savings of $174 billion.
None of this takes into account that new HCV drugs increase life expectancy and well being so that people can work, pay taxes and cover the cost of health premiums. Ignagni’s alarms about Sovaldi are intended to divert attention to these facts and to justify sticking more consumers with the cost of a treatment that saves lives and money.
