Cost-Effectiveness Studies of New Hepatitis C Treatments

Cost-Effectiveness Studies of New Hepatitis C
Treatments

EXECUTIVE SUMMARY

                                                                  Background
Chronic hepatitis C virus (HCV) is a common infection that is a major cause of chronic liver disease,
cirrhosis, and hepatocellular cancer. Newly developed drugs have revolutionized the treatment of
hepatitis C and are both more effective and have fewer treatment-related adverse effects. However,
concern has been raised about the high cost of these new agents.

                                                                   Objectives

To evaluate current published health economic evaluations of the newest hepatitis C treatments
sofosbuvir and simeprevir, focusing on:
          The structure and perspective of the relevant studies
          Important parameters and assumptions of these studies
          Central results of the studies
          Interpretation of study findings
          Future research needs in economic studies

                                                               Search Strategy

We searched MEDLINE (via PubMed) through November 2014, using the following search terms:
(sofosbuvir OR simeprevir) AND “cost-effectiveness.”

                                                              Selection Criteria

Studies identified by this search were examined and selected if they included an economic evaluation of
sofosbuvir or simeprevir for treatment of hepatitis C and measured both economic and health outcomes.
                                                                  1-3
We identified 3 studies published in the peer-reviewed literature. An economic evaluation from the
                                                                             4
California Technology Assessment Forum (CTAF) also met selection criteria.

                                                                 Main Results
The CTAF economic evaluation estimates the costs and health effects of HCV treatment in 12 different
                                                                                        4
patient groups defined by genotype, interferon eligibility, and prior treatment history. For each patient
group, sofosbuvir- and/or simeprevir-based treatments were compared with the best prior standard
treatment. In this analysis, health effects are only counted in terms of treatment success, rather than
increase in quantity and/or quality of life. This type of analysis precludes evaluation of hepatitis C
treatments in relation to other commonly accepted medical treatments. Results were presented in terms
of costs per treatment success (defined as sustained virologic response). Future costs averted due to
successful treatment were presented separately as cost offsets, and, in at least 1 treatment scenario,
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encourages, or discourages any particular treatment, procedure, or service; any particular course of treatment, procedure, or service; or the payment
or nonpayment of the technology or technologies evaluated.

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TEC SPECIAL REPORT
Cost-Effectiveness Studies of New Hepatitis C Treatments



showed net cost savings at 20 years. We identified several problems in the values and modeling
technique used for calculating cost offsets, all of which result in overestimation of cost offsets for all the
patient groups evaluated.
A study by Petta et al, estimates the costs and health effects for a single treatment scenario: sofosbuvir-
based combination treatment in HCV genotype 1, treatment-naive, interferon-eligible patients compared
                         1
with standard treatment. The analysis incorporates the perspective of the Italian health care system. In
this analysis, treatment health effects are translated into increases in quantity and/or quality of life.
Results showing costs below $33,333 per life-year gained were considered to meet willingness-to-pay
thresholds and deemed cost-effective. The overall base case estimate for sofosbuvir-based treatment
versus telaprevir-based treatment was $33,005 per life-year gained, which met the threshold. Results for
different subgroups varied, and were inconsistent with the overall base case estimate.
A study by Leleu et al estimates the costs and health effects for several treatment scenarios simulating
                                           2
the spectrum of HCV disease in France. Each scenario compares sofosbuvir-based combination
treatment with the appropriate comparator for each type of patient. The analysis incorporates the
perspective of the French health care system. In this analysis, treatment health effects are translated into
increases in quantity and/or in quality of life. The overall base case estimate for sofosbuvir-based
treatment versus the appropriate comparator was $21,704 per quality-adjusted life-year (QALY) saved.
Cost-effectiveness ratios varied greatly across liver fibrosis categories, with lower ratios for more severe
disease. The model assumed that 40% to 50% of subjects would have cirrhosis, and several
characteristics of the base case were not specified.
 A study by Saab et al estimates the costs and health effects for treatment-naive, treatment-naive HIV-
                                                                       3
coinfected, and treatment-experienced patients with HCV genotype 1. The analysis incorporates the
perspective of the U.S. health care system. In this analysis, treatment health effects are translated into
increases in QALYs. In almost all patient groups, sofosbuvir-based combination treatment was a
dominant strategy over either telaprevir- or boceprevir-based combination treatments, meaning that it was
both less expensive and produced better health outcomes.

                                                Author Conclusions and Comment
The studies have significant limitations and limited value in assessing the health and economic effects of
sofosbuvir and simeprevir in the U.S. health care system. The CTAF analysis measures outcomes as
treatment success and is not easily compared with the other studies. Among the 3 studies that translate
health outcomes into life-years or QALYs gained, all 3 studies found that sofosbuvir-based treatment was
either cost-effective or cost-saving compared with comparator treatments. However, we identified several
methodologic problems in each study, making the conclusions suspect. The studies by Leleu et al and
Saab et al were funded by the manufacturer of sofosbuvir. We also identified several aspects of economic
evaluations that should be addressed in future research to make such studies more relevant to health
policy.

                                                                  References
1.   Petta S, Cabibbo G, Enea M, et al. Cost-effectiveness of sofosbuvir-based triple therapy for untreated patients
     with genotype 1 chronic hepatitis C. Hepatology. May 2014;59(5):1692-1705. PMID 24691835
2.   Leleu H, Blachier M, Rosa I. Cost-effectiveness of sofosbuvir in the treatment of patients with hepatitis C. J Viral
     Hepat. Sep 15 2014. PMID 25219291
3.   Saab S, Gordon SC, Park H, et al. Cost-effectiveness analysis of sofosbuvir plus peginterferon/ribavirin in the
     treatment of chronic hepatitis C virus genotype 1 infection. Aliment Pharmacol Ther. Sep 2014;40(6):657-675.
     PMID 25065960
4.   Tice JA, Ollendorf DA, Pearson SD. The comparative clinical effectiveness and value of simeprevir and
     sofosbuvir in the treatment of chronic hepatitis C infection2014.



