Skip to main content

Hepatitis drugs save money in long run

By John Castellani
July 24, 2014 -- Updated 2108 GMT (0508 HKT)
A hepatitis C sufferer holds out his pills. The large one is Sovaldi, which costs $1,000 per pill but promises a hepatitis-free life.
A hepatitis C sufferer holds out his pills. The large one is Sovaldi, which costs $1,000 per pill but promises a hepatitis-free life.
STORY HIGHLIGHTS
  • John Castellani: New drugs give hope to 3 million Americans with hepatitis C
  • He says breakthrough similar to what retroviral drugs did for HIV/AIDS patients
  • Castellani: Critics say drugs' high price will raise health care costs, but that's short-term
  • He says drug will make costly health care interventions, like liver transplants, unnecessary

Editor's note: John J. Castellani is president and CEO of Pharmaceutical Research and Manufacturers of America, or PhRMA, a trade group that represents research-based pharmaceutical companies. The opinions expressed in this commentary are solely those of the writer.

(CNN) -- Imagine your doctor telling you there's nothing she can do, that your life has shifted, and you are headed to a lifetime full of painful treatments, possibly radical surgery, and even early death. That there's simply no prescription that can work.

Now imagine your doctor telling you that scientists have discovered a breakthrough, one that just might brighten the life you thought was headed into shadows, one that just might save your life.

John Castellani
John Castellani

This narrative, or one like it, is unfolding right now for the 3 million Americans -- and 175 million people all over the world -- with hepatitis C. The progress has been stunning, with new and forthcoming treatments now curing up to 90% of patients. In a health care climate mired in relentless, negative back-and-forth, it's encouraging to see what hard work can turn into for America's patients.

It's also an opportunity to learn from the recent past.

In the 1980s and early 1990s, HIV/AIDS was considered a death sentence. Doctors then had the task of telling their patients that nothing could be done. That early death was, in most cases, inevitable.

But for people all over the world with HIV/AIDS, the dawn of anti-retroviral medications in the mid-1990s transformed HIV/AIDS from near-certain death into a manageable chronic disease.

In the United States, the AIDS-related death rate has fallen by more than 80% since then, in large part because of advances in anti-retroviral therapy. Over the past 30 years, nearly 40 medicines have been approved to treat HIV/AIDS, and we now know that many of these medicines can also help prevent transmission of the disease as well.

Do you want hepatitis A with that burger?

The parallels between HIV/AIDS and hepatitis C are remarkable -- and a reason for optimism.

When HIV/AIDS was still considered a death sentence, some also claimed that treatments for it would bankrupt the health care system, as critics are claiming about the hepatitis C drug.But that did not happen. One reason is that cost containment is built into the system through the medicine life cycle. In its initial phases, innovator biopharmaceutical companies produce medical advances through pioneering scientific work and massive investments, like the $500 billion invested in research and development since 2000. After that, competition enters the market and lower-cost generics become available, helping achieve long-term savings.

2013: FDA approves breakthrough drug for treatment of hepatitis C

As a result of market dynamics and generic drug usage, the cost of medicines overall has grown more slowly in recent years than other health care costs, and makes up just 10% to 12% of total health care spending.The same can happen with treatments for hepatitis C, whose value becomes even more apparent when considering the cost consequences of not acting.

Although critics say the price of a promising new hepatitis C drug raises the cost of insurance, research from Milliman in 2009 projected that, without a cure for hepatitis C, annual U.S. medical costs associated with the disease will nearly triple over 20 years -- from $30 billion to $85 billion -- indicating that curing the disease can help reduce future medical costs.

Opinion: We all pay for $1,000 a pill drug

And recent projections show that the cost of curing hepatitis C patients will be far less than some have claimed. PricewaterhouseCoopers estimates that new medicines for hepatitis C will increase health care costs by just half a percent in 2014 and will level off after 2016 as patients are cured.

This is particularly noteworthy given that public discussions have focused almost exclusively on the price of new medicines while ignoring the tremendous societal benefits, including the potential to prevent even more expensive health care interventions such as liver transplant surgeries and related hospitalizations.

The finest biopharmaceutical research in the world helped wrestle HIV/AIDS down into a manageable disease. Now, it is giving us the same opportunity against hepatitis C -- and many more diseases.e need to move forward, and let the harrowing experience of HIV/AIDS patients inform our continued war against diseases like hepatitis C. And simple economics will remind us that, while investments at first may seem challenging, the prescription drug life cycle, market forces and tenacious global competition can lead to lower prices and broad access over time. behalf of America's hepatitis C patients, let's repeat that success once more.

Read CNNOpinion's new Flipboard magazine.

Follow us on Twitter @CNNOpinion.

