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Economic and Public Health Impacts of Policies Restricting Access to Hepatitis C Treatment for Medicaid Patients

Open ArchivePublished:March 24, 2016DOI:https://doi.org/10.1016/j.jval.2016.01.010

      Abstract

      Background

      Interferon-free hepatitis C treatment regimens are effective but very costly. The cost-effectiveness, budget, and public health impacts of current Medicaid treatment policies restricting treatment to patients with advanced disease remain unknown.

      Objectives

      To evaluate the cost-effectiveness of current Medicaid policies restricting hepatitis C treatment to patients with advanced disease compared with a strategy providing unrestricted access to hepatitis C treatment, assess the budget and public health impact of each strategy, and estimate the feasibility and long-term effects of increased access to treatment for patients with hepatitis C.

      Methods

      Using a Markov model, we compared two strategies for 45- to 55-year-old Medicaid beneficiaries: 1) Current Practice—only advanced disease is treated before Medicare eligibility and 2) Full Access—both early-stage and advanced disease are treated before Medicare eligibility. Patients could develop progressive fibrosis, cirrhosis, or hepatocellular carcinoma, undergo transplantation, or die each year. Morbidity was reduced after successful treatment. We calculated the incremental cost-effectiveness ratio and compared the costs and public health effects of each strategy from the perspective of Medicare alone as well as the Centers for Medicare & Medicaid Services perspective. We varied model inputs in one-way and probabilistic sensitivity analyses.

      Results

      Full Access was less costly and more effective than Current Practice for all cohorts and perspectives, with differences in cost ranging from $5,369 to $11,960 and in effectiveness from 0.82 to 3.01 quality-adjusted life-years. In a probabilistic sensitivity analysis, Full Access was cost saving in 93% of model iterations. Compared with Current Practice, Full Access averted 5,994 hepatocellular carcinoma cases and 121 liver transplants per 100,000 patients.

      Conclusions

      Current Medicaid policies restricting hepatitis C treatment to patients with advanced disease are more costly and less effective than unrestricted, full-access strategies. Collaboration between state and federal payers may be needed to realize the full public health impact of recent innovations in hepatitis C treatment.

      Keywords

      Introduction

      Hepatitis C affects more than 3.2 million patients in the United States and is a common cause of chronic liver disease worldwide [
      • Mohd Hanafiah K.
      • Groeger J.
      • Flaxman A.D.
      • et al.
      Global epidemiology of hepatitis C virus infection: new estimates of age-specific antibody to HCV seroprevalence.
      ,
      • Chak E.
      • Talal A.H.
      • Sherman K.E.
      • et al.
      Hepatitis C virus infection in USA: an estimate of true prevalence.
      ]. Most infected patients develop chronic disease that can remain asymptomatic for decades. However, left untreated, chronic hepatitis C causes progressive hepatic fibrosis, which can result in severe complications. After developing cirrhosis, patients are at risk for hepatocellular carcinoma, may require liver transplantation, and have an increased risk of early mortality [
      • Wong R.J.
      • Aguilar M.
      • Cheung R.
      • et al.
      Nonalcoholic steatohepatitis is the second leading etiology of liver disease among adults awaiting liver transplantation in the United States.
      ,
      • Davis G.L.
      • Albright J.E.
      • Cook S.F.
      • et al.
      Projecting future complications of chronic hepatitis C in the United States.
      ,
      • Butt A.A.
      • Wang X.
      • Moore C.G.
      Effect of hepatitis C virus and its treatment on survival.
      ]. Successful treatment can reduce morbidity and improve patients’ quality of life [
      • Butt A.A.
      • Wang X.
      • Moore C.G.
      Effect of hepatitis C virus and its treatment on survival.
      ,
      • Dieperink E.
      • Pocha C.
      • Thuras P.
      • et al.
      All-cause mortality and liver-related outcomes following successful antiviral treatment for chronic hepatitis C.
      ,
      • van der Meer A.J.
      • Veldt B.J.
      • Feld J.J.
      • et al.
      Association between sustained virological response and all-cause mortality among patients with chronic hepatitis C and advanced hepatic fibrosis.
      ]. In fact, if recent advances in drug regimens are widely implemented, hepatitis C could become a rare disease as early as 2036 [
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ].
      New hepatitis C treatments are highly effective and have few adverse effects, but high costs could limit access to these medications. The preceding generation of interferon-based treatment regimens were poorly tolerated by patients, and required lengthy treatment durations, so many patients have remained untreated [
      • Holmberg S.D.
      • Spradling P.R.
      • Moorman A.C.
      • et al.
      Hepatitis C in the United States.
      ]. Recently approved interferon-free drug regimens for patients with genotype 1 disease are more than 94% effective in as few as 8 weeks for many patient subgroups, but can cost up to $190,000 per patient [
      • Liang T.J.
      • Ghany M.G.
      Therapy of hepatitis C—back to the future.
      ,
      A 4-drug combination (Viekira Pak) for hepatitis C.
      ,
      A combination of ledipasvir and sofosbuvir (Harvoni) for hepatitis C.
      ]. Despite their high cost, interferon-free regimens have been demonstrated to be cost-effective at thresholds of $50,000 to $100,000 per quality-adjusted life-year (QALY) [
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
      ,
      • Chidi A.P.
      • Rogal S.
      • Bryce C.L.
      • et al.
      Cost-effectiveness of new antiviral regimens for treatment-naive US veterans with hepatitis C.
      ,
      • Najafzadeh M.
      • Andersson K.
      • Shrank W.H.
      • et al.
      Cost-effectiveness of novel regimens for the treatment of hepatitis C virus.
      ].
      Resource-constrained government health insurance programs, including Medicaid and Medicare, cover a substantial proportion of US patients with hepatitis C and are heavily impacted by the high prices of these drugs. Most state Medicaid programs restrict treatment of hepatitis C to patients with advanced liver disease because of medication costs [
      • Haque M.
      • Zariat A.
      Treatment strategy for hepatitis C: a dilemma for the payers and the providers.
      ]. Because hepatitis C is most prevalent in patients aged 45 years and older, many Medicaid patients with early-stage disease may not develop advanced disease or complications until after becoming eligible for Medicare [
      • Denniston M.M.
      • Jiles R.B.
      • Drobeniuc J.
      • et al.
      Chronic hepatitis C virus infection in the United States, National Health and Nutrition Examination Survey 2003 to 2010.
      ,

      Neuman T, Hoadley J, Cubanski J. The cost of a cure: Medicare’s role in treating hepatitis C. Health Affairs Blog.