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TEC SPECIAL REPORT
Cost-Effectiveness Studies of New Hepatitis C Treatments



AUTHORS, STAFF, AND MEDICAL ADVISORY PANEL
TEC Staff Contributors
Lead Author: David H. Mark, M.D., M.P.H.
Executive Director, Center for Clinical Effectiveness: Suzanne E. Belinson, Ph.D., M.P.H.
Executive Director, Clinical Evaluation, Innovation, and Policy: Naomi Aronson, Ph.D.
Director, Technology Assessment: Mark D. Grant, M.D., Ph.D.
Research/Editorial Staff: Claudia Bonnell, R.N., M.L.S., Kimberly Hines, M.S., Michael Vasko, M.A.
Blue Cross Blue Shield Association Medical Advisory Panel
Chair
Trent T. Haywood, M.D., J.D., Senior Vice President, Clinical Affairs/Medical Director, Blue Cross Blue Shield Association

Vice Chair
Suzanne E. Belinson, Ph.D., M.P.H., Executive Director, Center for Clinical Effectiveness, Blue Cross Blue Shield Association

Scientific Advisors
Steven N. Goodman, M.D., M.H.S., Ph.D., Dean for Clinical and Translational Research, Stanford University School of Medicine, and
   Professor, Departments of Medicine, Health Research and Policy
Mark A. Hlatky, M.D., Professor of Health Research and Policy and of Medicine (Cardiovascular Medicine), Stanford University School of
   Medicine; American College of Cardiology Appointee

Panel Members
Peter C. Albertsen, M.D., Professor, Chief of Urology, and Residency Program Director, University of Connecticut Health Center
Ann Boynton, Deputy Executive Officer, Benefits Programs Policy and Planning, CalPERS
Virginia Calega, M.D., M.B.A., F.A.C.P., Vice President, Medical Management and Policy, Highmark Inc.
Sarah T. Corley, M.D., F.A.C.P., Chief Medical Officer, NextGen Healthcare Information Systems Inc.; American College of Physicians
    Appointee
Helen Darling, M.A., Strategic Advisor, National Business Group on Health
Josef E. Fischer, M.D., F.A.C.S., William V. McDermott Professor of Surgery, Harvard Medical School; American College of Surgeons
    Appointee
Lee A. Fleisher, M.D., Professor and Chair, Department of Anesthesiology and Critical Care, University of Pennsylvania Perelman School of
    Medicine; Senior Fellow, Leonard Davis Institute of Health Economics
I. Craig Henderson, M.D., Adjunct Professor of Medicine, University of California, San Francisco
Jo Carol Hiatt, M.D., M.B.A., F.A.C.S., Chair, Inter-Regional New Technology Committee, Kaiser Permanente
Saira A. Jan, M.S., Pharm.D., Associate Clinical Professor, Ernest Mario School of Pharmacy, Rutgers, The State University of New Jersey;
    Residency Director and Director of Clinical Programs Pharmacy Management, Horizon Blue Cross and Blue Shield of New Jersey
Lawrence Hong Lee, M.D., M.B.A., F.A.C.P., Vice President and Executive Medical Director for Quality and Provider Relations, Blue Cross
    and Blue Shield of Minnesota
Bernard Lo, M.D., President, The Greenwall Foundation
Randall E. Marcus, M.D., Charles H. Herndon Professor and Chairman, Department of Orthopaedics, Case Western Reserve University
    School of Medicine and University Hospitals Case Medical Center, Cleveland, Ohio
Barbara J. McNeil, M.D., Ph.D., Ridley Watts Professor and Head, Department of Health Care Policy, Harvard Medical School; Professor of
    Radiology, Brigham and Women's Hospital
William R. Phillips, M.D., M.P.H., T.J. Phillips Endowed Professor in Family Medicine, University of Washington; American Academy of
    Family Physicians Appointee
Rita F. Redberg, M.D., M.Sc., F.A.C.C., Professor of Medicine and Director, Women's Cardiovascular Services, University of California San
    Francisco
Maren T. Scheuner, M.D., M.P.H., F.A.C.M.G., Chief, Medical Genetics, VA Greater Los Angeles Healthcare System; Professor,
    Department of Medicine, David Geffen School of Medicine at UCLA; Affiliate Natural Scientist, RAND Corporation; American College of
    Medical Genetics and Genomics Appointee
Leslie Robert Schlaegel, M.S., Associate Vice President of Human Resources, Stanford University
J. Sanford Schwartz, M.D., F.A.C.P., Leon Hess Professor of Medicine and Health Management & Economics, School of Medicine and The
    Wharton School, University of Pennsylvania
John B. Watkins, Pharm.D., M.P.H., B.C.P.S., Pharmacy Manager, Formulary Development, Premera Blue Cross




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TEC SPECIAL REPORT
Cost-Effectiveness Studies of New Hepatitis C Treatments




Cost-Effectiveness Studies of New Hepatitis C
Treatments
ASSESSMENT OBJECTIVE
Chronic hepatitis C virus (HCV) is a common infection that is a major cause of chronic liver disease,
cirrhosis, and hepatocellular cancer. Newly developed drugs have revolutionized the treatment of
hepatitis C and are both more effective and have fewer treatment-related side effects. However, concern
has been raised about the high cost of these new agents. Although the consequences of chronic hepatitis
C infection can be severe, most patients with infection are asymptomatic and the consequences of the
infection are years in the future. Because of the cost of new treatments and the potentially large number
of persons eligible to receive them, the economics of these new drugs have been the subject of
considerable controversy.
This Special Report evaluates current published health economic evaluations of the newest hepatitis C
treatments sofosbuvir and simeprevir, focusing on:
          The structure and perspective of the relevant studies
          Important parameters and assumptions of these studies
          Central results of the studies
          Interpretation of study findings
          Future research needs in health economic studies

