Evidence-based Synthesis Program Department of Veterans Affairs

Health Services Research & Development Service

March 2013

Assessment of Alternative 

Treatment Strategies for Chronic 

Genotype 1 Hepatitis C

Prepared for:

Department of Veterans Affairs

Veterans Health Administration

Quality Enhancement Research Initiative

Health Services Research & Development Service

Washington, DC 20420

Prepared by:

Evidence-based Synthesis Program (ESP) Center

West Los Angeles VA Medical Center 

Los Angeles, CA

Paul G. Shekelle, MD, PhD, Director

VA Health Economics Resource Center

Menlo Park, CA

Paul G. Barnett, PhD, Director

Investigators:

Principal Investigator: 

Jeremy D. Goldhaber-Fiebert, PhD

Investigators:

Paul G. Barnett, PhD

Sharon Dally, MS 

Steven M. Asch, MD, MPH

Shan Liu, SM

Lauren Cipriano, BSc, BA

Douglas K. Owens, MD, MS 

Research Associates:

Isomi M. Miake-Lye, BA

Jessica M. Beroes, BS
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Assessment of Alternative Treatment Strategies 

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PREFACE

Quality Enhancement Research Initiative’s (QUERI) Evidence-based Synthesis Program 

(ESP) was established to provide timely and accurate syntheses of targeted healthcare topics 

of particular importance to Veterans Affairs (VA) managers and policymakers, as they work to 

improve the health and healthcare of Veterans. The ESP disseminates these reports throughout 

VA.

QUERI provides funding for four ESP Centers and each Center has an active VA affiliation. The 

ESP Centers generate evidence syntheses on important clinical practice topics, and these reports 

help to:

• develop clinical policies informed by evidence

• guide the implementation of effective services to improve patient 

outcomes and to support VA clinical practice guidelines and 

performance measures, and 

• set the direction for future research to address gaps in clinical 

knowledge

In 2009, the ESP Coordinating Center was created to expand the capacity of QUERI Central 

Office and the four ESP sites by developing and maintaining program processes. In addition, 

the Center established a Steering Committee comprised of QUERI field-based investigators, 

VA Patient Care Services, Office of Quality and Performance, and Veterans Integrated Service 

Networks (VISN) Clinical Management Officers. The Steering Committee provides program 

oversight, guides strategic planning, coordinates dissemination activities, and develops 

collaborations with VA leadership to identify new ESP topics of importance to Veterans and the 

VA healthcare system.

Comments on this evidence report are welcome and can be sent to Nicole Floyd, ESP 

Coordinating Center Program Manager, at nicole.floyd@va.gov.

Recommended citation: Goldhaber-Fiebert JD, Barnett PG, Dally S, Asch SM, Liu S, Cipriano 

L, Owens DK, Miake-Lye IM, Beroes JM, Shekelle PG. Assessment of Alternative Treatment 

Strategies for Chronic Genotype 1 Hepatitis C. VA ESP Project #05-226, 2013. 

This report is based on research conducted by the Evidence-based Synthesis 

Program (ESP) Center located at the West Los Angeles VA Medical Center, Los 

Angeles, CA funded by the Department of Veterans Affairs, Veterans Health 

Administration, Office of Research and Development, Quality Enhancement Research 

Initiative. The findings and conclusions in this document are those of the author(s) 

who are responsible for its contents; the findings and conclusions do not necessarily 

represent the views of the Department of Veterans Affairs or the United States 

government. Therefore, no statement in this article should be construed as an official 

position of the Department of Veterans Affairs. No investigators have any affiliations 

or financial involvement (e.g., employment, consultancies, honoraria, stock ownership 

or options, expert testimony, grants or patents received or pending, or royalties) that 

conflict with material presented in the report.
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TABLE OF CONTENTS

EXECUTIVE SUMMARY

Background.................................................................................................................................................... 1

Methods......................................................................................................................................................... 1

Peer Review................................................................................................................................................... 2

Results ........................................................................................................................................................... 2

Abbreviations Table....................................................................................................................................... 3

INTRODUCTION............................................................................................................................................... 4