      ].
      Restrictive hepatitis C treatment policies are likely to reduce short-term costs to state Medicaid programs. However, it is unclear how these policies might shift the financial burden of hepatitis C management to the Medicare program or impact overall costs to the Centers for Medicare & Medicaid Services (CMS). In addition, the public health impact of delaying treatment for early-stage patients until after disease progression remains unknown. Thus, this study evaluated the cost-effectiveness of current Medicaid policies restricting hepatitis C treatment to patients with advanced disease compared with a strategy providing unrestricted access to hepatitis C treatment. We also assessed the budget and public health impact of each strategy and estimated the feasibility and long-term effects of increased access to treatment for patients with hepatitis C.

      Methods

       Model Structure and Perspective

      Using a Markov state-transition model, we conducted cost-effectiveness, budget, and public health impact analyses from the perspectives of 1) the Medicare program alone, which included costs and effects accrued after patients became eligible for Medicare benefits, and 2) CMS, which incorporated costs and effects accrued during the entire study period. We considered lifetime costs and outcomes, used 3% annual discounting (varied in sensitivity analysis), and adjusted all prices to 2015 US dollars using the Consumer Price Index.

       Model Cohort

      We modeled hypothetical cohorts of 45-, 50-, and 55-year-old treatment-naive and treatment-experienced Medicaid patients diagnosed with genotype 1 hepatitis C. Our selected age groups comprise approximately 95% of the Medicaid hepatitis C population [
      Centers for Disease Control and Prevention, National Center for Health Statistics. National Health and Nutrition Examination Survey Data. Hyattsville, MD: Centers for Disease Control and Prevention, 2012. Available from: http://wwwn.cdc.gov/Nchs/Nhanes/Search/nhanes11_12.aspx. [Accessed January 12, 2016].
      ]. Our cohorts excluded patients with any history of decompensated cirrhosis, liver transplantation, or HIV coinfection. Chronic hepatitis C disease severity is measured using the Meta-analysis of Histologic Data in Viral Hepatitis (METAVIR) score, which describes five stages of liver fibrosis: F0, no hepatic fibrosis; F1, portal fibrosis without septa; F2, portal fibrosis with few septa; F3, many septa without cirrhosis; and F4, cirrhosis [
      • Bedossa P.
      • Poynard T.
      An algorithm for the grading of activity in chronic hepatitis C. The METAVIR Cooperative Study Group.
      ]. We estimated the baseline distribution of METAVIR scores using model-based predictions of the hepatitis C virus (HCV)-infected population in 2014 (Table 1) [
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ,
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
      ].
      Table 1Hepatitis C cohort characteristics, natural history, costs, and utilities
      DescriptionBase caseLowHighDistributionSource
      Cohort characteristics, %
       F0-20.510.380.64Dirichlet
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ,
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
       F30.210.160.26Dirichlet
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ,
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
       F40.280.210.35Dirichlet
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ,
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
       Treatment-naive0.610.460.76Beta
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ,
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
      Risk of disease progression, %
       F0-2 to F30.120.110.13Beta
      • Thein H.H.
      • Yi Q.
      • Dore G.J.
      • et al.
      Estimation of stage-specific fibrosis progression rates in chronic hepatitis C virus infection: a meta-analysis and meta-regression.
       F3 to F40.120.090.14Beta
      • Thein H.H.
      • Yi Q.
      • Dore G.J.
      • et al.
      Estimation of stage-specific fibrosis progression rates in chronic hepatitis C virus infection: a meta-analysis and meta-regression.
       F3 to HCC0.0100.03Beta
      • Dienstag J.L.
      • Ghany M.G.
      • Morgan T.R.
      • et al.
      A prospective study of the rate of progression in compensated, histologically advanced chronic hepatitis C.
       F4 to DC0.040.010.04Beta
      • Dienstag J.L.
      • Ghany M.G.
      • Morgan T.R.
      • et al.
      A prospective study of the rate of progression in compensated, histologically advanced chronic hepatitis C.
      ,
      • Fattovich G.
      • Giustina G.
      • Degos F.
      • et al.
      Morbidity and mortality in compensated cirrhosis type C: a retrospective follow-up study of 384 patients.
       F4 to HCC0.030.010.08Beta
      • Dienstag J.L.
      • Ghany M.G.
      • Morgan T.R.
      • et al.
      A prospective study of the rate of progression in compensated, histologically advanced chronic hepatitis C.
      ,
      • Alazawi W.
      • Cunningham M.
      • Dearden J.
      • et al.
      Systematic review: outcome of compensated cirrhosis due to chronic hepatitis C infection.
       DC to HCC0.070.030.08Beta
      • Planas R.
      • Balleste B.
      • Alvarez M.A.
      • et al.
      Natural history of decompensated hepatitis C virus-related cirrhosis: a study of 200 patients.
       DC to transplant0.030.020.06Beta
      • Thuluvath P.J.
      • Guidinger M.K.
      • Fung J.J.
      • et al.
      Liver transplantation in the United States, 1999–2008.
      ,
      • Davis G.L.
      • Alter M.J.
      • El-Serag H.
      • et al.
      Aging of hepatitis C virus (HCV)-infected persons in the United States: a multiple cohort model of HCV prevalence and disease progression.
       HCC to transplant0.0400.14Beta
      • Lang K.
      • Danchenko N.
      • Gondek K.
      • et al.
      The burden of illness associated with hepatocellular carcinoma in the United States.
      ,
      • Saab S.
      • Hunt D.R.
      • Stone M.A.
      • et al.
      Timing of hepatitis C antiviral therapy in patients with advanced liver disease: a decision analysis model.
      Progression after SVR, %
       F3 to HCC0.0070.0060.008Beta
      • Butt A.A.
      • Wang X.
      • Moore C.G.
      Effect of hepatitis C virus and its treatment on survival.
      ,
      • Morgan T.R.
      • Ghany M.G.
      • Kim H.Y.
      • et al.
      Outcome of sustained virological responders with histologically advanced chronic hepatitis C.
       F4 to DC0.0050.0020.096Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • Morgan T.R.
      • Ghany M.G.
      • Kim H.Y.
      • et al.
      Outcome of sustained virological responders with histologically advanced chronic hepatitis C.
       F4 to HCC0.00700.019Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • Morgan T.R.
      • Ghany M.G.
      • Kim H.Y.
      • et al.
      Outcome of sustained virological responders with histologically advanced chronic hepatitis C.
      ,
      • Smith B.D.1
      • Morgan R.L.
      • Beckett G.A.
      Centers for Disease Control and Prevention. Recommendations for the identification of chronic hepatitis C virus infection among persons born during 1945–1965.
      Mortality rates
       Hepatitis C
      Compared with all-cause mortality.
      2.371.284.38Lognormal
      • El-Kamary S.S.
      • Jhaveri R.
      • Shardell M.D.
      All-cause, liver-related, and non-liver-related mortality among HCV-infected individuals in the general US population.
       Cirrhosis (RR)
      Compared with F0-2.
      2.501.235.08Lognormal
      • Dieperink E.
      • Pocha C.
      • Thuras P.
      • et al.
      All-cause mortality and liver-related outcomes following successful antiviral treatment for chronic hepatitis C.
       SVR
      Compared with all-cause mortality.
      1.00Estimate
       SVR after F4 (RR)
      Compared with pretreatment state.
      0.390.140.65Lognormal
      • Butt A.A.
      • Wang X.
      • Moore C.G.
      Effect of hepatitis C virus and its treatment on survival.
      ,
      • Dieperink E.
      • Pocha C.
      • Thuras P.
      • et al.
      All-cause mortality and liver-related outcomes following successful antiviral treatment for chronic hepatitis C.
      ,
      • van der Meer A.J.
      • Veldt B.J.
      • Feld J.J.
      • et al.
      Association between sustained virological response and all-cause mortality among patients with chronic hepatitis C and advanced hepatic fibrosis.
       DC, %0.100.040.21Beta
      • Planas R.
      • Balleste B.
      • Alvarez M.A.
      • et al.
      Natural history of decompensated hepatitis C virus-related cirrhosis: a study of 200 patients.
       HCC, %0.430.340.51Beta
      • Fattovich G.
      • Giustina G.
      • Degos F.
      • et al.
      Morbidity and mortality in compensated cirrhosis type C: a retrospective follow-up study of 384 patients.
      ,
      • Jain A.
      • Reyes J.
      • Kashyap R.
      • et al.
      Long-term survival after liver transplantation in 4,000 consecutive patients at a single center.
       Transplant year 1, %0.140.060.42Beta
      • Hagan L.M.
      • Sulkowski M.S.
      • Schinazi R.F.
      Cost analysis of sofosbuvir/ribavirin versus sofosbuvir/simeprevir for genotype 1 hepatitis C virus in interferon-ineligible/intolerant individuals.
      ,
      • Wolfe R.A.
      • Roys E.C.
      • Merion R.M.
      Trends in organ donation and transplantation in the United States, 1999-2008.
       Transplant year 2+, %0.030.020.11Beta
      • Wolfe R.A.
      • Roys E.C.
      • Merion R.M.
      Trends in organ donation and transplantation in the United States, 1999-2008.
      Annual follow-up costs (2015 US $)
       F0-31,357894,072Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
      ,
      • Younossi Z.M.
      • Singer M.E.
      • Mir H.M.
      • et al.
      Impact of interferon free regimens on clinical and cost outcomes for chronic hepatitis C genotype 1 patients.
       F41,4097293,342Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
      ,
      • Younossi Z.M.
      • Singer M.E.
      • Mir H.M.
      • et al.
      Impact of interferon free regimens on clinical and cost outcomes for chronic hepatitis C genotype 1 patients.
       DC22,33812,76839,446Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
       HCC47,88525,71374,200Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
       Transplant year 1228,090165,537366,183Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
      ,
      • Schnitzler M.A.
      • Skeans M.A.
      • Axelrod D.A.
      • et al.
      OPTN/SRTR 2013 Annual Data Report: economics.
       Transplant year 2+38,66236,99855,497Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
       SVR (F0-2)0Estimate
      Utilities before SVR
       F0-20.850.830.87Beta
      • Thein H.H.
      • Krahn M.
      • Kaldor J.M.
      • et al.
      Estimation of utilities for chronic hepatitis C from SF-36 scores.
      ,
      • Hagan L.M.
      • Sulkowski M.S.
      • Schinazi R.F.
      Cost analysis of sofosbuvir/ribavirin versus sofosbuvir/simeprevir for genotype 1 hepatitis C virus in interferon-ineligible/intolerant individuals.
       F30.790.770.81Beta
      • Thein H.H.
      • Krahn M.
      • Kaldor J.M.
      • et al.
      Estimation of utilities for chronic hepatitis C from SF-36 scores.
      ,
      • Hagan L.M.
      • Sulkowski M.S.
      • Schinazi R.F.
      Cost analysis of sofosbuvir/ribavirin versus sofosbuvir/simeprevir for genotype 1 hepatitis C virus in interferon-ineligible/intolerant individuals.
       F40.760.670.79Beta
      • Thein H.H.
      • Krahn M.
      • Kaldor J.M.
      • et al.
      Estimation of utilities for chronic hepatitis C from SF-36 scores.
      ,
      • Hagan L.M.
      • Sulkowski M.S.
      • Schinazi R.F.
      Cost analysis of sofosbuvir/ribavirin versus sofosbuvir/simeprevir for genotype 1 hepatitis C virus in interferon-ineligible/intolerant individuals.
       DC0.690.440.69Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
       HCC0.670.60.72Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
       Transplant year 10.500.300.80Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
       Transplant year 2+0.770.570.77Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      Utilities after SVR
       F0-20.920.900.94Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
       F30.860.840.88Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
       F40.830.810.85Beta
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      DC, decompensated cirrhosis; F0-2, F3, F4, METAVIR stages of hepatic fibrosis; HCC, hepatocellular carcinoma; METAVIR, Meta-analysis of Histologic Data in Viral Hepatitis; RR, relative risk; SVR, sustained virologic response.
      low asterisk Compared with all-cause mortality.
      Compared with F0-2.
      Compared with pretreatment state.