BACKGROUND

                                                                     Disease
The HCV virus is transmitted by blood-borne exposure and the principal risk factor is intravenous drug
use. Before universal blood screening, blood transfusion was also a common cause of HCV infection. It is
unclear whether HCV can be transmitted through sexual contact; if it is, the risk is thought to be very low.
Only 20% to 30% persons infected with HCV will become symptomatic. Long-term consequences of HCV
may occur in persons who develop chronic infection; 75% to 85% of infected persons will remain
chronically infected.
It is estimated that there are 3.2 million persons with chronic HCV infection in the United States. Based on
a synthesis of studies, Holmberg et al (2013) estimated that of those 3.2 million persons, 1.6 have been
diagnosed, 1 to 1.2 million have been referred to care, 220,000 to 360,000 have been treated, and
                                                       1
170,000 to 200,000 have been successfully treated.
Chronic HCV infection progresses slowly, with only a minority of patients progressing to liver cirrhosis
over many years. In a review by Freeman et al (2001), depending on the type of subjects enrolled in the
                                                                                                 2
study, the proportion of patients progressing to cirrhosis over 20 years varied from 4% to 24%. Factors
that were associated with more rapid disease progression included older age at HCV infection, male
gender, and heavy alcohol intake. The staging of HCV infection is assessed and classified by liver biopsy.
The Metavir score assesses both fibrosis (F0-F4) and inflammation activity (A0-A3). Another staging
instrument commonly used is the Ishak scale, which ranges from 1 (no fibrosis) to 6 (cirrhosis).
There are 3 predominant genotypes of HCV infection in the United States. The most common is genotype

                                           Abbreviations and Acronyms
CTAF          California Technology Assessment Forum         QALY                                    quality-adjusted life-year
FDA           Food and Drug Administration                   RBV                                     ribavirin
HCV           hepatitis C virus                              SVR                                     sustained virologic response
pegIFN        pegylated interferon

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                                                                                                     3
1 (70%-75%), followed by genotype 2 (13%-17%), and genotype 3 (8%-12%). Standard treatment for
HCV infection varies by genotype, prior treatment history, and other patient factors. The response to
treatment of both standard and novel drugs has been shown to vary by genotype and these other factors.

                                                                   Treatment
Prior to the development of protease inhibitors, the primary treatment for HCV was pegylated interferon
plus ribavirin (pegIFN/RBV). In clinical trials, a sustained virologic response (SVR) to this treatment for
                                                                      4
patients with HCV genotype 1 (HCV-1) ranged from 40% to 50%. SVR has become the standard metric
for reporting HCV treatment outcomes. SVR measured at some point after treatment has been
demonstrated to strongly predict long-term cure of HCV infection. However, outside clinical trials,
                                                                                                        5
observed response rates have been much lower, possibly due to low rates of treatment completion. The
response rate to pegIFN/RBV of patients with genotypes 2 and 3 is much higher than genotype 1, in the
range of 75% to 85% in clinical trials. PegIFN is an injectable medication that commonly causes fatigue,
headache, and fever. Other adverse effects include anemia, pruritus, and psychiatric symptoms.
First-generation protease inhibitors, boceprevir and telaprevir, were approved by the U.S. Food and Drug
Administration (FDA) in 2011 for treatment of patients with HCV-1. Treatment with boceprevir or telaprevir
in combination with pegIFN/RBV resulted in SVR rates up to 65% to 75%, which were superior to
                                                                   6-8
pegIFN/RBV alone in head-to-head randomized controlled trials. However, disadvantages of treatment
with boceprevir and telaprevir include a significant burden of treatment in terms of large pill burden at
precisely spaced and frequent time intervals. The adverse effects associated with pegIFN/RBV increase
with the addition of these drugs.
The newest generation drugs, simeprevir and sofosbuvir, were approved by FDA in 2013. These drugs
reduce the pill burden to a single tablet per day, have reduced adverse effects compared with boceprevir
and telaprevir, and have higher SVR rates. Several clinical trials evaluating simeprevir plus pegIFN/RBV
                                                                                     9,10
versus pegIFN/RBV alone in patients with HCV-1 have shown superior SVR rates.             The clinical trials of
sofosbuvir are more varied in the types of patients enrolled (eg, genotype, prior treatment history), and
many trials had no control group. However, the SVR rates to treatment have all been higher than the SVR
                                                              11-13
rates historically associated with prior standard treatments.

                                                            Practice Guidelines
Recent American Association for the Study of Liver Diseases guidelines recommend inclusion of
sofosbuvir in a first-line treatment regimen for every category of patient (defined by genotype, treatment
                          14
history, IFN eligibility). Simeprevir is recommended as a first-line treatment only for a few categories of
patients with HCV-1 (treatment-naive IFN-ineligible, prior treatment failure regardless of IFN eligibility,
both regimens in combination with sofosbuvir) and as an alternative regimen in patients with HCV-1 who
are eligible to receive IFN. Regimens with telaprevir or boceprevir are specifically not recommended for
any category of patient.
The guidelines mention limitations of workforce and societal resources in providing treatment to all HCV-
infected patients, but do not specify who should or should not be treated. The guidelines identify
categories of patients who should have higher priority for treatment. Patients with advanced fibrosis
(Metavir F3), compensated cirrhosis (Metavir F4), and patients with severe extrahepatic manifestations of
HCV (eg, cryoglobulinemia, proteinuria, nephrotic syndrome) should have highest priority for treatment.
Other patients at high risk for complications, such as those with fibrosis (Metavir F2), HIV coinfection, or
debilitating fatigue, received the next highest priority for treatment.

                             Fundamentals of Economic Evaluation of Novel Treatments
A new treatment that is more expensive than an existing treatment, particularly for a common condition
such as HCV, can raise concerns from the patients, payers, and governmental entities that finance and
pay for health care services. The introduction and diffusion of a novel expensive treatment will have


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TEC SPECIAL REPORT
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differing economic impact on various stakeholders in the health care system. For this reason, it is often
difficult to analyze and compare different economic evaluations of a particular clinical problem.
It is beyond the scope of this Special Report to describe the full spectrum of economic evaluations of
health care interventions. However, the goal of certain types of evaluation is to attempt to assess the
“value” of the novel treatment, ie, the value of the new treatment in terms of its health benefits relative to
its cost. Using the scenario of the new HCV treatments sofosbuvir and simeprevir, we will attempt to
                                                                             15
illuminate some fundamental principles of this type of economic evaluation of novel health care
interventions. The economic studies of sofosbuvir and simeprevir will be evaluated according to these
principles.

