China’s efforts towards elimination of viral hepatitis as a public health threat
In responding to the global vision of eliminating hepatitis C as a public health threat, several actions were taken by the Chinese government. The Prevention and Treatment Guideline for Hepatitis C was updated to incorporate the latest DAAs as part of standards of treatment for hepatitis C in 2015[9]. In 2017, the National Viral Hepatitis Prevention and Control Plan (2017-2020) was developed and released [12]. The National Diagnosis Standard for Hepatitis C was updated in 2018 [13], which for the first time presented the distribution of HCV genotypes in China to support better clinical decision making.
In 2016, DAAs were included in the new priority review channel for regulatory approvals of novel medicines, which was part of the regulatory reforms. The first oral DAA, daclatasvir-asunaprevir was marketed in April 2017, which officially enabled China to enter a new era of hepatitis C treatment. This was followed with several other DAAs, including the first locally developed DAA, danoprevir in 2018. By the end of March 2019, nine DAAs were registered, and further three were undergoing clinical trials in China (Annex 2) [14]. However, access of these DAAs remains limited, due to the very high retail prices, ranging between US$ 10 000-17 600 per standard treatment course in the private sector.[a]
The approach to unblock the barriers of financing these high-priced medicines and to ensure reduction of out-of-pocket (OOP) expenses in China is to ensure inclusion under health insurance. In October 2018, the National Health Commission (NHC) announced inclusion of the pan-genotypic DAA sofosbuvir/velpatasvir in the National Essential Medicines List [15]. However, listing as essential medicines does not mean it can be publicly funded in China. As patients can only get access to the publicly funded medicines through health insurance. Being listed by health insurance is a prerequisite of getting access. Selections of essential medicines and reimbursed medicines are administered by different government agencies with different processes, and by different expert committees. NHC is in charge of listing essential medicines, and the newly established National Healthcare Security Administration (NHSA) takes care of listing reimbursed medicines. Until the end of April, none of the nine marketed DAAs was listed by NHSA yet, including the one listed by NHC as national essential medicines.
With increasing availability of new DAAs in the Chinese market, several local health insurance programs piloted publicly funded initiatives to improve access. Zhejiang province pioneered to have sofosbuvir and sofosbuvir/velpatasvir covered by the provincial catastrophic health insurance [16]. This was followed by Tianjin, Chengdu and Changchun city, Jiangsu, Shandong, Jilin and Anhui provinces. Most of the local health insurance programs negotiated prices of DAAs, and set a fixed proportion of co-payment with patient, with insurance reimbursement ranged between 40%-90%. Patients are usually required to pay 10-20% of the total expenditure OOP, or a fixed amount of nearly US$ 3000 before getting reimbursed. Tianjin was the first to pilot a capitated provider payment, which prospectively set per patient price and pay hospitals in lump-sum rather than reimbursing a proportion of total expenditure with retrospective fee-for-service (FFS) provider payment.
The approaches of Tianjin city
Epidemiology
Tianjin, a city in the east of China, is one of the four municipalities directly under the central government. It is an economic center in the Boghai Bay, the largest open coastal city in the north of China with 15.60 million permanent residents [17]. The 2010 point of prevalence survey of hepatitis C showed that, the prevalence rate among the registered permanent residents in Tianjin was 24.10 per 100 000 (132/ 547 782) [18]. A 2013 study found that, the mortality rate of hepatitis C related cirrhosis and liver cancer was 0.6 per 100 000 [19]. Data from the Notifiable Communicable Diseases Reporting System of Tianjin showed that, a total of 8 421 new cases of hepatitis C were reported during 2004-2018 (914 in 2018). The notification rate of hepatitis C in 100 000 permanent residents ranged from the highest of 7.03 in 2006, dropped steadily to the lowest of 2.95 in 2012. Notifications increased after 2012, and reached 5.86 per 100 000 permanent residents in 2018 [20-24].
Financing HCV treatment: before 2014
Before DAAs were marketed in China, interferon therapy was the only regimen recommended for the treatment of hepatitis C under the coverage of Tianjin Basic Health Insurance. The standards for treatment was a dose of 180μg interferon, one subcutaneous injection per week for 6-12 months, and usually combined with oral ribavirin. Nearly all patients relapsed after treatment and required re-treatment [12]. Repeated injections lead to poor compliance and tolerance, and involved additional treatment for adverse drug reactions (ADRs). In addition, most hepatitis C patients chose inpatient care as a way to access better benefic package. Patients have to pay US$ 75 (residents) and US$ 194 (employees) OOP before getting reimbursed, and there is an annual reimbursement cap for outpatient care (US$ 450 for the residents and US$ 820 for the employees). While the annual reimbursement cap for inpatient care is much higher (US$ 45 000 for the residents and US$ 75 000 for the employees) [25,26]. The cost of frequent hospitalization was high at around US$ 16 400 per 12 months, including ward and inpatient care fees, costs for diagnosis and tests, interferon, ribavirin and other medicines to manage ADRs [27]. Even interferon was covered by the insurance, 11% and 16% of the total cost were paid OOP by retirees and employees, and 35%-45% by the residents (higher premium contribution getting lower OOP). The OOP payment accounted 2.2 and 3.2 months of the retirees and employees’ salary, and 17.6-22.6 months of the residents’ disposable income (Table 1). The insurance designated hospitals were co-paid by insurance and patients for the actual expenditure with retrospective FFS method.