       Natural History Model

      We created a Markov model to simulate the natural history and epidemiology of hepatitis C infection (Fig. 1). Patients accrued liver-related treatment and follow-up costs as well as QALYs for their Markov state at the end of each 1-year cycle. Patients could make one state transition each year. Mortality was possible during each model stage; we estimated age-specific, annual all-cause mortality rates using US life tables [
      • Arias E.
      United States Life Tables, 2009. National Vital Statistics Reports.
      ]. Disease progression and excess liver-related mortality occurred according to stage-specific transition probabilities and relative risks of mortality established in previous studies (Table 1).
      Figure thumbnail gr1
      Fig. 1Markov state transition model simulating the natural history of hepatitis C. Note. Transition probabilities derived from recent population-based studies. F0-2, F3, and F4 represent METAVIR stages of hepatic fibrosis. F3- and F4-treated states involve reduced risks of liver-related morbidity and mortality compared with untreated states. METAVIR, Meta-analysis of Histologic Data in Viral Hepatitis.
      We grouped patients into three stages of baseline disease severity: early-stage disease (METAVIR F0-F2), advanced fibrosis (METAVIR F3), and compensated cirrhosis (METAVIR F4). Patients with compensated cirrhosis could later develop complications including decompensated cirrhosis, liver transplantation, and hepatocellular carcinoma. Patients with early-stage disease, advanced fibrosis, or compensated cirrhosis could receive hepatitis C treatment. We assumed that after successful treatment, patients with early-stage disease would return to full health and accrue no further hepatitis C infection–related costs. In contrast, patients with advanced fibrosis or cirrhosis would have markedly reduced risks of disease progression, complications, and mortality, but no reduction in follow-up costs after successful treatment (Table 1).