Novel Treatment and Comparator

Sofosbuvir and simeprevir are novel treatments for HCV. Accordingly, it is important to define the
treatment(s) to which these novel treatments are being compared. For HCV, the comparator differs based
on the genotype and other patient characteristics. Analysis depends as much on the comparator
treatment as it does on the novel treatment.
In general, the results of an economic evaluation hinge on the difference in treatment efficacy and costs
between the novel and comparison treatment, rather than the absolute values of treatment efficacy and
cost. For example, a difference in treatment efficacy between a novel and a comparator treatment of 5%
will generally produce a similar result in any economic evaluation, regardless of where in the range the
5% difference falls—whether it is between 20% and 25% or 80% and 85%. The larger the improvement in
treatment efficacy attributable to the novel treatment, the more favorable the economic evaluation should
be toward the novel treatment.
In the case of HCV treatment, the difference in treatment efficacy between 2 specific treatments often
varies by patient characteristics, and thus the analysis will show a different result for different subgroups
of patients. For example, Table 1 displays the treatment efficacy parameters for sofosbuvir and telaprevir
                                                                                16
as reported in 2 of the studies we included in this Special Report. Petta et al assumed a greater SVR
                                                                                        17
difference between the 2 drugs than the California Technology Assessment Forum (CTAF) analysis
(14% vs 9%). If all else was similar between the studies, the Petta et al analysis would show a more
favorable result for sofosbuvir.
Similarly, the difference in costs between the novel and comparator treatments is the critical issue in the
analysis, rather than the absolute cost. The greater the difference in the cost between the novel and the
comparator treatments, the greater the impact on the analysis. Table 1 also shows the cost estimates
used for sofosbuvir and telaprevir in the 2 studies. Although the absolute cost values differ, the difference
between sofosbuvir and telaprevir within each study is similar. (However, subtraction of the 2 values is
not quite an accurate measure of the difference in treatment cost due to differences in length of treatment
and other costs associated with each drug regimen.)

Table 1: Comparison of Some Critical Study Parameters for Analysis in the CTAF and Petta et al
Studies for Similar Patient Scenarios in Analysis
                                                   17                                  16
       Study Parameter                        CTAF                         Petta et al
Sofosbuvir SVR in base case, %                             83                                         89
Telaprevir SVR in base case, %                             74                                         75
SVR difference, %                                           9                                         14
Weekly cost sofosbuvir, $U.S.                             7000                                       4667
Weekly cost telaprevir, $U.S.                             4920                                       2777
Euro values in Petta et al converted into dollars using €0.75 = $1 U.S.
CTAF: California Technology Assessment Forum; SVR: sustained virologic response.




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Cost-Effectiveness Studies of New Hepatitis C Treatments



Costs

The types of costs included in the analysis will influence the results. In general, the costs of the novel and
the comparator treatments are always included, as are additional costs generated during treatment due to
concomitant treatment and adverse effects. For the typical economic study, which includes a longitudinal
perspective, the improvement in health outcomes caused by the better treatment should result in reduced
future health costs due to eliminating or reducing costs associated with treating the disease. For patients
with HCV, curing the infection should reduce or eliminate the risk of progression of liver disease, cirrhosis,
and liver cancer. Future costs are generally discounted at some specific amount, typically 3%. This
discounting converts the future costs into present-value costs, which can then be directly compared with
the costs of the initial HCV treatment. All costs also are defined from a specific economic perspective,
such as payer type, and assigned values consistent with that particular perspective. The estimate of
these future costs is complex due to the need to integrate information on natural history, prognosis, and
health care costs from often less than ideal data sources. Direct measurement of these costs from
randomized controlled trials is rarely available and often limited to a relatively short future time horizon.

Health Outcomes

The health improvement associated with novel treatments may be accounted for in different ways. We will
discuss the method of assessing health outcomes in the context of each of the studies we reviewed in
this Report.

                                                                  FDA Status
On May 13, 2011, boceprevir was approved by FDA for the treatment of chronic hepatitis C genotype 1
infection, in combination with pegIFN-/RBV, in adult patients, 18 years of age and older, with
compensated liver disease, including cirrhosis, who are previously untreated or who have failed previous
IFN and RBV therapy.
On May 23, 2011, telaprevir was approved by FDA for use in combination with pegIFN-/RBV, for the
treatment of chronic hepatitis C genotype 1 infection in adult patients with compensated liver disease,
including cirrhosis, who are treatment-naive or who have been previously treated, including prior null
responders, partial responders, and relapsers.
On November 22, 2013, simeprevir was approved by FDA for use as a component of a combination
antiviral regimen for the treatment of chronic hepatitis C infection.
On December 6, 2013, sofosbuvir was approved by FDA for use as a component of a combination
antiviral regimen for the treatment of chronic hepatitis C infection.
METHODS

                                                               Search Strategy
We searched MEDLINE (via PubMed) through November 2014, using the following search terms:
(sofosbuvir OR simeprevir) AND “cost-effectiveness.”

                                                               Study Selection
Studies identified by this search were examined and selected if they included an economic evaluation of
sofosbuvir or simeprevir treatment for hepatitis C and measured both economic and health outcomes. We
                                                               16,18,19
identified 3 studies published in the peer-reviewed literature.         An economic evaluation of hepatitis
                                                                                                         17
treatment completed by the Institute for Clinical and Economic Review performed on behalf of CTAF.
This analysis also met selection criteria. This Special Report evaluates these 4 studies.




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                                                   Medical Advisory Panel Review
This Special Report was reviewed by the Blue Cross and Blue Shield Association Medical Advisory Panel
(MAP) on September 18, 2014. To maintain the timeliness of the scientific information in this Report,
literature search updates were performed subsequent to the Panel's review (see Search Strategy section
above). If the search updates identified any additional studies that met the criteria for detailed review, the
results of these studies were included in the tables and text where appropriate. Following the meeting, a
search through November 2014 identified 2 additional studies that were included in this Special Report.
FORMULATION OF THE ASSESSMENT
We reviewed the selected studies to identify the scope of each, the structure of the analysis, and certain
key assumptions of the analytic model. Because the studies vary in the health outcome metrics used, we
describe and discuss the implications of the difference. The overall base case results or a representative
set of results are presented and explained. We then discuss particular aspects of each analysis that are
potentially problematic in terms of the validity, generalizability, or applicability of the analysis. We
identified these points based on our knowledge of health economic evaluations and quantitative modeling
of health outcomes, and consideration of the impact of the problem on the study results. A
comprehensive critique of all the analytic assumptions and parameter estimates used in each study is
beyond the scope of this Special Report.
REVIEW OF EVIDENCE

                                                          CTAF Economic Study
                                          17
The CTAF economic analysis was part of a technology assessment performed by the Institute for
Clinical and Economic Review on behalf of CTAF. CTAF commissions evidence reports on a broad
variety of topics to improve the quality and value of health care. The report, which also reviewed the
evidence on clinical efficacy of sofosbuvir and simeprevir, attempted a comparative effectiveness analysis
of hepatitis C treatments using network analysis methods.

