Economic savings versus health losses: the cost-effectiveness of generic antiretroviral therapy in the United States

Abstract

Background: U.S. HIV treatment guidelines recommend branded once-daily, 1-pill efavirenz-emtricitabine-tenofovir as first-line antiretroviral therapy (ART). With the anticipated approval of generic efavirenz in the United States, a once-daily, 3-pill alternative (generic efavirenz, generic lamivudine, and tenofovir) will decrease cost but may reduce adherence and virologic suppression.

Objective: To assess the clinical effect, costs, and cost-effectiveness of a 3-pill, generic-based regimen compared with a branded, coformulated regimen and to project the potential national savings in the first year of a switch to generic-based ART.

Design: Mathematical simulation of HIV disease.

Setting: United States.

Patients: HIV-infected persons.

Intervention: No ART (for comparison); 3-pill, generic-based ART; and branded ART.

Measurements: Quality-adjusted life expectancy, costs, and incremental cost-effectiveness ratios (ICERs) in dollars per quality-adjusted life-year (QALY).

Results: Compared with no ART, generic-based ART has an ICER of $21,100/QALY. Compared with generic-based ART, branded ART increases lifetime costs by $42,500 and per-person survival gains by 0.37 QALYs for an ICER of $114,800/QALY. Estimated first-year savings, if all eligible U.S. patients start or switch to generic-based ART, are $920 million. Most plausible assumptions about generic-based ART efficacy and costs lead to branded ART ICERs greater than $100,000/QALY.

Limitation: The efficacy and price reduction associated with generic drugs are unknown, and estimates are intended to be conservative.

Conclusion: Compared with a slightly less effective generic-based regimen, the cost-effectiveness of first-line branded ART exceeds $100,000/QALY. Generic-based ART in the United States could yield substantial budgetary savings to HIV programs.

Primary funding source: National Institute of Allergy and Infectious Diseases.

Appendix Figure 1

Potential annual cost savings in the US with Three-pill or Two-pill Generic ART compared to Branded ART. The potential annual savings on a Two-pill (black bars) or Three-pill (gray bars) Generic ART are compared to Branded ART over a range of generic drug price reductions (%). The horizontal axis shows the range of price reductions, which span from 35% to 95% savings; the base case of 75% savings is indicated by the arrow. The vertical axis shows the amount of money projected to be saved (2009 USD in millions) over one-year horizon. Calculations in this analysis assume that all persons remain on their designated Generic or Branded ART regimen for the first year and do not switch to a subsequent line of therapy before the end of 12 months. (ART: Antiretroviral therapy)

Figure 1

The clinical and economic outcomes of Branded and Generic ART. Per-person lifetime costs are on the horizontal axis and quality-adjusted life expectancy on the vertical axis. Gray solid lines indicate the anticipated incremental cost-effectiveness ratios of Branded ART compared to No ART in the absence of a generic alternative. Figure 1a shows Three-pill Generic ART; Figure 1b shows both Two-pill and Three-pill Generic ART.

Figure 1

The clinical and economic outcomes of Branded and Generic ART. Per-person lifetime costs are on the horizontal axis and quality-adjusted life expectancy on the vertical axis. Gray solid lines indicate the anticipated incremental cost-effectiveness ratios of Branded ART compared to No ART in the absence of a generic alternative. Figure 1a shows Three-pill Generic ART; Figure 1b shows both Two-pill and Three-pill Generic ART.

Figure 2

Two-way sensitivity analyses demonstrating the changes in the incremental cost-effectiveness ratio (ICER) of Branded ART, compared to the Three-pill Generic ART (vertical axis), as a function of the generic drug price reduction (horizontal axis) and the early efficacy of Three-pill Generic ART (alternative lines). In the base case, Branded ART has an ICER>$100,000/QALY, as long as the generic drug discount from AWP is greater than 65% (⦿). Figure 2a represents results when the monthly probability of late failure (after 24 weeks) is 0.45% in the Three-pill Generic ART strategy (probability of late failure for Branded ART is 0.21%). Figure 2b represents results when the monthly probability of late failure is 0.21% in the Three-pill Generic ART strategy (probability of late failure after for Branded ART is also 0.21%). Even modest price reductions (>40%) for the generic regimen components result in ICERs for Branded ART >$100,000/QALY (⦿). In both graphs, the arrow and vertical line indicate the base case Generic ART savings (75%).

Figure 2

Two-way sensitivity analyses demonstrating the changes in the incremental cost-effectiveness ratio (ICER) of Branded ART, compared to the Three-pill Generic ART (vertical axis), as a function of the generic drug price reduction (horizontal axis) and the early efficacy of Three-pill Generic ART (alternative lines). In the base case, Branded ART has an ICER>$100,000/QALY, as long as the generic drug discount from AWP is greater than 65% (⦿). Figure 2a represents results when the monthly probability of late failure (after 24 weeks) is 0.45% in the Three-pill Generic ART strategy (probability of late failure for Branded ART is 0.21%). Figure 2b represents results when the monthly probability of late failure is 0.21% in the Three-pill Generic ART strategy (probability of late failure after for Branded ART is also 0.21%). Even modest price reductions (>40%) for the generic regimen components result in ICERs for Branded ART >$100,000/QALY (⦿). In both graphs, the arrow and vertical line indicate the base case Generic ART savings (75%).