       Treatment

      We assumed that all patients would be treated with one of two currently available interferon-free hepatitis C drug regimens: a single-dose two-drug combination of sofosbuvir/ledipasvir (SOF/LDV) or a multidose three-drug combination of ombitasvir, paritaprevir, and ritonavir with dasabuvir (3D). At the time of analysis, the American Association for the Study of Liver Diseases recommended both these treatments for patients with genotype 1 hepatitis C (see Appendix Table 1 in Supplemental Materials found at doi:10.1016/j.jval.2016.01.010). Because utility data were not available for the 3D regimen at the time of our analysis, we performed our primary analysis using data for SOF/LDV (Table 2) and used estimates for 3D in sensitivity analyses. We estimated the efficacy of each treatment regimen using data from recently published clinical trials [
      • Kowdley K.V.
      • Gordon S.C.
      • Reddy K.R.
      • et al.
      Ledipasvir and sofosbuvir for 8 or 12 weeks for chronic HCV without cirrhosis.
      ,
      • Afdhal N.
      • Zeuzem S.
      • Kwo P.
      • et al.
      Ledipasvir and sofosbuvir for untreated HCV genotype 1 infection.
      ,
      • Afdhal N.
      • Reddy K.R.
      • Nelson D.R.
      • et al.
      Ledipasvir and sofosbuvir for previously treated HCV genotype 1 infection.
      ,
      • Lawitz E.
      • Poordad F.F.
      • Pang P.S.
      • et al.
      Sofosbuvir and ledipasvir fixed-dose combination with and without ribavirin in treatment-naive and previously treated patients with genotype 1 hepatitis C virus infection (LONESTAR): an open-label, randomised, phase 2 trial.
      ,
      • Zeuzem S.
      • Jacobson I.M.
      • Baykal T.
      • et al.
      Retreatment of HCV with ABT-450/r-ombitasvir and dasabuvir with ribavirin.
      ,
      • Andreone P.
      • Colombo M.G.
      • Enejosa J.V.
      • et al.
      ABT-450, ritonavir, ombitasvir, and dasabuvir achieves 97% and 100% sustained virologic response with or without ribavirin in treatment-experienced patients with HCV genotype 1b infection.
      ,
      • Feld J.J.
      • Kowdley K.V.
      • Coakley E.
      • et al.
      Treatment of HCV with ABT-450/r-ombitasvir and dasabuvir with ribavirin.
      ,
      • Ferenci P.
      • Bernstein D.
      • Lalezari J.
      • et al.
      ABT-450/r-ombitasvir and dasabuvir with or without ribavirin for HCV.
      ,
      • Poordad F.
      • Hezode C.
      • Trinh R.
      • et al.
      ABT-450/r-ombitasvir and dasabuvir with ribavirin for hepatitis C with cirrhosis.
      ]. In patient subgroups for which several alternative treatment options have demonstrated similar effectiveness, we chose the least costly drug regimen.
      Table 2Hepatitis C treatment parameters
      ParameterBase caseLowHighDistributionSource
      Treatment efficacy
       SOF/LDV × 8 wk0.940.900.97Beta
      • Kowdley K.V.
      • Gordon S.C.
      • Reddy K.R.
      • et al.
      Ledipasvir and sofosbuvir for 8 or 12 weeks for chronic HCV without cirrhosis.
       SOF/LDV × 12 wk (naive)0.960.921.00Beta
      • Kowdley K.V.
      • Gordon S.C.
      • Reddy K.R.
      • et al.
      Ledipasvir and sofosbuvir for 8 or 12 weeks for chronic HCV without cirrhosis.
      ,
      • Afdhal N.
      • Zeuzem S.
      • Kwo P.
      • et al.
      Ledipasvir and sofosbuvir for untreated HCV genotype 1 infection.
       SOF/LDV × 12 wk (naive F4)0.970.841.00Beta
      • Afdhal N.
      • Zeuzem S.
      • Kwo P.
      • et al.
      Ledipasvir and sofosbuvir for untreated HCV genotype 1 infection.
       SOF/LDV × 12 wk (experienced)0.950.890.99Beta
      • Afdhal N.
      • Reddy K.R.
      • Nelson D.R.
      • et al.
      Ledipasvir and sofosbuvir for previously treated HCV genotype 1 infection.
       SOF/LDV/RBV × 12 wk (F4)0.880.720.92Beta
      • Afdhal N.
      • Reddy K.R.
      • Nelson D.R.
      • et al.
      Ledipasvir and sofosbuvir for previously treated HCV genotype 1 infection.
      ,
      • Lawitz E.
      • Poordad F.F.
      • Pang P.S.
      • et al.
      Sofosbuvir and ledipasvir fixed-dose combination with and without ribavirin in treatment-naive and previously treated patients with genotype 1 hepatitis C virus infection (LONESTAR): an open-label, randomised, phase 2 trial.
      Treatment disutilities
       SOF/LDV × 8 wk0.03−0.190.25Normal
      • Younossi Z.M.
      • Stepanova M.
      • Marcellin P.
      • et al.
      Treatment with ledipasvir and sofosbuvir improves patient-reported outcomes: results from the Ion-1, 2 and 3 clinical trials.
       SOF/LDV × 12 wk0.04−0.200.28Normal
      • Younossi Z.M.
      • Stepanova M.
      • Marcellin P.
      • et al.
      Treatment with ledipasvir and sofosbuvir improves patient-reported outcomes: results from the Ion-1, 2 and 3 clinical trials.
       SOF/LDV/RBV × 12 wk−0.02−0.300.26Normal
      • Younossi Z.M.
      • Stepanova M.
      • Marcellin P.
      • et al.
      Treatment with ledipasvir and sofosbuvir improves patient-reported outcomes: results from the Ion-1, 2 and 3 clinical trials.
      Drug costs ($) (weekly)
       SOF/LDV587425007875GammaNADAC
       Ribavirin152.78114.59190.98Gamma
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      Medical monitoring costs ($) (each, ±25%)
       Office visits (CPT 99213)72.9451.1379.69GammaMPFS
       Complete blood cell count10.588.8114.30GammaMPFS
       Complete metabolic panel14.3711.5119.43GammaMPFS
       Quantitative HCV PCR58.2938.6178.77GammaMPFS
      AWP, average wholesale price; CPT, Current Procedural Terminology, Fourth Edition; HCV, hepatitis C; MPFS, Medicare Physician Fee Schedule 2015; NADAC, National Average Drug Acquisition Cost; PCR, polymerase chain reaction; SOF/LDV, sofosbuvir/ledipasvir; 3D, ombitasvir, ritonavir, and paritaprevir with dasabuvir.
      We determined SOF/LDV treatment disutility using data from a quality-of-life study conducted alongside recent clinical trials [
      • Younossi Z.M.
      • Stepanova M.
      • Marcellin P.
      • et al.
      Treatment with ledipasvir and sofosbuvir improves patient-reported outcomes: results from the Ion-1, 2 and 3 clinical trials.
      ]. Because utility data for the 3D and 3D with ribavirin regimens were not available, we used treatment disutility data for the SOF/LDV and SOF/LDV with ribavirin regimens, respectively, in our sensitivity analysis (Table 2).

