Putting a Value on Life: Is the new Hepatitis C drug worth the dollar?

Putting a Value on Life: Is the new Hepatitis C drug worth the dollar?

Is the new $1000 a pill Hepatitis C drug worth the dollar? It certainly makes us reconsider the value.

How much is a year of healthy life worth? Unfortunately, this isn’t a rhetorical question. I’m looking for concrete answer here. For a public health representative, this is a real question that needs to be dealt with every day.

How much is a year of healthy life worth?

The public health system is finite. Even the private health system is finite. There is a limit and someone, somewhere, has to decide where it is.

This is important to understand, so bear with me.

The Health System

Most countries around the world make an effort to care for the health of their population. Access to healthcare is a right that we have come to expect.

This healthcare, however, isn’t free. In fact, it can be quite expensive.

Wages of doctors and nurses and other health professionals. Surgery. Pharmaceutical products. It’s the actual medicines we are going to be focusing on in this article.

The way the public health system pays for these health expenditures is through public money – namely taxes. The more money there is in the public health fund, the better.

But there is always a limit. And a decision has to be made on how the limited supply of resources are best used.

Who deserves to get the healthcare available?

A very difficult question, indeed.

It was one of my least favourite things to study at university. Although it was much easier than learning about the pharmacology of each drug, the subject dedicated to “Quality Use of Medicines” made me uneasy. It was here we learnt how the health system decides where to spend the resources it has.

How much is a year of healthy life worth?

That is exactly what they do. They put a value on a year of healthy life.

Quantity of Life

Putting a value on LifeLet’s say a certain drug will decrease the risk of having a heart attack. No medicine can stop something with certainty, but reducing the risk is possible. On average, taking the drug might make someone live 7 years longer, as a result of avoiding a heart attack.

The cost of these 7 years is the cost of the medication for however many years they take it – usually for the rest of their life. The cost per year of healthy life is one-seventh of the total prescription cost from now until the age of average life expectancy. (For the health system, everything is calculated on averages and the best probability.)

Another example of risk to benefit decision making is tamoxifen, an anti-oestrogren drug that reduces breast cancer relapse. You can read about this here. 

What the health system deduces is “how much” healthy life a certain treatment is likely to give someone. They then measure it against the cost of the treatment, to determine if it is worth it.

Quality of Life

It is also important to consider quality of life.

The health system “calculates” life quality by assigning a quality score.

As an example, living with bad back pain can stop you doing things you would be able to do in its absence. They might assign a life quality score of 0.5 (for the simplicity of this article), which puts their quality of life at half that of a completely healthy person.

If there is a drug that can cease the back pain, putting their quality score back to 1, this vastly improves their overall health. If fact, 2 years in the absence of back pain, is equal to 1 year of extra life quantity. For anyone interested in the math: Life Quality (0.5) x Quantity (2 years) = Total Life Health (1 Year).

Taking everything into consideration, the health system needs to decide which treatment it can afford to give. It does this by offering the most affordable treatment for the amount of health – quality and quantity – it offers to someone.

In Australia, it is the Pharmaceutical Benefit Scheme (PBS) that makes this decision. When a new drug is released into the market, it applies to the PBS to be subsidised for the use of Australians. If it passes – if the cost to benefit is favourable – the population will only have to pay a fraction of the cost and the public health fund will pay the rest.

Of course, an individual can pay for a drug themselves if it is not considered essential and passed for subsidy by the health system.

But for a public limited health budget, decisions have to be made over which treatments are most beneficial considering the cost and the effect.

The Pharmaceutical Industry

Putting a value on LifeThe pharmaceutical industry is a business, which is at the heart of the whole problem. Whilst they portray an image of wanting to help others – and I hope that is their core desire – at the end of the day they need something to pay the bills, just like everyone else.

The business of drug discovery and development is uncertain. You could research a cure for a particular disease for decades, but never reach the point of making a product available to the public.

For this reason, when a product is shown to be safe and effective, the pharmaceutical companies need to make back their expenses through the years it took to research the drug. They also need to recuperate the money they spent researching medicines that haven’t become successful and to support future research. As a business, they also want to make a tidy profit.

Due to patent laws, pharmaceutical companies have a twenty-year window of time where competitors are not allowed to enter the market with the same pharmaceutical product. If people want access to the new drug, they must buy it from the company that discovered it. For this reason, the discovering company can charge higher prices; they control the market.

