At The Crossroads, Part 5: The Uncomfortable Math Of Hep C Treatment

Nov 26, 2014

What’s the price of a human life? Many of us would say each life is priceless. But health economists sometimes have a number in mind.

Want to know what that number is?

In this part of our series “At the Crossroads: The Rise of Hepatitis C and The Fight To Stop It,” we'll tell you that - and more. We go beyond the high price of new hepatitis C drugs  to ask: how much is too much? And what the heck is a "quality adjusted life year" anyway?

How to figure out cost effectiveness from Kristin Gourlay on Vimeo.

Morning producer John Bender pitches in to help answer those questions, and work through a little math problem.

KRISTIN:
If I had a debilitating illness like hepatitis C, I would want the new drugs, no matter the price. That’s because hep C could destroy my liver – before I even knew I had it. I could end up with cirrhosis or liver cancer.

JOHN:
Whoa. That’s pretty scary.

KRISTIN:
Indeed. Hey John, introduce yourself.

JOHN:
I’m John Bender, morning producer here at Rhode Island Public Radio.

KRISTIN:
So John, you’re going to help me work through some math here. Thank you.

JOHN:
Sure thing. So what’s the problem?

KRISTIN:
Well, the problem is we have millions of Americans living with hepatitis C. The good news is we can cure them. But for a hefty price. 

There are a couple of new drugs for hepatitis C from a company called Gilead. One of them is called Harvoni. It’s the first all in one pill for Hep C. And it’s a big improvement over the old treatment, which didn’t work for a lot of people and caused some nasty side effects. But here’s the rub: for a full 12-week course, Harvoni costs about $94,000 dollars.

JOHN:
Wait, did you say $94,000? You could buy a house for that.

KRISTIN
Well, in some markets! But yes, it's $94,000. And it’s only a bit more expensive than one of Gilead’s other new hepatitis C drugs, Sovaldi. That one’s about $84,000 for a 12-week course.

JOHN:
Jeez.

KRISTIN:
Yeah, a lot of people have reacted that way.

JOHN:
Well, of course. For that kind of money they better work.

KRISTIN:
Early reports show they do. Most doctors I talk to about these new drugs don’t call them a treatment; they call them a cure. There are a few different varieties of hepatitis C, and for some of those the cure rates are over 90 percent. The old treatment didn’t even come close to that. It’s still early days for these new drugs, but it looks like most people can tolerate them.

JOHN:
So what’s the problem? This sounds great! People have health insurance. Everyone with hepatitis C should get the new drugs. Why can’t we just cure everyone right now?

KRISTIN:
We can’t afford it. But don’t take it from me.

Dr. John Wong:
“My name is John Wong. I’m a primary care physician here at Tufts Medical Center.”

JOHN:
Wait, why are we hearing from him?

KRISTIN:
Wait – he’s not done yet.

Dr. John Wong:
 “I’m also chief of the division of clinical decision making in the department of medicine here.”

KRISTIN:
Get that? He helps people make tough clinical decisions.

JOHN:
So why does Dr. Wong say we can’t treat everyone right now?

Dr. John Wong:
“This disease is so common, the drug cost, that if the individuals who have hepatitis C wanted all to be or could be treated, all of them this year, it wouldn’t be fiscally possible, because we’d have to, for example, not treat cancer.”

JOHN:                                                                                              
We can’t not treat cancer. So what do you do?

KRISTIN:
Doctor Wong says one way is to set aside all the talk about the high price of these new hepatitis C drugs. Because there are other drugs that cost just as much or more to treat other diseases. But you can’t compare them on price. It’s apples to oranges.

Dr. John Wong:
 “If you want to compare different uses of money say, in a health care system, should I spend this money on cancer, should I spend it on heart disease, or should I spend it on hepatitis c, you need a common metric.  Can you compare a hepatitis C cure to a cancer cure to a heart attack cure? That’s kind of hard to do. And so to assess or help policymakers to get a sense of how do I allocate my budget, we try to have a common denominator or a common metric, and that typically is, at least currently, when we think about it, how much extra bang for the buck do I get if I spend it on this treatment versus what we usually do?”

KRISTIN:
In other words, is this new treatment cost effective?