       Costs and Effectiveness

      We estimated treatment and follow-up costs for patients with hepatitis C (Table 1). In the base case, we included a 23.1% discount from the national average drug acquisition price for each drug regimen, which is required as part of the Medicaid drug rebate program; we varied drug prices in sensitivity analysis. We used the Medicare physician fee schedule to calculate the costs of on-treatment medical monitoring [
      Centers for Medicare and Medicaid Services. Medicare Physician Fee Schedule Search. US Department of Health & Human Services. 2015. Available from: https://www.cms.gov/apps/physician-fee-schedule/search/search-criteria.aspx. [Accessed July 23, 2015]
      ], including a single pretreatment office visit, complete blood cell count, complete metabolic panel, and viral load measurement; monthly office visits, viral load measurements, and metabolic panels during treatment; and a single post-treatment office visit, viral load measurement, and metabolic panel. We assumed that patients using ribavirin-containing regimens were monitored more frequently, with twice-monthly office visits and complete blood cell counts (Table 2).
      From the Medicare perspective, costs and QALYs began to accrue upon Medicare eligibility at age 65 years (or earlier for the share eligible due to disability). From the CMS perspective, costs and QALYs accrued throughout the study period. Because Medicare Part D can involve substantial cost sharing for seniors not receiving low- income subsidies, we subtracted expected patient out-of-pocket costs estimated using current Part D coverage rules [
      Centers for Medicare and Medicaid Services. Closing the Coverage Gap—Medicare Prescription Drugs Are Becoming More Affordable; CMS Product No. 11493. US Department of Health & Human Services. Available from: https://www.medicare.gov/Pubs/pdf/11493.pdf. 2015 [Accessed July 2, 2015].
      ], but assumed that the prescription drug coverage gap (i.e., “donut hole”) would not be in place by the time the oldest cohort becomes eligible for Medicare benefits.
      We determined annual follow-up costs for each health state using recent estimates for Medicare and managed care patients [
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • McAdam-Marx C.
      • McGarry L.J.
      • Hane C.A.
      • et al.
      All-cause and incremental per patient per year cost associated with chronic hepatitis C virus and associated liver complications in the United States: a managed care perspective.
      ,
      • Younossi Z.M.
      • Singer M.E.
      • Mir H.M.
      • et al.
      Impact of interferon free regimens on clinical and cost outcomes for chronic hepatitis C genotype 1 patients.
      ,
      • Schnitzler M.A.
      • Skeans M.A.
      • Axelrod D.A.
      • et al.
      OPTN/SRTR 2013 Annual Data Report: economics.
      ], and used age-specific median utility values for healthy patients [
      • Gold M.R.
      • Franks P.
      • McCoy K.I.
      • et al.
      Toward consistency in cost-utility analyses: using national measures to create condition-specific values.
      ]. We estimated utility weights for each hepatitis C–related health state on the basis of recent comprehensive reviews of the literature [
      • Coffin P.O.
      • Scott J.D.
      • Golden M.R.
      • et al.
      Cost-effectiveness and population outcomes of general population screening for hepatitis C.
      ,
      • Thein H.H.
      • Krahn M.
      • Kaldor J.M.
      • et al.
      Estimation of utilities for chronic hepatitis C from SF-36 scores.
      ,
      • Hagan L.M.
      • Sulkowski M.S.
      • Schinazi R.F.
      Cost analysis of sofosbuvir/ribavirin versus sofosbuvir/simeprevir for genotype 1 hepatitis C virus in interferon-ineligible/intolerant individuals.
      ]. Finally, we varied all parameters over feasible ranges in sensitivity analyses (Table 1).

       Strategies

      We compared two strategies for managing hepatitis C infection in Medicaid beneficiaries: 1) Current Practice—only patients with advanced fibrosis or cirrhosis are treated for hepatitis C before becoming eligible for Medicare and treatment for patients with early-stage disease is deferred until disease progression or Medicare eligibility; and 2) Full Access—patients with early-stage disease, advanced fibrosis, and cirrhosis are treated before becoming eligible for Medicare benefits (Fig. 2). Because some Medicare Advantage plans are adopting more restrictive treatment strategies, we assumed in the base case that 50% of patients with early-stage disease would be treated on Medicare eligibility (varied 0%–100% in sensitivity analysis).
      Figure thumbnail gr2
      Fig. 2Annual public health impact of unrestricted vs. restricted access to hepatitis C treatment among Medicaid beneficiaries. Estimates of: (A) Liver transplants averted, (B) hepatocellular carcinoma cases Averted, and (C) deaths averted per 100,000 Medicaid patients with HCV. HCV, hepatitis C virus.

       Assumptions

      To perform this analysis, we made a number of simplifying assumptions to systematically bias the model against the Full-Access strategy. We assumed that 1) patients who failed treatment with sofosbuvir- or ombitasvir-based regimens would not be re-treated because guidelines for re-treatment had not yet been developed; 2) only patients 75 years or younger would undergo liver transplantation [
      • Kim W.R.
      • Stock P.G.
      • Smith J.M.
      • et al.
      OPTN/SRTR 2011 Annual Data Report: liver.
      ]; 3) Medicare and Medicaid programs would have similar follow-up and treatment costs; 4) patients would become eligible for full Medicare benefits at age 65 years; however, to account for Medicare-Medicaid dual eligibility, we estimated that 14% of Medicaid recipients younger than 65 years would receive Medicare disability benefits while 14% of Medicare beneficiaries older than 65 years received Medicaid benefits [
      Medicare-Medicaid Coordination Office, Centers for Medicare & Medicaid Services. Medicare-Medicaid Dual Enrollment from 2006 through 2013. US Department of Health & Human Services. 2014. Available from: https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/DualEnrollment20062013.pdf. [Accessed June 25, 2015].
      ,
      Office of the Actuary, Centers for Medicare & Medicaid Services. Actuarial Report on the Financial Outlook for Medicaid. US Department of Health & Human Services, 2013. Available from: https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/DualEnrollment20062013.pdf. [Accessed July 2, 2015].
      ]; and 5) the size of the Medicaid hepatitis C population would remain static over time. We accounted for a one-time Medicaid expansion in a sensitivity analysis.

