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New treatments for hepatitis C could boost federal spending for the Medicare Part D program by up to $5.8 billion in 2015 and lead to a 4.3%-8.6% premium increase for beneficiaries, according to a report by the actuarial firm Milliman, prepared for the Pharmaceutical Care Management Association.
Milliman examined the cost impact of sofosbuvir, marketed by Gilead Sciences as Sovaldi; the drug was approved by the Food and Drug Administration in December 2013 and carries an $84,000 price tag for a 12-week treatment regimen.
"Unlike some other high-cost specialty drugs, the new HCV [hepatitis C virus] drugs have a significant patient base, so their financial impact causes a meaningful and measurable increase in costs to beneficiaries and United States taxpayers," the report said. "No one knows for sure how many infected beneficiaries will ultimately receive the new treatment, but if for example, 50% of infected Medicare Part D beneficiaries were eventually treated with the $84,000 course of treatment, approximately $11 billion of new spending would enter the Part D system."
The report noted that hepatitis C is more prevalent among low-income individuals, placing an additional cost burden on the government, as these people are either covered by Medicaid or dually eligible for Medicare and Medicaid.
Milliman based its findings on the cost of taking sofosbuvir for 12 weeks, but noted that the "relative use pattern for these drugs is not well established." The analysis does not reflect any potential cost savings from reductions in other medical costs (such as treating chronic liver disease), which may result from using one of these new drugs.
New treatments for hepatitis C could boost federal spending for the Medicare Part D program by up to $5.8 billion in 2015 and lead to a 4.3%-8.6% premium increase for beneficiaries, according to a report by the actuarial firm Milliman, prepared for the Pharmaceutical Care Management Association.
Milliman examined the cost impact of sofosbuvir, marketed by Gilead Sciences as Sovaldi; the drug was approved by the Food and Drug Administration in December 2013 and carries an $84,000 price tag for a 12-week treatment regimen.
"Unlike some other high-cost specialty drugs, the new HCV [hepatitis C virus] drugs have a significant patient base, so their financial impact causes a meaningful and measurable increase in costs to beneficiaries and United States taxpayers," the report said. "No one knows for sure how many infected beneficiaries will ultimately receive the new treatment, but if for example, 50% of infected Medicare Part D beneficiaries were eventually treated with the $84,000 course of treatment, approximately $11 billion of new spending would enter the Part D system."
The report noted that hepatitis C is more prevalent among low-income individuals, placing an additional cost burden on the government, as these people are either covered by Medicaid or dually eligible for Medicare and Medicaid.
Milliman based its findings on the cost of taking sofosbuvir for 12 weeks, but noted that the "relative use pattern for these drugs is not well established." The analysis does not reflect any potential cost savings from reductions in other medical costs (such as treating chronic liver disease), which may result from using one of these new drugs.
New treatments for hepatitis C could boost federal spending for the Medicare Part D program by up to $5.8 billion in 2015 and lead to a 4.3%-8.6% premium increase for beneficiaries, according to a report by the actuarial firm Milliman, prepared for the Pharmaceutical Care Management Association.
Milliman examined the cost impact of sofosbuvir, marketed by Gilead Sciences as Sovaldi; the drug was approved by the Food and Drug Administration in December 2013 and carries an $84,000 price tag for a 12-week treatment regimen.
"Unlike some other high-cost specialty drugs, the new HCV [hepatitis C virus] drugs have a significant patient base, so their financial impact causes a meaningful and measurable increase in costs to beneficiaries and United States taxpayers," the report said. "No one knows for sure how many infected beneficiaries will ultimately receive the new treatment, but if for example, 50% of infected Medicare Part D beneficiaries were eventually treated with the $84,000 course of treatment, approximately $11 billion of new spending would enter the Part D system."
The report noted that hepatitis C is more prevalent among low-income individuals, placing an additional cost burden on the government, as these people are either covered by Medicaid or dually eligible for Medicare and Medicaid.
Milliman based its findings on the cost of taking sofosbuvir for 12 weeks, but noted that the "relative use pattern for these drugs is not well established." The analysis does not reflect any potential cost savings from reductions in other medical costs (such as treating chronic liver disease), which may result from using one of these new drugs.