JOHN:
That sounds pretty cold. But I guess it makes sense. You have to make these tough decisions. So how do you figure out whether a treatment is cost effective?

KRISTIN:
There’s actually an equation for that. And I asked Doctor Wong to work through an example. Here he is sketching it out for the drug Sovaldi.

JOHN:
That’s the cheaper one, right? The $84,000 dollar one?

KRISTIN:
Right. And when he says “standard care,” he means the old treatment, or what doctors have been using, up until now.

Dr. John Wong:
“So it’s a comparison of the added cost of Sovaldi versus standard care, divided by the added benefit of in quality adjusted life years of sovaldi versus standard care.”

JOHN:
Quality adjusted what? This is where the math part starts, right?

KRISTIN:
Right. So I asked him to sketch out this equation on the back of my notebook.

Dr. John Wong:
“So this is new minus standard…”

KRISTIN:
So he’s jotting down the cost of Sovaldi, $84,000 dollars, minus the cost of standard care. That’s a drug called interferon, which costs about $30,000.

JOHN:
OK –  $84,000 minus $30,000, that’s $54,000 dollars.

KRISTIN:
OK, good. Now he’s drawing a line under those numbers, and underneath he’s writing how much better is the new treatment minus the old treatment.

Dr. John Wong:
 “…and this is new minus standard.”

JOHN:
Wait, wait – “better” is a feeling, not a number. How do you measure that?

KRISTIN:
That’s where this idea comes in: the “quality adjusted life year.”

JOHN:
My head hurts.

KRISTIN:
Hold on – I’ve got someone else who can explain this really well.

Dr. James Chambers:
“My name is James Chambers, I’m an assistant professor at Tufts Medical Center.”

KRISTIN:
He’s a colleague of Dr. Wong’s, and I reached him on the phone because he’d been traveling.

Dr. James Chambers:
 “I’m from County Down, Northern Ireland. I just got back, actually, so my accent’s a little stronger.”

KRISTIN:
So bear with the brogue. But Chambers says a “quality adjusted life year” helps health economists like him compare one treatment to another regardless of what that treatment is for.

Dr. James Chambers:
 “How it does that is it combines two different aspects of health. It combines survival with quality of life. And it combines those two aspects of health into one metric. So in other words it’s a quality-adjusted life year.”

KRISTIN:
So, it’s not only how much longer will this treatment help you live, but also what kind of quality of life will it get you. Back to the equation: let’s say – just pulling these numbers out of my head – let’s say the new treatment, Sovaldi, helps you live 10 extra quality adjusted life years. And let’s say the standard treatment gets you five quality adjusted life years. 10 minus five is five, that’s your denominator. And remember your numerator, what’s on top?

JOHN:
Yes - the cost of Sovaldi minus the cost of the old treatment. That’s $54,000 dollars.

KRISTIN:
So it’s $54,000 dollars divided by five years….before we solve it let’s bring back Doctor Wong.

Dr. John Wong:
“So when you divide those two numbers, if the number is less than $50,000 dollars, that’s…we would generally accept and generally be willing to pay for.”
Me: “In other words, $50,000 bucks is a good deal for an extra year of good quality living.’
Wong: “Yeah. In general, society should be willing to pay that money.”

JOHN:
Why $50,000 dollars? Where did that number come from?

KRISTIN:                                                                                                    
It sounded pretty weird to me, too. But Doctor Wong says it’s a benchmark health economists came up with a while ago. It’s a little controversial. But the idea is that if you extend someone’s life by about a year, you’ll get about $50,000 dollars in productivity out of that person. So anything that costs less than that is considered cost effective. Good bang for your buck. So, what did you come up with?

JOHN:
$10,800 dollars. So that seems pretty cost effective.

KRISTIN:
Yeah. Don’t forget, we just made up the quality-adjusted life years gained by each treatment. Doctor Wong and Professor Chambers say we don’t have enough data yet about the new drugs to really know those numbers. And Chambers says we should be asking more than just are these drugs cost effective. Because there are so many people who could benefit from them, we should really be asking, how many can we afford to treat right now?

JOHN:
I’m glad I don’t have to make that decision.

KRISTIN:
Me too. Thanks, John.

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This series was supported by The California Endowment Health Journalism Fellowships, a program of the USC Annenberg School for Communication and Journalism.