       Cost-Effectiveness Analyses

      We completed the analyses separately for cohorts of 45-, 50-, and 55-year-old Medicaid beneficiaries with hepatitis C. In the base case, we calculated the incremental cost-effectiveness ratio (ICER), which reflects the additional investment required to gain an additional QALY. Although a $50,000/QALY threshold has classically been used in cost-effectiveness analyses, ICER thresholds of $100,000/QALY to $150,000/QALY may better reflect contemporary preferences [
      • Braithwaite R.S.
      • Meltzer D.O.
      • King Jr, J.T.
      • et al.
      What does the value of modern medicine say about the $50,000 per quality-adjusted life-year decision rule?.
      ,
      • Neumann P.J.
      • Cohen J.T.
      • Weinstein M.C.
      Updating cost-effectiveness--the curious resilience of the $50,000-per-QALY threshold.
      ].
      We also conducted sensitivity analyses to determine whether variations in model inputs would change the preferred strategy. First, we varied model inputs individually over a range of plausible values in one-way sensitivity analyses (Table 1). Then, we used Monte-Carlo probabilistic sensitivity analyses in which values are randomly sampled from each variable’s probability distribution and repeated over 5000 iterations to determine the likelihood that each strategy is cost-effective [
      • Doubilet P.
      • Begg C.B.
      • Weinstein M.C.
      • et al.
      Probabilistic sensitivity analysis using Monte Carlo simulation: a practical approach.
      ]. We performed all analyses using TreeAge Pro 2015 (TreeAge Software, Williamstown, MA).

       Structural Sensitivity Analyses

      Because it is not feasible to treat all Medicaid patients with HCV in a single year, we also conducted structural sensitivity analyses using staged treatment strategies, in which patients would be treated over time. We estimated that 450,000 patients with genotype 1 hepatitis C are currently receiving Medicaid benefits, and up to 600,000 may be enrolled if Medicaid expansion is widely adopted [
      • Denniston M.M.
      • Jiles R.B.
      • Drobeniuc J.
      • et al.
      Chronic hepatitis C virus infection in the United States, National Health and Nutrition Examination Survey 2003 to 2010.
      ,
      Centers for Disease Control and Prevention, National Center for Health Statistics. National Health and Nutrition Examination Survey Data. Hyattsville, MD: Centers for Disease Control and Prevention, 2012. Available from: http://wwwn.cdc.gov/Nchs/Nhanes/Search/nhanes11_12.aspx. [Accessed January 12, 2016].
      ,
      • Stepanova M.
      • Younossi Z.M.
      Interferon-free regimens for chronic hepatitis C: barriers due to treatment candidacy and insurance coverage.
      ,
      Kaiser Family Foundation. The Cost of Not Expanding Medicaid. Report #8457. 2013. Available from: https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/DualEnrollment20062013.pdf. [Accessed 6/25/2015].
      ,
      Kaiser Family Foundation
      Medicaid expansion under the Affordable Care Act.
      ,
      • Buettgens M.
      • Holahan J.
      • Recht H.
      Medicaid Expansion, Health Coverage, and Spending: An Update for the 21 States That Have Not Expanded Eligibility.
      ].
      We also estimated treatment capacity for each strategy. On the basis of total Medicaid hepatitis C drug expenditures in 2014 and previous reports of treatment capacity, we estimated that approximately 30,000 Medicaid patients with hepatitis C could be treated in a given year [
      • Volk M.L.
      • Tocco R.
      • Saini S.
      • et al.
      Public health impact of antiviral therapy for hepatitis C in the United States.
      ,
      Centers for Medicare & Medicaid Services. 2014 National Summary State Drug Utilization. US Department of Health & Human Services. 2014. Available from: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Benefits/Prescription-Drugs/Downloads/Rx-By-State/NA/NAUTIL14.zip. [Accessed June 1, 2015].
      ]. Because more patients are likely to be treated each year under the Full-Access strategy, we also modeled an expanded Full-Access strategy with an annual treatment capacity of 40,000 patients. Recent developments suggest that increased treatment capacity is likely to be feasible because new drug regimens are now 24 to 36 weeks shorter in duration than interferon-based regimens, allowing more patients to be treated by the same number of physicians in any given year. In addition, a recent study demonstrated that primary care providers can effectively administer hepatitis C treatment in uncomplicated cases [
      • Arora S.
      • Thornton K.
      • Murata G.
      • et al.
      Outcomes of treatment for hepatitis C virus infection by primary care providers.
      ]. If this practice were widely adopted in the United States, then a much larger physician workforce would be available to treat early-stage patients with hepatitis C. To derive approximate annual treatment probabilities, we estimated that 13% of early-stage patients die or progress each year, whereas the number of patients with advanced-stage disease is reduced by approximately 1% each year, accounting for entry, progression, and death, based on data from our natural history model (see Appendix Table 2 in Supplemental Materials found at doi:10.1016/j.jval.2016.01.010). In the Current Practice strategy, treatment would be offered to early-stage patients only after all patients with advanced fibrosis or cirrhosis have been treated. In Full-Access strategies, treatment would be equally allocated across fibrosis stages each year.

       Budget and Public Health Impact Analyses

      Finally, we compared the budget and public health impact of each treatment strategy. Using a Markov cohort analysis, which describes the costs and utilities associated with each Markov state during each model year, we estimated and compared cost estimates as well as adverse health outcomes for each strategy. We compared the annual and cumulative costs for both treatment strategies in our base-case analysis. Next, we used the model to estimate the annual and cumulative number of cases of adverse health outcomes such as hepatocellular carcinoma, liver transplantation, and mortality, per 100,000 Medicaid recipients.

      Results

       Base-Case Analyses

      In the base case, the Full-Access strategy was cost saving and more effective compared with the Current Practice strategy for all age cohorts from the Medicare perspective (Table 3). For the 50-year-old cohort, which represented the average Medicaid patient with hepatitis C, the Current Practice strategy ($30,610, 5.47 QALYs) cost an additional $9,200 per patient and yielded 0.84 fewer QALYs compared with the Full-Access strategy ($21,410, 6.31 QALYs). Cost savings for the Full-Access strategy increased with cohort age.
      Table 3Cost-effectiveness of restricted access to hepatitis C treatment: Base-case results
      StrategyMedicare perspectiveCMS perspective
      Costs ($)QALYsICER ($/QALY)Costs ($)QALYsICER ($/QALY)
      45-y-old cohort
       Full Access20,1965.3193,15117.14
       Current Practice27,7074.50Dominated104,42614.13Dominated
      50-y-old cohort
       Full Access21,4106.3190,52415.79
       Current Practice30,6105.47Dominated98,52713.06Dominated
      55-y-old cohort
       Full Access22,7787.5887,54314.36
       Current Practice34,7386.76Dominated92,91212.05Dominated
      ICER, incremental cost-effectiveness ratio; QALY, quality-adjusted life-year.
      From the CMS perspective, the Full-Access strategy was also cost saving for each age cohort, but to a lesser degree. Compared with the Full-Access strategy ($90,524, 15.79 QALYs), the Current Practice strategy cost an additional $8,003 per patient and yielded 2.73 fewer QALYs ($98,527, 13.06 QALYS) for the 50-year-old cohort (Table 3). The Full-Access strategy was more cost saving for younger cohorts from the CMS perspective.