Scope of Study

The CTAF report evaluated several treatment comparisons in HCV patients defined by genotype, prior
treatment experience, and IFN eligibility. The report examined all combinations of genotypes (1, 2, 3),
treatment experience (naive vs experienced), and IFN eligibility (yes vs no), evaluating a total of 12
patient groups. Within these patient groups, secondary cost and outcomes analyses were conducted
among patients with different stages of liver disease, either none-to-mild liver disease (Metavir F0-F2) or
advanced liver disease (Metavir F3-F4).
In each of the 12 patient groups analyzed, the costs and outcomes of sofosbuvir or simeprevir (and, for
some groups, combination therapy with sofosbuvir and simeprevir) were compared with best prior
standard therapy. For all IFN-ineligible groups, the comparator was no treatment. For all IFN-eligible
groups with HCV-2 or -3, the comparator was 24 weeks of pegIFN/RBV. For patients with HCV-1 who
were IFN-eligible, the comparator was telaprevir plus pegIFN/RBV. Table 2 shows the scope of the CTAF
analysis with the SVR rate parameter used.

Table 2: Treatment Groups Analyzed in CTAF Report by Genotype, Prior Treatment Status, and
IFN Eligibility, With Treatment and Control Percent SVR Used in the Analysis Model
 Prior Treatment                  Genotype 1                 SVR, %           Genotype 2             SVR, %     Genotype 3         SVR, %
Treatment-naive
IFN eligible              C: TEL + pegIFN/RBV                    74        C: pegIFN/RBV               78     C: pegIFN/RBV             62
                          T: SIM + pegIFN/RBV                    84        T: SOF + RBV                97     T: SOF + RBV              93
                          T: SOF + pegIFN/RBV                    83
IFN ineligible            C: no treatment                        0         C: no treatment             0      C: no treatment           0
                          T: SOF + RBV                           72        T: SOF + RBV                93     T: SOF + RBV              63
                          T: SOF + SIM                           90
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Treatment-experienced
IFN eligible         C: TEL + pegIFN/RBV           70     C: pegIFN/RBV          71       C: pegIFN/RBV         51
                     T: SIM + pegIFN/RBV           70     T: SOF + RBV           88       T: SOF + RBV          77
                     T: SOF + pegIFN/RBV           71
                     T: SOF + SIM + RBV            90
IFN ineligible       C: no treatment               0      C: no treatment        0        C: no treatment        0
                     T: SOF + RBV                  61     T: SOF + RBV           88       T: SOF + RBV          63
                     T: SOF + SIM + RBV            90
C: control treatment; CTAF: California Technology Assessment Forum; IFN: interferon; pegIFN: pegylated interferon;
RBV: ribavirin; SIM: simeprevir; SOF: sofosbuvir; SVR: sustained virologic response; T: treatment; TEL: telaprevir.

Structure of Analysis

Health Outcome
In the type of evaluation referred to as cost-effectiveness analysis in most of the health care literature, the
benefits of treatment are translated into an increase in life expectancy, which is also typically adjusted for
quality of life. This adjustment for quality of life allows for comparison between treatments that may vary in
relative benefit of quality and quantity of life. Translating the benefits of treatment into a measure of
quality-adjusted life extension allows for comparison of the disease being analyzed with other diseases;
for example, to compare treatment for hepatitis C with colon cancer screening. Novel treatments, which
have been estimated to show cost-effectiveness values of $25,000 to $50,000 per quality-adjusted life-
years (QALYs), have often been declared to be cost-effective.
The CTAF analysis takes a different approach from that outlined above. Instead of evaluating the
increase in life expectancy due to HCV treatment, the results are presented in terms of the additional
numbers of patients with SVR given the novel treatment compared with the standard treatment. Use of
this outcome may be useful when comparing treatment strategies in which SVR is the sole outcome, and
the value of SVR is uniform. However, in the context of HCV, this assumption is violated, because the
health benefit of curing HCV is greater for persons at later stages of disease. Over 2 time horizons, 5
years and 20 years, the number of patients with liver complications averted is estimated, and the dollars
saved by preventing that number of liver complications is presented as a cost “offset” to the increased
costs of treatment with the novel drug. Lower expenses due to reduced medical costs of patients with
SVR independent of liver complications also contribute to the cost offset. Although a higher SVR and
avoidance of liver complications should lead to greater life expectancy, the analysis stops short of this
calculation. The analysis allows a calculation of “cost per additional SVR,” and provides other estimates
that might allow a calculation of a “cost per liver complication avoided.”
Other Key Assumptions of Analysis
Although economic simulation analyses such as the CTAF analysis have a large number of model
assumptions and parameter estimates, it is important to note a few of the more critical assumptions and
the potential effects they have on the analysis.
The CTAF analysis assumes no mortality over the 5- and 20-year time horizons. Patients are assumed to
survive for the entire 20-year time horizon of the study and to accumulate costs of care due to HCV
infection either with or without liver complications. This assumption not only precludes any ability to
conduct a classic cost-effectiveness analysis (with cost per quality of life calculation) but also affects
calculations of cost offsets due to failed treatments.
The CTAF analysis estimates risks of liver-related complications over a 5-year and a 20-year time horizon
for all patients and for the subset with advanced fibrosis. The overall risk of liver-related complications is
estimated at 6% at 5 years and 24% at 20 years. For patients with advanced fibrosis, the risk of liver-
related complications is 12% at 5 years and 48% at 20 years. Annual costs of care are higher for patients
with liver complications than patients with unsuccessfully treated chronic HCV ($25,728 vs $10,149).
However, in responding to comments on their modeling of the incidence of liver-related complications, the
CTAF authors state that “one might consider our approach to be less than conservative, as we applied
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the annual cost of liver-related complications to each year of the 5- or 20-year time horizon; in many
cases, these events will occur toward the end of the timeframe, and increased costs will only be realized
for a portion of that time” (p. 84). This assumption, the authors admit, will overestimate the lifetime costs
of treating liver complications, and thus also overestimate the cost offset of the more effective treatment.