METHODS

Adapting Previously Developed HCV Model to VA..................................................................................... 5

Preliminary Analyses of VA Administrative Data ......................................................................................... 8

Peer Review................................................................................................................................................. 12

RESULTS

Results Used to Inform the Model............................................................................................................... 13

Key Question #1. What are the current usage patterns of directly acting antivirals and of IL-28B 

patient genotyping in the VA health system? And how do these patterns differ by VISN? ........................ 21

Key Question #2. What will be the health impacts of using either of two available directly acting 

antivirals combined with pegylated interferon and ribavirin (triple therapy)?............................................ 23

Key Question #3. How will the magnitudes of the health impacts measured in Key Question #2 

change if IL-28B patient genotyping is used to offer triple therapy to those less likely to benefit 

from two-drug pegylated interferon + ribavirin?......................................................................................... 24

Key Question #4. What will be the cost and resource use patterns when using either triple therapy 

or IL-28B-guided triple therapy?................................................................................................................. 25

SUMMARY AND DISCUSSION

Summary of Evidence by Key Question ..................................................................................................... 26

Limitations................................................................................................................................................... 27

Recommendations for Future Research....................................................................................................... 28

Conclusions ................................................................................................................................................. 28

REFERENCES ................................................................................................................................................... 29

APPENDIX A. Peer Review Comments/Author Responses .......................................................... 32

TABLES

Table 1. Number of Sources Identified for Each Model Attribute/Area ................................................ 13

Table 2. Demographic Characteristics Assumed for VA HCV GT1 Population .................................... 14

Table 3. Transplantation for Advanced Liver Disease Related to HCV................................................. 14

Table 4. Treatment Parameters Estimates for the VA HCV GT1 Population......................................... 16

Table 5. VA-specific Cost Inputs............................................................................................................ 17

Table 6. Treatment Eligibility and Uptake over 5 Years (number of Veterans) ..................................... 21
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Table 7. Annual Effect of Universal Triple Therapy on Health Outcomes over 5 Years....................... 24

Table 8. Annual Effect of IL-28 Guided Triple Therapy on Health Outcomes over 5 Years................. 24

Table 9. Average Annual Net Increase in Cost by Treatment Strategy and Uptake Rate over 

the 5 Years of the Analysis Relative to Standard Therapy ....................................................... 25

FIGURES

Figure 1. Decision Model (Panel A) and HCV Natural History Model (Panel B) .................................... 6

Figure 2. Cumulative Proportion of Treatment-eligible, Chronic HCV Individuals Taking 

Up Therapy............................................................................................................................... 20

Figure 3. Uptake of DAA Therapies by VISN (x-axis denotes VISN number)....................................... 21

Figure 4. Use of IL-28B Testing and DAAs by VISN............................................................................. 22

Figure 5. The Days on Treatment for Each DAA Appear Reasonably in Line with Its 

Therapeutic Protocols............................................................................................................... 23
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EVIDENCE REPORT

INTRODUCTION

There is great potential to improve health outcomes for Veterans and other patients with 

chronic genotype 1 (GT1) Hepatitis C (HCV) infections through the use of newly-available 

directly acting antiviral (DAA) medications and patient genotyping (IL-28B). Chronic GT1 

HCV infections have been historically difficult to treat with low cure rates on standard two 

drug therapy (Pegylated Interferon + Ribavirin), high rates of side-effects and treatment 

discontinuation, and low rates of uptake. Recently, FDA approved two DAAs (boceprevir and 

telaprevir). Used in combination with standard two drug therapy as triple therapy, these DAAs 

show higher rates of sustained viral response, though they are also more costly and have more 

severe side-effect profiles. IL-28B genotyping can help to identify patients least likely to respond 

to standard therapy and hence who stand to benefit the most from triple therapy and for whom, 

therefore, the increased risks of side-effects may be most justified.