       Sensitivity Analyses

      In one-way sensitivity analyses from the Medicare perspective, the Full-Access strategy was cost saving for all age cohorts regardless of variations in any individual model input. From the CMS perspective, variations in follow-up costs for patients with early-stage disease and in the discount rate impacted the ICER differently in each age cohort. The Full-Access strategy remained cost saving as long as the cost of follow-up for early-stage patients was more than approximately $200 per year in the 45-year-old cohort, $350 per year in the 50-year-old cohort, and $600 per year in the 55-year-old cohort. In addition, the Full-Access strategy was cost saving for discount rates below 5% to 6%, depending on the age of the cohort. The Full-Access strategy was cost saving over the range of plausible values for all other model inputs.
      In probabilistic sensitivity analysis, the Full-Access strategy was cost-effective in 100% of iterations from the Medicare perspective at all willingness-to-pay thresholds. From the CMS perspective, the Full-Access strategy was cost-effective in 93% of iterations at the cost-saving threshold of $0/QALY and in 100% of iterations at $4500/QALY. Including the three-drug regimen instead of SOF/LDV did not change the preferred strategy from either perspective. In our structural sensitivity analysis, the staged Full-Access strategy was cost saving compared with the staged Current Practice strategy for all age cohorts, regardless of annual treatment capacity or the size of the Medicaid hepatitis C population (Table 4).
      Table 4Cost-effectiveness of staged treatment strategies for Medicaid patients with hepatitis C, by number of Medicaid beneficiaries with hepatitis C
      Strategy450,000 patients with HCV600,000 patients with HCV
      Costs ($)QALYsCosts ($)QALYs
      45-y-old cohort
       Expanded Full Access97,13814.7397,46214.20
       Full Access97,46214.2097,54113.64
       Current Practice100,60814.08100,83313.55
      50-y-old cohort
       Full Access92,65712.9892,22012.45
       Expanded Full Access92,77513.4892,65712.98
       Current Practice95,86112.8695,60112.36
      55-y-old cohort
       Full Access86,84111.6885,54211.18
       Expanded Full Access87,77812.1586,84111.68
       Current Practice90,34411.5689,19011.09
      Note. Population size estimates reflect current Medicaid HCV population & potential increase in prevalence due to Medicaid expansion. Current Practice and Full Access, 30,000 patients treated per year; Expanded Full Access, 40,000 patients treated per year.
      HCV, hepatitis C virus; QALYs, quality-adjusted life-years.

       Budget and Public Health Impact Analyses

      Our budget impact analyses revealed that, from the CMS perspective, the Full-Access strategy became cost saving compared with the Current Practice strategy after 13 to 16 years, depending on cohort age. By the end of the study period, the Full-Access strategy saved $10,340 per patient for the 45-year-old cohort, $8,148 for 50-year-olds, and $5,695 for 55-year-old patients. With staged treatment strategies, Full Access became cost saving after 9 years for each age cohort. In the worst-case scenario, with 600,000 hepatitis C patients and 30,000 treated per year, the Full-Access strategy saved $3,197 to $3,568 per patient by the end of the study period, depending on the age of the cohort. For a cohort of 450,000 50-year-old Medicaid patients with hepatitis C, treating 30,000 patients per year using interferon-free regimens would cost Medicaid programs an average of $4,746 per beneficiary annually with the Current Practice strategy and $4,568 per beneficiary annually with the Full-Access strategy. If a total of 600,000 patients required treatment, costs would decrease to $4,640 per beneficiary with Current Practice and $4,428 per beneficiary with Full Access. In comparison, no treatment would cost $2309 per beneficiary.
      The public health impact analysis demonstrated that for every 100,000 50-year-old Medicaid beneficiaries, the Full-Access strategy could avert approximately 5,994 cases of hepatocellular carcinoma and 121 liver transplants compared with the Current Practice strategy. The number of cases averted varied over time for each age cohort (Fig. 2).

      Conclusions

      This cost-effectiveness analysis revealed that for current Medicaid beneficiaries, unrestricted access to hepatitis C treatment is cost saving compared with the current policy restricting treatment to only patients with advanced liver disease. The increased short-term costs of unrestricted access to care can be offset by savings from reduced complications in 9 to 16 years, depending on the treatment strategy and the age of the cohort. Furthermore, increased access to treatment could avert numerous future cases of hepatocellular carcinoma, reduce the need for liver transplantation, and prevent early mortality.
      We demonstrated that the Full-Access strategy led to long-term cost savings compared with the more restrictive Current Practice strategy. In fact, under ideal circumstances, the total savings could exceed $3.5 billion for the 450,000 Medicaid beneficiaries with hepatitis C. This is because under both strategies, all patients will ultimately be treated unless they decompensate or die before becoming eligible. An open- access strategy would lead to treatment earlier in the natural history of the disease, substantially reducing follow-up costs for patients with early-stage disease. This interpretation is supported by the results of our sensitivity analysis, which demonstrated that the Full-Access strategy is cost saving only if annual follow-up costs for early-stage patients exceed $600, meaning that it is economically advantageous to avert these costs. In addition, open access to treatment would reduce the number of early-stage patients who progress to advanced fibrosis or cirrhosis before being treated. This is important because even after successful treatment, patients with advanced disease still have high follow-up costs and a small risk of developing costly complications, while successfully treated early-stage patients have similar outcomes to their uninfected age-matched peers. Although the overall budget impact is considerable, we demonstrate that the cost to Medicaid of managing hepatitis C with interferon-free regimens is less than $5000 per capita annually regardless of treatment strategy. This is significantly less than the costs to Medicaid of managing many other major diseases, from respiratory illnesses ($8,100 per capita annually) to diabetes ($13,500 per capita annually) [

      Kaiser Family Foundation. The role of Medicaid for people with respiratory disease. 2012. Available from: https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8383_rd.pdf. [Accessed January 2, 2016].

      ,

      Kaiser Family Foundation. The role of Medicaid for people with diabetes. 2012. Available from: https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8383_d.pdf. [Accessed January 2, 2016].

