What will insurance companies do, when the first new cocktail drug arrives?

Just giving some thought to the potential impact of a newly approved drug. Lets make some assumptions, and discuss/speculate. The assumptions being:

1. A new drug, say a PI, is approved tomorrow.
2. The PI is approved as an add-on to existing treatment (Riba and interferon), and is aimed at Geno 1’s.
3. The PI increases the rate of SVR from about 50% on SOC, to 75% combined with the PI
4. The PI costs as much, or more, than Peg interferon, so the price of treatment is at least doubled
5. There are mild additional side effects from the PI, full side effects, like any new treatment, won’t be known for a while
7. The optimum treatment protocol won’t be known for a while (like any new drug).

What do you think drug companies or governments will do with respect to funding requests?

1. Automatically fund the drug for anyone whose doctor asks for it?
2. Approve it for any patient who has not achieved RVR in 4 weeks (i.e. start again a month later, with the new PI)?
3. Approve it for patients who have failed to achieve a 2 log drop by 12 weeks?
4. Approve it for patients who have previously relapsed after 48 weeks of treatment?
5.             Approve it for crtically ill patients with sever liver diesease?
6. Don’t approve it?

I am guessing it is going to be 2 or 3, possibly even 4 or 5, for quite some time, probably at least until competing PI’s are approved and drive the price down. The reason being, unlike when Ribavirin came along (with next to know cost, as it was a generic), many patients have already cleared on SOC, so why automatically fund something when a cheaper alternative may work for that patient with less side effects?

[moahunter]

One more assumption (a biggie I guess):

8. Trials only demonstrated an improvement of SVR rates for Geno 1's, if treatment was for 48 weeks.

[dointime]

I think this is a very good question.  I live in the UK with socialised healthcare and they are pennypinching with every little thing.  It is quite feasible that they would work out some way of limiting the use of the new drugs while trumpeting 'free healthcare for all at the point of use'.  I think they'll finesse things so that enough of us die off before they have to fork out to treat the ones that are left.  

What will the new drugs cost though?  That's the question.  It's a big assumption to say that they'll cost as much as peg don't you think?

dointime  

[moahunter]

I think the cost will be very high to be honest, because the trials are taking so long. The only thing I can think of that may limit the cost, is competition. If the first PI winner goes in too high, will that backlash against them when the next PI comes along?

I'm not too sure on the answer. But I think the Pharma companies are getting more savy, and they recognize that consumers are more capable of shopping around accross borders, so that this time, the price that is set in US may not be too different from the price elsewhere. US is the big money market, so I suspect big pharma would sooner not sell to the UK government, or another government, than see that sale damage the price they can obtain from the insurance route in the US.

[moahunter]

It seems to me, that insurance companies in the US are going to be the key players in this one. They have to be, otherwise, pharma can just set whatever price they want - and that's not the way it's going to work.

[desrt]

Assumption #4 doesn't track. It's hard to figure any PI being as expensive to produce as IFN. India is producing the AIDS meds for pennies and the real cost of VX950 and SCH50304 will probably be on the same order. Doubtless Schering and Roche will inflate the price  for the first few years to recoup the millions that have been extorted from them by the 'patent holders' of the HCV virus (i.e. the company that bought the company that bought the company that bought Chiron) - but hey, that's venture capitalism. In this case the fault doesn't lie with big pharm but with international patent law and our own CDC that gave those patent rights away in exchange for the promise of a vaccine that never happened.

"What will insurance companies do when the first new cocktail drug arrives?"
Give us all a swizzle stick. It's more profitable than developing IFNs that work for everyone.

[moahunter]

Agreed - on assumption 4, I should have written - "will have a price for patients/insurance as high as interferon". The cost to manufacture has very little to do with price, price is more of a function of supply, demand, and earning a sufficient return on investment for the trial costs, and the massive risk of failure in pharma (most drugs never make it). I'm also expecting swizzle sticks for quite some time, I think there is some false hope from many that even if these drugs are approved, they will instantly have access to them.

[moahunter]

Oh - may have read that wrong - as in, you are suggesting insurance will encourage us to mix with such a stick? Not sure they will want to pay for the new parts for the mixture though - at least at first. But agreed - for the industry, as evidenced by stock prices, PI's seem to be where the money is. I'd like to see better interferon, and ultimately, a vaccine, but who knows...