To achieve the potential health benefits from DAAs and IL-28B genotyping while 

acknowledging very real budgetary and resource constraints, proactive planning supported by 

appropriate analyses is needed. VA added boceprevir to its formulary approximately a year ago, 

allows the use of telaprevir off formulary for a number of reasons, and has the capability to use 

IL-28B patient genotyping as well. Responding to a request for guidance submitted to the VA 

Evidence-based Synthesis Program (ESP), we undertook a set of preliminary studies aimed at 

providing rapid, timely estimates of cost, resource and health impacts of using DAAs and/or IL28B genotyping within VA over a 5 year time horizon.

Specifically, we addressed four related questions:

•	 Key Question #1: What are the current usage patterns of directly acting antivirals and 

of IL-28B patient genotyping in the VA health system? And how do these patterns 

differ by VISN?

•	 Key Question #2: What will be the health impacts of using either of two available 

directly acting antivirals combined with pegylated interferon and ribavirin (triple 

therapy)?

•	 Key Question #3: How will the magnitudes of the health impacts measured in 

Question #2 change if IL-28B patient genotyping is used to offer triple therapy to 

those less likely to benefit from two-drug pegylated interferon + ribavirin?

•	 Key Question #4: What will be the cost and resource use patterns when using either 

triple therapy or IL-28B-guided triple therapy?

We answered these questions over a 5 year time horizon, comparing health outcomes and costs of 

standard two-drug treatment to adoption of these new technologies. Importantly, these results are 

appropriate for short-term budgeting and planning considerations but they should not be used for 

formal cost-effectiveness analyses as they do not represent the full costs and benefits experienced 

over a life time.
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METHODS

We undertook three main activities to answer these questions. 

First, we performed an observational analysis of VA data to evaluate the uptake, use, and costs of 

therapies for HCV. This characterized the current state of DAA and IL-28B testing within VA in 

roughly the first year since adoption. Observational analysis was also used to estimate the cost of 

care for patients with liver disease.

Second, we adapted our previously-developed HCV computer model1 to more closely reflect VA 

patient populations with chronic GT1 HCV infections and patterns of HCV care in VA. In order 

to adapt this model, we performed a rapid literature review for chronic HCV-related studies from 

2000-2012 that focused on VA populations. This review included peer-reviewed literature and for 

other reports. We performed preliminary analyses of VA administrative data to examine the usage 

patterns of DAAs and IL-28B in VA in the past year and the cost of care of patients with HCV. 

We used this information in the computer model so that it would reflect the VA patient population 

and care practices.

Third, using the adapted model, we then performed model-based projections of health outcomes 

and costs of alternative HCV treatment strategies.

ADAPTING PREVIOUSLY DEVELOPED HCV MODEL TO VA

Brief description of the HCV computer model

The computer simulation model of HCV we use here has been described in detail previously.1

For convenience, we describe it here briefly. The model has two main parts: 

1. Decision model that incorporates alternative treatment strategies for chronic GT1 HCV and 

potentially uses IL-28B genotyping to select the most appropriate treatment for a patient 

based on the IL-28B genotype results (Figure 1 Panel A). 

2. HCV natural history model that projects the course of future health prior to initiating, during, 

and after treatment and also tracks clinical events, resource utilization, costs, morbidities, and 

mortality (Figure 1 Panel B).
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Figure 1. Decision Model (Panel A) and HCV Natural History Model (Panel B)

Cohort Characteristics

• Age (40, 50 , 60)

• Sex (male, female)

• Race (white, black)

• Race-specific prevalence of

IL-28B genotype (CC, non-CC)

• Fibrosis stage

(F0, F1, F2, F3, F4)

Decision Alternatives for each Cohort Type

 CC

Standard therapy

Initiate PEG-IFN+Rb Non-CC

 CC

Universal triple therapy Initiate PEG-IFN+Rb+PI Non-CC

Identified CC Initiate PEG-IFN+Rb IL-28B guided triple therapy Identified Non-CC Initiate PEG-IFN+Rb+PI

The model is stratified by a set of cohort characteristics including age, sex, race, IL-28B genotype, 

and stage of liver fibrosis (Metavir score F0-F4). While IL-28B genotypes include CC, CT, and TT, 

the similarity of response to therapy for CT and TT and the relatively limited amount of data on 

these types, especially when further stratified by race, led us to combine them into non-CC.