      ].
      Our results were robust to variations in most model inputs. In sensitivity analyses, the Full-Access strategy was no longer cost saving for very high discount rates (≥5%) or very low follow-up costs for early-stage patients (<$600), both of which are unlikely. Cost-effectiveness guidelines suggest that a 3% discount rate is likely to be appropriate as the Office of Management and Budget recently suggested that a 3.4% nominal 30-year interest rate should be used for cost-effectiveness analyses [
      Office of Management and Budget. Appendix C. Discount Rates for Cost-Effectiveness, Lease Purchase, and Related Analyses. OMB Circular No. A-94. Revised December 2014 ed. Available from: http://www.whitehouse.gov/omb/circulars_a094/a94_appx-c/. [Accessed June 11, 2015]
      ,
      • Gold M.R.
      Cost-Effectiveness in Health and Medicine.
      ]. Similarly, most studies suggest that costs of follow-up for early-stage patients with hepatitis C are much higher than $600. Recently, the rate of hospitalizations for patients with early-stage and advanced hepatitis C has increased, which suggests that the costs of managing these patients are likely to be increasing as well [
      • Xu F.
      • Tong X.
      • Leidner A.J.
      Hospitalizations and costs associated with hepatitis C and advanced liver disease continue to increase.
      ].
      Because the assumptions made were generally biased against the Full-Access strategy, our estimates are likely to be conservative. The Full-Access strategy was cost saving even if there was no associated increase in treatment capacity. In reality, doubling the pool of eligible patients is likely to increase the absolute number of patients seeking treatment, bounded only by physician availability, patients’ knowledge of their disease status, and medical eligibility for treatment. Finally, we assumed that drug prices would be similar for Medicare and Medicaid. However, many state Medicaid programs are negotiating dramatic price discounts for hepatitis C treatment regimens, which could reduce the total cost of the Full-Access strategy [

      Loftus P. States work to strike deals for hep C drug discounts. Wall Street J.

      ]. Meanwhile, because the Medicare program cannot negotiate drug prices, the costs of waiting to treat patients after Medicare eligibility are likely to be higher than our estimates, which were based on Medicaid prices.
      Our results are consistent with those of recent studies evaluating the impact of novel interferon-free treatment regimens, demonstrating that novel interferon-free drug regimens are cost-effective for many patient subgroups [
      • Chhatwal J.
      • Kanwal F.
      • Roberts M.S.
      • et al.
      Cost-effectiveness and budget impact of hepatitis C virus treatment with sofosbuvir and ledipasvir in the United States.
      ,
      • Najafzadeh M.
      • Andersson K.
      • Shrank W.H.
      • et al.
      Cost-effectiveness of novel regimens for the treatment of hepatitis C virus.
      ]. One study in particular demonstrated that the SOF/LDV regimen could be cost saving compared with the previous standard of care if treatment was substantially discounted, but did not evaluate the effects of restrictive versus inclusive treatment strategies [
      • Najafzadeh M.
      • Andersson K.
      • Shrank W.H.
      • et al.
      Cost-effectiveness of novel regimens for the treatment of hepatitis C virus.
      ]. In addition, the results of our public health impact analysis are consistent with findings from Kabiri et al. [
      • Kabiri M.
      • Jazwinski A.B.
      • Roberts M.S.
      • et al.
      The changing burden of hepatitis C virus infection in the United States: model-based predictions.
      ], who also demonstrated that increased access to hepatitis C treatment could result in substantial long-term reductions in morbidity and mortality. This study addresses the dilemma of determining which patients with hepatitis C should be treated first, which has been highlighted in numerous recent editorials [
      • Haque M.
      • Zariat A.
      Treatment strategy for hepatitis C: a dilemma for the payers and the providers.
      ,
      • Etzion O.
      • Ghany M.G.
      A cure for the high cost of hepatitis C virus treatment.
      ,
      • Ghany M.G.
      The ongoing debate of who to treat for chronic hepatitis C virus.
      ]. Here, we offer empiric evidence to inform this debate and demonstrate that, from a government payer perspective, allowing access to treatment for early-stage patients may be the less costly and more effective long-term strategy.
      Our analysis is interesting in light of current events in public health. For example, the US Preventive Services Task Force recently recommended birth cohort screening for hepatitis C for adults born between 1945 and 1965 [
      U.S. Preventive Services Taskforce. Final Recommendation Statement: Hepatitis C: Screening. May 2015. Available from: http://www.uspreventiveservicestaskforce.org/Page/Document/RecommendationStatementFinal/hepatitis-c-screening. [Accessed July 15, 2015].
      ]. The analysis demonstrating that screening is cost-effective assumed that patients would be treated after disease was identified, albeit with older drug regimens [
      • Rein D.B.
      • Smith B.D.
      • Wittenborn J.S.
      • et al.
      The cost-effectiveness of birth-cohort screening for hepatitis C antibody in U.S. primary care settings.
      ]. It will become important to consider the ethical and economic implications if positive birth cohort screens are not paired with treatment initiation. In addition, although the prevalence is highest among patients aged 45 years and older, the incidence of hepatitis C has recently been rising at an alarming rate among younger injection drug users [
      • Zibbell J.E.
      • Iqbal K.
      • Patel R.C.
      Centers for Disease Control and Prevention. Increases in hepatitis C virus infection related to injection drug use among persons aged ≤30 years—Kentucky, Tennessee, Virginia, and West Virginia, 2006–2012.
      ]. Although our analysis focused on older cohorts, we demonstrate that Full Access is increasingly cost saving for younger patients, who would live with the disease for a longer period of time. Treating these patients while they have early-stage disease would reduce the high costs of disease management and potential complications that are likely to occur if treatment is deferred until disease progression. Treating younger patients may also curb the spread of the disease and reduce the duration of the epidemic.
      This study has some limitations that must be acknowledged. First, analytic methods that directly account for resource constraints may provide more precise estimates. However, because our assumptions biased the model against the Full-Access strategy, the conclusions are likely to be similar. Second, we estimated treatment efficacy using clinical trial data, which may overestimate real-word effectiveness. Third, some Medicaid managed care plans may receive smaller drug discounts than those mandated by the Medicaid drug rebate program. To account for this, we varied drug prices widely in sensitivity analysis. Finally, our model only included liver-related costs and did not account for potential increases in cumulative health care costs associated with reduced early mortality. This is beyond the scope of this analysis but is an interesting topic for future study.
      In conclusion, using cost-effectiveness analyses, we found that current Medicaid policies restricting hepatitis C treatment to patients with advanced disease are more costly and less effective than strategies with unrestricted access to treatment for patients with early-stage and advanced disease. Although our results provide empiric support for providing open access to treatment for hepatitis C, additional factors, including the size of the physician workforce and budgetary limitations, must also be considered. This study also highlights that in a multipayer health care system, efforts to minimize costs for individual payers can result in cost shifting and economic efficiency for the system as a whole. In light of this, collaborative efforts between state and federal payers may be needed to realize the full public health impact of recent advances in hepatitis C therapy.
      Source of financial support: A.P.C. was supported by the National Institutes of Health (grant no. TL1TR000145).

      Supplementary Materials

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