Results of Representative Treatment Scenario

The CTAF analysis presents results for 12 treatment scenarios. We will examine in detail the results for a
particular treatment scenario, and simplify the comparisons to clarify the discussion. We will first show the
results of an analysis comparing sofosbuvir plus pegIFN/RBV with telaprevir plus pegIFN/RBV for HCV-1,
treatment-naive, IFN-eligible patients. This scenario corresponds to the principal base case in one of the
                          16
other studies (Petta et al ) identified for this Report.
Table 3 shows the analysis of short-term clinical and economic outcomes. Treating 1000 patients with
sofosbuvir plus pegIFN/RBV instead of telaprevir plus pegIFN/RBV results in 90 additional patients with
an SVR. This translates to a number needed to treat of 1000/90 or 11. Given the difference in costs of the
2 initial treatment regimens, the cost of initial treatment per additional patient SVR is $139,000. However,
patients in these groups will incur some additional drug costs due to retreatment and other costs. The
difference in total drug costs between the 2 regimens narrows to $4275 per patient when taking into
account additional short-term costs other than the initial treatment. Thus a better estimate of short-term
cost per additional SVR than provided in the CTAF report is $4,275,000/90 or $47,500 per additional SVR.

Table 3: Short-Term Clinical and Economic Impact of Sofosbuvir Plus PegIFN/RBV and Telaprevir Plus
                                                                                               17
PegIFN/RBV in Genotype 1, Treatment-Naive, IFN-Eligible Patients, Adapted From the CTAF Report
       Regimen                  SVR          NNT for             Initial          Incremental Cost     Average 1-      Incremental
                                 per        Additional         Treatment               of Initial      Year Total     1-Year Total
                                1000          SVR               Cost, $             Treatment per     Drug Cost, $      Drug Cost
                                                                                  Additional SVR, $                   per Patient, $
TEL+ pegIFN/RBV            740                      83,976                        107,713
SOF + pegIFN/RBV           830         11           96,468            139,000     111,988            4275
CTAF: California Technology Assessment Forum; NNT: number needed to treat; pegIFN: pegylated interferon; RBV:
ribavirin; SOF: sofosbuvir; SVR: sustained virologic response; TEL telaprevir.
These short-term results represent only additional expenditures needed to produce additional SVRs, and
do not show any recoupment of cost due to prevention of liver complications. Table 4 shows modeled
long-term effects of this treatment comparison. At 5 years, among the 90 additional patients in whom SVR
was achieved, they estimated that liver complications in 5 patients were prevented. In addition to the liver
complications avoided, ongoing treatment costs of persons with SVR are less than persons with
unsuccessfully treated HCV infection. The estimated cost offset per patient is $2154 in present-value
dollars at 5 years, which amounts to about half of the additional incremental cost per patient of $4275. At
20 years, the number of liver complication events averted and the cost offsets were considerably greater.
The cost offset per patient at 20 years was estimated to be $6957 in present-value dollars, which is greater
than $4275 and represents cost savings. Under the assumptions of the study, even without a formal cost-
effectiveness analysis in which the health benefits are translated into increased life expectancy or
improved quality of life, this would mean that sofosbuvir plus pegIFN/RBV improves health and decreases
costs compared with telaprevir plus pegIFN/RBV and would be classified as a dominant strategy.

Table 4: Modeled Long-Term Effects of Achieving Sustained Virologic Response
 Regimen Comparison            Incremental Liver        Cost Offset at 5       Incremental Liver                     Cost Offset at
                             Complication Events        Years, Present       Complication Events                       20 Years,
                               Averted per 1000           Value, per           Averted per 1000                      Present Value,
                             Patients at 5 Years, n        Patient, $        Patients at 5 Years, n                  per Patient, $
TEL + pegIFN/RBV vs                    ‒                        ‒                       ‒                                  ‒
SOF + pegIFN/RBV                       4                      2154                     17                                6957
pegIFN: pegylated interferon; RBV: ribavirin; SOF: sofosbuvir; TEL telaprevir.