Three main strategies are included in the model. The first is standard therapy, the continued use 

of 48 weeks of Pegylated Interferon + Ribavirin for all patients regardless of IL-28B genotype 

(i.e., without genotyping them). The second strategy is universal triple therapy, the use of 

DAAs in combination triple therapy for all patients regardless of IL-28B genotype (i.e., without 

genotyping them). The third strategy considered is IL-28B guided triple therapy. In the strategy, 

patients are first tested for the IL-28B genotype. Patients with CC type are most likely to respond 

to standard therapy and are directed to the treatment. Those with non-CC types are provided with 

triple therapy. All strategies use specific response guided protocols (not shown). Models for all 

strategies include risks, costs, and quality-of-life reductions due to side-effects as well as the 

possibility of non-adherence and discontinuation above and beyond response guided protocols.

The HCV natural history model tracks individuals at 4 week intervals. During each interval, 

people have the chance of transition along the solid black arrows which represent progression 

through various states of liver fibrosis, advanced liver disease including decompensated cirrhosis, 

M

M

M

M

M

M

Dead

Portal fibrosis

with no septa

(F1)

Portal fibrosis

with few septa

(F2)

Portal fibrosis

with numerous septa 

(F3)

No fibrosis

(F0)

No HCV

Post-liver 

transplant

Recovered, No 

HCV, History of 

‘mild’ fibrosis

Liver transplant

Recovered, No 

HCV, History of 

‘moderate’ fibrosis

Decompensated 

cirrhosis

Hepatocellular 

carcinoma

(HCC)

Compensated 

cirrhosis 

(F4)

Recovered, No 

HCV, History of 

‘severe’ fibrosis
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hepatocellular carcinoma, and liver transplantation. At all times, people have an age, sex, and race 

specific risk of death with elevated risks for advanced liver disease. Successful treatment that leads 

to SVR and cure allows individuals to transition along the dashed arrows to “recovered” states that 

are stratified by fibrosis severity. In recovered states, individuals have lower mortality risks and 

lower ongoing medical care costs than in the corresponding states prior to recovery.

The model considers chronic GT1 HCV individuals who are HCV treatment naïve who do not 

have a co-occurring HIV infection.

Literature Review of Veteran-related Chronic HCV-related Studies from 2000-2012

We conducted a rapid evaluation of references for information on chronic HCV infection in 

U.S. Veterans. Because of the limited time available, we did not undertake the formal methods 

of a systematic literature review. We searched PubMed for published studies from 2000-2012 

on topics that included both “chronic HCV” and “veterans.” Identified abstracts were reviewed 

and full text of articles obtained. We further reviewed these articles’ bibliographies for other 

important sources that the search may have missed. Additionally, we performed web searches 

and VA-specific website searches to locate VA reports and other public, non-journal-published 

data relevant to these topics. We then extracted information from these sources. When we 

combined information from the studies and sources described above, we gave precedence to 

recent studies, large studies, representative studies, and high-quality studies. We did not assess 

articles formally for quality and attempted to be as inclusive as possible. Articles were excluded 

that did not report provide sufficient detail on a needed parameter.

Mortality in Veterans regardless of HCV has been modeled actuarially as reflected in the VA’s 

VetPop 2007 model (www.va.gov/VETDATA/Demographics/Demographics.asp). 

Additional information on mortality relating to HCV and liver disease is reported in a number of 

studies.23,29,31 We combined this information on VA-specific age and sex-stratified mortality rates, 

using NHANES (National Health and Nutrition Examination Survey) III linked estimates of 

hazard rate ratios for mortality due to HCV by race/ethnicity to reflect the background mortality 

patterns of individuals within VA with chronic HCV infections.

Preparing the Model for Performing Preliminary Projections on Cost and 

Outcomes for the VA’s Chronic HCV GT1 Population

The preliminary resource analysis considered a representative cohort of chronic HCV GT1 

infected individuals in VA. In the analysis, scenarios are considered that use DAAs (Key 

Question 2, Key Question 4) alone or with IL-28B patient genotyping (Key Question 3, Key 

Question 4) as an alternative to standard two drug therapy and in which treatment uptake may 

differ from the past. Each scenario examines the costs of delivering such treatments over a 5 year 

window of time as well as the health benefits within this 5 year window. 