The pharmaceutical companies aren’t dull; they know how the health system works and they price accordingly. If they can discover something that will cure someone from a lifelong disease, the price of the drug will soar.

The reason is simple: it’s worth it. It can add years of healthy life to someone’s life.

From a public health perspective, the government will usually still subsidise it because it offers a substantial long-term benefit. If the company knows the government will subsidise it because it offers such a gain, the company will reap the rewards with a high-profit margin.

They understand the health system and manipulate their prices to reap the benefits.

Sovaldi, the New Hepatitis C Drug

Putting a value on LifeTo put this into perspective, we’re going to take a look at Sovaldi, a new drug marketed for Hepatitis C.

It costs a whopping $90,000 for the treatment, becoming to be known as the “$1000 a pill” drug.

In Australia, it has been approved for use and is being reviewed by the PBS in the coming weeks, who will determine if the public funding will subsidise Sovaldi for people suffering from Hepatitis C.

Let’s look at the case for Sovaldi.

Hepatitis C

Hepatitis C is a liver disease caused a virus, most commonly transmitted through unsafe injection practices (injected drug use). Once infected, some people will spontaneously resolve the infection without treatment but the majority will be affected for the duration of their life, which can then lead to cirrhosis and liver failure. In some cases, liver transplantation is required. This can cost around $200,000.

It’s not uncommon. An estimated 150 million people are infected with hepatitis C in the world today and the disease causes up to 500,000 deaths each year.

Unfortunately, there is no vaccination to prevent hepatitis C is available, so everything possible must be done to avoid transmission of the infection.

[World Health Organisation: Hepatitis C Factsheet] [Hepatitis NSW: Liver Transplant]

Available Treatments

For someone with a chronic hepatitis C infection, the outlook can be pretty grim.

The potential effects are life threatening and the available treatments, interferon and ribavirin, don’t offer much hope.

Firstly, the actual treatment is difficult. It lasts from 6 months to a year, depending on what genotype of virus you have. For the entire duration, you need to get an injection that can hit you like a debilitating flu, as well as taking oral tablets twice every day.

Then there’s other side effects, too. There can be nausea, diarrhoea, fatigue and flu-like symptoms – common side effects of many medications. But there can also be more serious bone marrow suppression (affecting cell production), thyroid dysfunction and psychiatric effects, such as depression, anger, sleep disturbances and psychosis.

Most importantly, after all this it might not even work. Only around 50% of treatments are successful.

They are expensive, uncomfortable and may not work.

The New Hepatitis C Drug: What Sovaldi Offers

It didn’t take much to beat the competition when Solvaldi came waltzing in.

For one thing, it works. Rather than failing half of treatments, Sovaldi is 84-96% effective.

On top of that, the side effects are much more manageable, with headache and tiredness being the main concerns.

And for some genotypes, you don’t need weekly injections, just oral medications – a definite bonus of convenience.

It’s undeniable: Sovaldi is useful and offers something great to those affected by Hepatitis C.

The problem is, given the price some people may not be able to have access to it. It’s a lot of money and someone has to pay it. It’s running through the PBS at this moment, who will decide if the Australian government can subsidise it for people suffering from Hepatitis C.

The truth of the matter in that the pharmaceutical companies have the power to manipulate the situation.

Sovaldi doesn’t cost anywhere near $90,000 to actually make. Even the research over the years doesn’t a justify a price like that.

But it’s valuable. It’s useful. It works.

Most importantly, they know we need it. So they ask for exuberant prices. Take it, or leave it.

As a business, they ask the price they believe people will pay.

It is the system that is wrong. If we have a cure, it should be made available. Success should be secondary to health.

Alas, this isn’t the way the world works.

We’ll have to wait and see if the PBS approves Sovaldi to be subsidised in Australia.

It’s a delicate situation, and not one I like to think about. These companies are playing with the health of the population for a monetary gain. It’s no secret but it is ugly, nonetheless.

What do you think about the situation? Do you think the pharmaceutical companies are justified in asking that much money for a pharmaceutical treatment? 

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How much is a drug worth? Here's how the health system works it out.

Putting a Value on Life: Is the new Hepatitis C drug worth the dollar?

Is $1000 a pill too expensive for Sovaldi, the new Hepatitis C medication?

About the author


Yolanda is a passionate medical writer who loves to help people understand how health and different treatments work. After graduating in Pharmacy in Australia, she moved to Italy to study the Mediterranean way of life and continue learning about health and medicine.

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