To persuade payers to cover the costs of new cures for the hepatitis C virus, drug makers have deployed a potent new ally, a company whose marquee figures are leading economists and healthcare experts at the nation's top universities.
This article first appeared February 23, 2017 on ProPublica. This story was co-published with Consumer Reports.
Over the last three years, pharmaceutical companies have mounted a public relations blitz to tout new cures for the hepatitis C virus and persuade insurers, including government programs such as Medicare and Medicaid, to cover the costs.
That isn't an easy sell, because the price of the treatments ranges from $40,000 to $94,000—or, because the treatments take three months, as much as $1,000 per day.
To persuade payers and the public, the industry has deployed a potent new ally, a company whose marquee figures are leading economists and health care experts at the nation's top universities. The company, Precision Health Economics, consults for three leading makers of new hepatitis C treatments: Gilead, Bristol-Myers Squibb, and AbbVie.
When AbbVie funded a special issue of the American Journal of Managed Care on hepatitis C research, current or former associates of Precision Health Economics wrote half of the issue. A Stanford professor who had previously consulted for the firm served as guest editor-in-chief.
At a congressional briefing last May on hepatitis C, three of the four panelists were current or former Precision Health Economics consultants. One was the firm's co-founder, Darius Lakdawalla, a University of Southern California professor.
"The returns to society actually exist even at the high prices," Lakdawalla assured the audience of congressional staffers and health policymakers. "Some people who are just looking at the problem as a pure cost-effectiveness problem said some of these prices in some ways are too low."
Even as drug prices have come under fierce attack by everyone from consumer advocates to President Donald Trump, insurers and public health programs have kept right on shelling out billions for the new hepatitis C treatments, just as Precision Health Economics' experts have urged them.
With a battle looming between the industry and Trump, who has accused manufacturers of "getting away with murder" and vowed to "bring down" prices, the prestige and credibility of the distinguished academics who moonlight for Precision Health Economics could play a crucial role in the industry's multipronged push to sway public and congressional opinion.
ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.