Importantly, costs and benefits are reported for these 5 particular years only. As they do not 

include subsequent costs or benefits beyond these 5 years, this analysis CANNOT be used to 

assess the cost-effectiveness of these treatment strategies. Cost-effectiveness analysis employs a 

lifetime time horizon, considering all costs and benefits over the patients’ lifetimes. 
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Representative Cohort of Chronic HCV GT1 Infected Individuals in VA

We defined a representative cohort of chronic HCV GT1 infected individuals in VA based on 

published studies of VA HCV populations and other VA-specific documents and data that are 

described in the results. 

Treatment-eligible Patient Population and Uptake Scenarios

To provide estimates of total costs due to DAAs and IL-28B genotyping, it is necessary to 

determine the size of the treatment-eligible patient population and likely patterns of treatment 

uptake. We then combined the update scenarios with the treatment-eligible population for 

analyses. 

PRELIMINARY ANALYSES OF VA ADMINISTRATIVE DATA

The VA Health Economics Resource Center examined national data extracts from the VA 

Decision Support System (DSS) to identify use of DAA medications and IL-28B testing VA for 

the period of July 2011 through June 2012. Administrative data were also used to identify the 

size of the population with HCV infection. VA cost data from the 2010 federal fiscal year were 

analyzed to determine the cost of care for patients with different stages of liver disease.

VA Population with Chronic HCV Receiving VHA Care

The VA hospital discharge and outpatient visit files for the year ending 9/30/2011 were used 

to identify all persons who received at least one service that was assigned an ICD-9 diagnosis 

code for HCV. For this time period, the national prevalence of an HCV ICD-9 diagnosis code is 

approximately 2.6%.

Prescription Data on DAA Medication Use

The VA DSS National Data Extract of prescription data was analyzed for the use of DAA 

medications boceprevir or telaprevir. A record was considered to refer to a DAA if all of the 

following were true:

•	 National Drug Code (NDC) was for one of these DAA medications

•	 Internal entry number (IEN) from the VA drug file was for one of the DAA 

medications

•	 The DSS Intermediate Product (IPNUMBER) was either for a specific DAA or for a 

“new drug.”

The text in the drug description field was not used to identify DAA medications. The text 

“telaprevir” did not appear in any record. The text “boceprevir” did not appear in the drug 

description field of these records until the 2012 fiscal year. An additional 169 records that had 

text description that included the string “boceprevir FY12”, and DSS intermediate product 

number for pegylated interferon, were reviewed. Records that had a quantity of medication that 

was consistent with boceprevir were included in the analysis. 
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Data on IL-2B Genotype Testing Use

The DSS National Data Extract of laboratory orders was evaluated. All records with a laboratory 

test description containing the text “IL-28” were included in the analysis.

VISN-level Analyses

To enable VISN-level analyses, we assigned VISN number using the VISN recorded in the 

first record for a DAA prescription fill in the pharmacy data, or the first IL-28B test in the 

laboratory data. We used the first record in order to be consistent in characterizing number of 

new treatments and the length of treatment episodes. When we combined the lab data (on IL-28B 

testing) with prescription data (on DAA fills), if the VISN was not the same in the two sources, 

the conflict was resolved by using the VISN in the earlier record.

Key Question #1 Analysis Plan: What are the current usage patterns of directly 

acting antivirals and of IL-28B patient genotyping in the VA health system? And 

how do these patterns differ by VISN?

We divided this overarching question into a number of related sub-questions answered 

individually below.

Sub-question 1.1: How many people initiated DAAs during 07/1/11-06/30/12? How did 

this differ across VISNs? How has this changed since the introduction of DAAs into VA?