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Critical Commentary

A particular aspect of the CTAF analysis we identified as problematic was the modeling and estimation of
long-term cost offsets. There are at least 2 modeling assumptions that result in overestimation of cost
offsets. First, the analysis assumes no mortality, and thus annual cost differences between groups due to
differences in numbers of patients achieving SVR and suffering liver complications persist throughout the
time horizon of the analysis. Most cost-effectiveness analyses incorporate both mortality due to unrelated
reasons and mortality due to disease into the cost accounting. With an assumption of no mortality in the
analytic model, cost differences between treatment groups are inflated, because the group with the
poorer outcomes continues to accrue treatment costs. This results in overestimation of the cost offsets
attributable to the better HCV treatment.
Second, the costs of incident liver complications, which result in much higher annual medical costs, were
calculated based on their occurrence at the beginning of the time horizon and persistence throughout the
whole time horizon. These liver complications would actually occur at a fairly constant rate throughout the
time horizon. The probable effect of this modeling assumption is at least to double the present value of
the cost of liver complications, but, due to the effects of discounting, it is difficult to calculate precisely.
Yet another source of overestimation of cost offsets are the values used for costs of care of
unsuccessfully treated HCV prior to onset of liver complications. The CTAF analysis uses results from a
study by Manos et al (2013) to assume that patients with SVR have annual medical costs of $6301
versus costs of $10,149 for patients who do not achieve SVR, a difference of $3848, in the years prior to
                             20
onset of liver complications. From examining the report by Manos et al, we learn that the cost estimates
incorporated in the CTAF model are unadjusted average costs. When adjusted for differences in baseline
characteristics between the 2 groups, the Manos study shows that the difference is reduced to $2648,
which is 69% of the unadjusted difference. In addition, the sample of subjects in the study by Manos et al
included a number of patients with preexisting cirrhosis (10.6%). There were a number of liver-related
hospitalizations contributing to the costs, and thus some costs of liver-related complications are imbedded
into these cost estimates, whereas the CTAF model was supposed to incorporate those costs separately.
Thus the absolute values of the costs are inflated beyond what they are supposed to represent. In
addition, the cost estimates used in the CTAF analysis are assumed to be constant over the
posttreatment time period. The actual trajectory of costs observed in the study by Manos et al varied over
the time period, rising from years 1 to 3, and then falling in years 4 and 5. It is unknown what the
trajectory of medical costs are beyond 5 years, but the CTAF analysis assumes the same average costs
for any number of years before liver complications occur. In sum, for all these reasons, the CTAF analysis
overestimates the cost offset of the more effective treatment.
Another example from the CTAF reports illustrates a different potential issue in the presentation and
interpretation of the CTAF results. For IFN-ineligible patients, there is no comparison treatment available
for certain categories of patients. Sofosbuvir-based treatments are highly effective in these patients, and
produce a large quantifiable health benefit (900 SVR per 1000 patients treated vs zero), but at a great
incremental increase in cost (vs zero cost of no treatment). Table 5, adapted from the CTAF report,
shows the short-term clinical and economic outcomes for treatment-naive, genotype 1 patients who are
IFN-ineligible, and who are treated with sofosbuvir plus simeprevir plus RBV compared with no treatment.
Due to the difference in the comparator, treatment of these patients with the sofosbuvir plus simeprevir
combination regimen appears to be much more costly than that for IFN-eligible patients. The incremental
cost of initial treatment for additional SVR for these patients is $172,000, which is much higher than that
for IFN-eligible patients. The comparable estimate to the $47,500 one-year cost per SVR calculated
previously for IFN-eligible patients is $169,990,000/900 or $188,900 per SVR for IFN-ineligible patients.
The values, as presented in the CTAF report, give the impression that treatment in this group of patients
is of less “value” than treatment of IFN-eligible patients, despite the large absolute gain in number of SVR
patients. The modeled long-term effects of this treatment comparison show similar findings. Rather than
showing full offset of initial treatment costs at 20 years as was estimated for IFN-eligible patients, which
implies eventual cost savings, the cost offset for IFN-ineligible patients is $69,566 of $169,990 per
patient, which is only 41% of initial treatment costs. This further appears to emphasize a poorer value in
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treating this particular group of patients. This result arises because the analysis does not emphasize or
account for the initial advantage that IFN-eligible patients have in terms of a previously available effective
but expensive treatment (telaprevir plus pegIFN/RBV). The presentation of these results in the CTAF
report does not address particular findings, which arise due to preexisting inequities in the availability of
effective treatments, that give the appearance of poor value of novel treatments in certain patient groups.

Table 5: Short-Term Clinical and Economic Impact of Sofosbuvir Plus Simeprevir Plus RBV and
No Treatment in Genotype 1, Treatment-Naive, IFN-Ineligible Patients, Adapted From the CTAF
       17
Report
   Regimen             SVR per           NNT for              Initial           Incremental Cost      Average 1-   Incremental 1-
                        1000            Additional          Treatment          of Initial Treatment   Year Total     Year Total
                                          SVR                Cost, $              per Additional      Drug Cost,   Drug Cost per
                                                                                       SVR, $             $           Patient, $
No treatment           0                            0                                                     0
SOF + SIM +          900             1          154,536              172,000                           169,990
                                                                                                   169,990
pegIFN/RBV
CTAF: California Technology Assessment Forum; NNT: number needed to treat; pegIFN: pegylated interferon; RBV:
ribavirin; SIM: simeprevir; SOF: sofosbuvir; SVR: sustained virologic response.

                                                                      Petta et al

Scope of Study
                                                                 16
Compared with the CTAF analysis, Petta et al evaluates the cost-effectiveness of sofosbuvir-based
treatments for a narrow spectrum of patients. Petta et al only considered patients with previously
untreated IFN-eligible HCV-1. This amounts to only 1 treatment comparison of the 12 treatment
comparisons carried out in the CTAF analysis, shown in Table 2. However, within this group of patients,
analyses were carried out with patients stratified by IL28B genotype (CC, CT/TT), genotype 1 subtype
(G1a, G1b), and stage of fibrosis (Metavir F0-F3, Metavir F4). SVR rates varied according to these patient
characteristics, consistent with the results of clinical trials of sofosbuvir, boceprevir, and telaprevir. For all
comparisons, sofosbuvir plus pegIFN/RBV was compared with boceprevir plus pegIFN/RBV response-
guided therapy or telaprevir plus pegIFN/RBV response-guided therapy.

Structure of the Analysis

Health Outcome
The study by Petta et al is a cost-effectiveness analysis in which treatment effects are translated into
increased quantity and quality of life. The principal outcome is the estimation of a cost per QALY, where
cost-effectiveness ratios are compared between nondominated treatment strategies. Cost-effectiveness
ratios below a certain value (in this analysis, €25,000 [U.S. $33,333] per life-year gained) are considered
reasonably good value and societally worthwhile expenditures.
Other Key Assumptions of Analysis
The investigators used Markov models to simulate the probability of future events and medical costs that
vary because of the differing HCV treatment strategies. For patients in whom SVR is not achieved, the
progression of liver disease from chronic infection to compensated cirrhosis to decompensated cirrhosis
and ultimately to death is modeled using parameters estimated from studies of the natural history of HCV
infection. The model was validated by comparing outcomes it generated with models developed by other
researchers. Death due to other causes is incorporated into the analysis for all subjects regardless of
treatment. The model used a base case of a cohort of white male patients, 50 years old, with a weight of
70 kg. The model assumed treatment at that age and then modeled health outcomes over a lifetime
horizon. The cost perspective used is that of the Italian National Health Service. We did not identify any
major assumptions or parameter estimates that might produce a predictable bias.

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Results of Base Case Analysis

Principal results of the base case are shown in Table 6. Using a willingness-to-pay threshold of $33,333,
sofosbuvir plus pegIFN/RBV was considered cost-effective overall, in the CT/TT subgroups and in the 1a
subgroup when compared with telaprevir plus pegIFN/RBV. When compared with boceprevir plus
pegIFN/RBV, sofosbuvir was considered cost-effective overall, in the CT/TT subgroup, in both fibrosis
subgroups, and in the 1a subgroup. For patient groups that did not meet the willingness-to-pay threshold,
the amount by which they exceeded the threshold was not large and would likely be within the range of
the uncertainty of the analysis. The reason why the cost-effectiveness ratios are lower, and therefore
more economically attractive, when sofosbuvir is compared with boceprevir rather than telaprevir is that
boceprevir is not as effective as telaprevir. Overall, the study is supportive of the value of sofosbuvir-
based treatment compared with other accepted HCV treatment.