Join us on Facebook.com/CNNOpinion.

ADVERTISEMENT
Part of complete coverage on
December 20, 2014 -- Updated 0242 GMT (1042 HKT)
Conservatives know easing the trade embargo with Cuba is good for America. They should just admit it, says Fareed Zakaria.
December 20, 2014 -- Updated 0112 GMT (0912 HKT)
We're a world away from Pakistan in geography, but not in sentiment, writes Donna Brazile.
December 19, 2014 -- Updated 1709 GMT (0109 HKT)
How about a world where we have murderers but no murders? The police still chase down criminals who commit murder, we have trials and justice is handed out...but no one dies.
December 18, 2014 -- Updated 2345 GMT (0745 HKT)
The U.S. must respond to North Korea's alleged hacking of Sony, says Christian Whiton. Failing to do so will only embolden it.
December 19, 2014 -- Updated 2134 GMT (0534 HKT)
President Obama has been flexing his executive muscles lately despite Democrat's losses, writes Gloria Borger
December 18, 2014 -- Updated 1951 GMT (0351 HKT)
Jeff Yang says the film industry's surrender will have lasting implications.
December 18, 2014 -- Updated 2113 GMT (0513 HKT)
Newt Gingrich: No one should underestimate the historic importance of the collapse of American defenses in the Sony Pictures attack.
December 10, 2014 -- Updated 1255 GMT (2055 HKT)
Dean Obeidallah asks how the genuine Stephen Colbert will do, compared to "Stephen Colbert"
December 18, 2014 -- Updated 1734 GMT (0134 HKT)
Some GOP politicians want drug tests for welfare recipients; Eric Liu says bailed-out execs should get equal treatment
December 18, 2014 -- Updated 1342 GMT (2142 HKT)
Louis Perez: Obama introduced a long-absent element of lucidity into U.S. policy on Cuba.
December 16, 2014 -- Updated 1740 GMT (0140 HKT)
The slaughter of more than 130 children by the Pakistani Taliban may prove as pivotal to Pakistan's security policy as the 9/11 attacks were for the U.S., says Peter Bergen.
December 17, 2014 -- Updated 1600 GMT (0000 HKT)
The Internet is an online extension of our own neighborhoods. It's time for us to take their protection just as seriously, says Arun Vishwanath.
December 16, 2014 -- Updated 2154 GMT (0554 HKT)
Gayle Lemmon says we must speak out for the right of children to education -- and peace
December 17, 2014 -- Updated 1023 GMT (1823 HKT)
Russia's economic woes just seem to be getting worse. How will President Vladimir Putin respond? Frida Ghitis gives her take.
December 17, 2014 -- Updated 0639 GMT (1439 HKT)
Australia has generally seen itself as detached from the threat of terrorism. The hostage incident this week may change that, writes Max Barry.
December 12, 2014 -- Updated 2020 GMT (0420 HKT)
Thomas Maier says the trove of letters the Kennedy family has tried to guard from public view gives insight into the Kennedy legacy and the history of era.
December 15, 2014 -- Updated 1456 GMT (2256 HKT)
Will Congress reform the CIA? It's probably best not to expect much from Washington. This is not the 1970s, and the chances for substantive reform are not good.
December 15, 2014 -- Updated 2101 GMT (0501 HKT)
From superstorms to droughts, not a week goes by without a major disruption somewhere in the U.S. But with the right planning, natural disasters don't have to be devastating.
December 15, 2014 -- Updated 1453 GMT (2253 HKT)
Would you rather be sexy or smart? Carol Costello says she hates this dumb question.
December 14, 2014 -- Updated 2253 GMT (0653 HKT)
A story about Pope Francis allegedly saying animals can go to heaven went viral late last week. The problem is that it wasn't true. Heidi Schlumpf looks at the discussion.
December 14, 2014 -- Updated 1550 GMT (2350 HKT)
Democratic leaders should wake up to the reality that the party's path to electoral power runs through the streets, where part of the party's base has been marching for months, says Errol Louis
December 13, 2014 -- Updated 2123 GMT (0523 HKT)
David Gergen: John Brennan deserves a national salute for his efforts to put the report about the CIA in perspective
December 12, 2014 -- Updated 1426 GMT (2226 HKT)
Anwar Sanders says that in some ways, cops and protesters are on the same side
December 11, 2014 -- Updated 1439 GMT (2239 HKT)
A view by Samir Naji, a Yemeni who was accused of serving in Osama bin Laden's security detail and imprisoned for nearly 13 years without charge in Guantanamo Bay
December 14, 2014 -- Updated 1738 GMT (0138 HKT)
S.E. Cupp asks: How much reality do you really want in your escapist TV fare?
ADVERTISEMENT