Financing HCV treatment: 2014-2017
Repeat inpatient care and resource exhausted FFS provider payments were expensive, and clearly this approach was not efficient use of healthcare resources. In 2014, Tianjin Basic Health Insurance shifted the provider payment for hepatitis C treatment from FFS to capitation. The capitated amount of per patient covered costs of interferon, ribavirin, as well as necessary tests and ADR treatments at around US$ 5700 for 6 months and US$ 11 300 for 12 months. This amount was co-paid by insurance and patients following the inpatient care benefit package, but patients did not necessarily pay OOP before getting reimbursed [27-29]. Only those who were treated at the day-care-ward, and followed the clinical pathway as defined by Tianjin Basic Health Insurance could register to the pilot program [30], which was implemented in one hepatitis specialty hospital in Tianjin. With this plan, 10% and 15% of the total cost were paid OOP by retirees and employees, and 35%-45% by the residents. The OOP patient accounted 1.1 and 1.6 months of the retirees and employees’ salary, and 9.7-12.5 of the residents’ disposable income (Table 1). The designated hospital was co-paid at US$ 11 300 by insurance and patients with prospective capitated payment method. Hospitals bore the over-run cost, and could keep the balance in case that the real treatment cost is less than the capitated amount.
Evolving the financing of HCV treatment from 2018
In 2018, when increasing numbers of DAA being registered and marketed in China, Tianjin Basic Health Insurance negotiated the prices of all marketed DAAs. US$ 5300 per standard treatment course was agreed for most of DAAs except sofosbuvir/velpatasvir, which was about 60% of the private market price. A fixed amount of US$ 6045 was set as per patient price for outpatient care, valid for two years until 2020. This includes US$ 750 for necessary diagnosis and tests, medications for ADRs, and monitoring and management fees (including HCV RNA testing but not genotype testing). Clinical pathways were formulated by Tianjin Basic Health Insurance, which enable clinicians to have tailor-made treatment choices. DAAs included in the clinical pathways are presented in Annex 3. Patients get reimbursed following the specialty outpatient care benefit package. Before getting reimbursed, US$ 75 (residents) and US$ 194 (employees) have to be paid OOP. With this pilot, 13% and 18% of the total cost is paid OOP by retirees and employees, and 45%-55% by the residents. The OOP payment accounts 0·7 and 1·0 months of the retirees and employees’ salary, and 5.6-6.8 months of the residents’ disposable income (Table 1). Up until now, three specialty hospitals have been designated, who are co-paid at a mount of US$ 6045 by insurance and patients with the prospective capitated payment method. Hospitals bear the over-run cost, and keeps the balance in case that the real treatment cost is less than the capitated amount. Designated hospitals can directly transfer the prescriptions to the designated retail pharmacies through the health insurance information system, DAAs are dispensed at the retail pharmacies. Five retail pharmacies are designated in Tianjin city.
Patients in financial hardship are eligible for the Patient-Assistance-Program (PAP) created by China Primary Health Care Foundation (CPHCF). They have to be certified by the Tianjin Civil Affairs Bureau, and provide a record of receiving minimum living allowance during the past consecutive 12 months. The eligible patients can be provided with up to 6 bottles of originator sofosbuvir free of charge. Low-income patients (whose annual immediate family[2] income is less than 2.5 times of the family annual medical expense) can apply up to 3 bottles of originator sofosbuvir free of charge in case of need more than 3-month treatment. The pre-condition is that patients have to finish advance 3-month treatment with originator sofosbuvir before application, which can be reimbursed by insurance following the capitated specialty outpatient care benefit package. With the PAP, although patients in financial hardship pay nothing to sofosbuvir, they have to pay genotype tests OOP, and have the expenditures of necessary diagnosis and tests, medications for ADRs co-paid with insurance (following the common outpatient care benefit package). However, this benefit package is very limited (US$ 75 OOP payment before getting reimbursed, insurance reimburses 50%, US$ 450 reimbursement cap). This common outpatient benefit package also applies to the expenditures of continued treatment of low-income patients who require more than 3-month treatment. They can register the new insurance coverage to complete their advance treatment, co-pay with insurance under the specialty outpatient benefit package, and have to add genetic testing to their total OOP payment (Table 1). Hospitals are co-paid by insurance and patients for the actual treatment cost with retrospective FFS method.
By the end of March 2019, there were 876 hepatitis C patients registered the new insurance coverage and treated in Tianjin. Among which, two adopted pegylated interferon + ribaviri + DAA treatment protocol, 874 were treated with DAA (Figure 1). As of the end of March 2019, 153 were cured, 723 were under treatment and follow-up.[3] There were a total of 148 patients (11 patients in financial hardship and 137 low-income patients) supported by the hepatitis C PAP.[4]
[a] Calculated based on the lowest (CNY 11 200/month) and highest (CNY 19 660/month) market price of originator sofosbuvir in China, obtained from the key informants interview of the hepatitis C Patient Assistance Program in China. Conversions between US$ and CNY were made with the rate of 1 US$=6.7 CNY, this rate was applied throughout this manuscript.
[2] Defined by the Patient Assistance Program as: family members including parents, children, husband or wife.
c Data were extracted from the database of Tianjin Healthcare Security Administration and Tianjin Healthcare Security Management and settlement Center.
d Data were extracted from the database of the Patient Assistance Program managed by the China Primary Health Care Foundation.