Table 6: Incremental Cost-Effectiveness Ratios of Sofosbuvir Plus PegIFN/RBV Versus Either
Telaprevir Plus PegIFN/RBV or Boceprevir Plus PegIFN/RBV, Overall and in Subgroups, as
                        16
Reported by Petta et al
              Patient Group                          Incremental Cost-Effectiveness                   Incremental Cost-Effectiveness
                                                    Ratio of Sofosbuvir vs Telaprevir                Ratio of Sofosbuvir vs Boceprevir
                                                         ($ per Life-Year Gained)                         ($ per Life-Year Gained)
Overall                                                            33,005                                           26,888
IL28B genotype subgroups
  CC                                                      60,440                                                  36,751
  CT/TT                                                   29,639                                                  24,829
Degree of fibrosis subgroups
  Metavir F0-F3                                           35,259                                                  21,647
  Metavir F4 (cirrhosis)                                  46,541                                                   7,260
Genotype 1a or 1b subgroups
  1a                                                      25,812                                                  17,135
  1b                                                    Dominated                                                 40,083
Euro values in Petta et al translated into dollars using €0.75 = $1 U.S.
pegIFN: pegylated interferon; RBV: ribavirin.

Critical Commentary

The principal results contain some inconsistencies. There is a typographical error in the abstract and text,
which state that “[sofosbuvir] was cost-effective compared with [boceprevir] with the exception of
cirrhosis.” However, the cost-effectiveness ratio of $7260 per life-year gained is the lowest value of all the
subgroups, indicating exactly the opposite.
When comparing some of the overall cost-effectiveness ratios with some of the subgroup cost-effective
ratios, the values are not numerically consistent. For example, the overall cost-effectiveness ratio for
sofosbuvir versus telaprevir is $33,005. However, the subgroup cost-effectiveness ratios for F0-F3 fibrosis
and F4 fibrosis (cirrhosis) are both higher than this value ($35,259 and $46,541, respectively). The higher
cost-effectiveness ratio for F4 fibrosis than for lesser degrees of fibrosis appears to derive from an
assumption of lower effectiveness of sofosbuvir for F4 fibrosis.
This is also an inconsistent result in which, given the willingness-to-pay threshold of $33,333, sofosbuvir
compared with telaprevir is cost-effective overall, but is not cost-effective for separate groups based on
degree of fibrosis. If properly modeled, the overall cost-effectiveness ratio should be a weighted average
of $35,259 and $46,541, weighted according to the proportion of the overall sample that is F0-F3 and F4.
In examining this issue further, the overall base case is not fully defined for the proportion of subjects in
the base case who are at various stages of fibrosis, the proportions with IL28B genotype, and the
proportions with genotype 1 subtype. We attempted to estimate these proportions by calculating these
proportions based on the assumption that the overall SVR rates for a particular treatment are a weighted
average of the subgroup-specific SVR rates, and by calculating a weight that corresponds to the
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proportional size of the subgroup. Estimates were contradictory. This suggests that the SVR estimates for
overall and subgroup responses derived from sources that are not consistent. Thus the accuracy and
validity of the subgroup findings raise concern. The lack of more detailed specification of the base case in
terms of the important characteristics of treatment groups makes the validity of the base case result
uncertain.

                                                                   Leleu et al

Scope of Study
                                  18
The study by Leleu et al evaluates the cost-effectiveness of sofosbuvir-based treatments for patients
with genotypes 1-6, treatment-naive and -experienced, with and without HIV coinfection, and IFN-eligible
and -ineligible, for a total of 12 patient subgroups defined by these characteristics. Not all possible
subgroups were included because of lack of clinical data for some subgroups, and because the analysis
was designed to represent the distribution of patients that currently exists in France. For each subgroup,
a single comparator treatment was selected. The single largest subgroup in the analysis, representing
56.8% of the study population, consists of treatment-naive genotype 1 non-HIV-coinfected patients. The
comparator treatment for this subgroup was telaprevir plus pegIFN/RBV. For most of the other subgroups,
the comparator treatment was either no treatment (2 subgroups) or pegIFN/RBV for either 24 or 48 weeks
(8 subgroups).

Structure of the Analysis

Health Outcome
The study by Leleu et al is a cost-effectiveness analysis in which treatment effects are translated into
increased quantity and quality of life. The principal outcome is the estimation of a cost per QALY, where
cost-effectiveness ratios are compared between the sofosbuvir-based treatment strategy and the
comparator strategy. There was no explicit threshold for asserting cost-effectiveness, but the authors
mention that $53,333 per QALY gained is considered a commonly accepted value.
Other Key Assumptions of Analysis
The investigators used Markov models to simulate the probability of future events and medical costs that
vary because of the differing HCV treatment strategies. In patients for whom SVR is not achieved, the
progression of liver disease from chronic infection to compensated cirrhosis to decompensated cirrhosis
and ultimately to death is modeled using parameters estimated from studies of the natural history of HCV
infection. Health outcomes were modeled over a lifetime horizon. The study does not report whether the
model was validated. Certain aspects of the base case are not clearly specified in the study. For example,
the age of patients in the base case is not specified. The proportion of patients with cirrhosis was
assumed to be either 40% or 50%, depending on the subgroup. Patients who achieved SVR with
treatment were assumed to have a mortality rate identical to that of the general population. The cost
perspective used is that of the French medical system.

Results of Base Case Analysis

Principal results of the base case are shown in Table 7. The study does not report results for separate
patient subgroups defined by genotype, prior treatment experience, and IFN eligibility. The overall
incremental cost per QALY is $21,704. The study is supportive of the value of sofosbuvir-based treatment
compared with other accepted medical treatments. Results were also presented separately by cirrhosis
stage (Metavir F0-F4), although within each cirrhosis stage there is an unknown mix of genotypes, prior
treatment experience, and IFN eligibility. For stage F0, the cost-effectiveness ratio was $54,204 per
QALY. For stage F4 (cirrhosis), it was $16,107 per QALY.



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