We created a person-level file using prescription records during the year 7/1/11-6/30/12. We 

summarized the data so that there was one record per patient. The summary record included a 

patient identifier, a variable to indicate if the patient initiated boceprevir, and the month when 

this medication was first dispensed. Each summary record also included a variable to indicate 

whether telaprevir was initiated and the month that this medication was first dispensed. This 

patient-level file was used to determine the number of unique persons initiating DAA, and the 

number initiating each medication.

Sub-question 1.2: How many unique people had an IL-28B test during 07/1/11-

06/30/12? How did this differ across VISNs?

We created a person-level file from qualifying IL-28B laboratory records from the study year. 

The file included the patient identifier and an indicator that the patient received at least one IL28B test during the study year. We report the total number of patients who had an IL-28B test. 

Sub-question 1.3: Among people receiving DAA, how many had IL-28B testing? Among 

those with IL-28B testing, how many received DAA therapy? How does this differ across 

VISNs? 

We approached this question in two ways. We first compared the counts of individuals initiating 

DAA therapy and being tested with IL-28B testing by VISN without examining whether the 

counts were of the same individuals or not. Second, we combined the person-level prescription 

and laboratory files from the study year, and created a 2 x 2 table to show the number receiving a 

DAA medication, an IL-28B test, or both. Note that the cell for neither is not included, as persons 

had to receive either a DAA medication or an IL-28B test to be included. 
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Sub-question 1.4: Among persons who initiated DAA treatment during the study year, 

what is the length of their treatment episode?

We examined how long individuals initiating DAAs were on treatment before ending it. From the 

data available, we could not ascertain the reason for ending treatment (e.g., treatment success, 

discontinuation because of an adverse event, etc.). Our analysis considered the incomplete 

nature of the data available. We extracted data from 7/1/2011 until 5/31/2012. In this analysis, 

we excluded data from June, 2012, to be certain that results would not be affected by possible 

incomplete processing of prescriptions filled at the end of the study period. We had between one 

month and one year of prescription data on those who initiated DAA treatment in this period. 

We evaluated treatment duration using a method similar to a survival analysis. We used these 

data to characterize the percentage of persons with available data who were still in treatment at 

each interval of time. We created one record for each patient for each medication, and called this 

a treatment episode. We found the length of treatment and the length of follow-up. We ignored 

any treatment gaps resulting from delays in filling prescriptions in defining the duration of 

treatment. We use the following procedure:

First, we excluded cases with uncertain data. Most records reported the days’ supply of 

medication that was dispensed. If this field was missing, we estimated the days of supply by 

dividing the quantity of drug by the recommended daily dose (12 pills for boceprevir or 6 pills 

for telaprevir). We excluded 3% of the records with a value of more than 90 days of supply 

dispensed at single prescription fill date. 

Second, we then created an episode data base with one record for combination of person and 

drug (a small number of persons initiated treatment with both drugs, and when this occurred we 

included both starts in our data). Although data were extracted for the month of June, 2012, we 

excluded these data as we were uncertain if all records from that month had been processed. We 

created an episode database with the following variables:

•	 Medication: The medication for this episode, either boceprevir or telaprevir.

•	 Total days supply: The total day supply in all prescription fills. 

•	 Days of treatment: The number of days of treatment was defined as the greater of two 

numbers: the total number of days’ supply of medication that was dispensed, or the 

number of days between the date the prescription was first dispensed and the date that 

the last prescription would have been exhausted. The first number, days’ supply of 

medication, represents the length of treatment in patients who were prompt in filling 

prescriptions. The second number represents the duration of treatment in patients 

who were not prompt in refilling prescriptions, and includes some days in which 

medication doses were missed. 

•	 Medication possession ratio: The medication possession ratio was the total days 

of supply divided by the number of days from treatment initiation to exhaustion 

of last prescription. This number was less than 100% in patients who did not fill 

prescriptions on time. This number was more than 100% when prescriptions were 
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Assessment of Alternative Treatment Strategies 

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refilled promptly. In this case, there was an accumulated a supply of medication 

available to take when this last fill would otherwise have been exhausted.

•	 Days of follow-up: The days of follow-up was the number of days from treatment 

initiation to the end of follow-up (5/31/12), that is, the date that information about 

this treatment episode was censored by limits of the data extract. Episodes in which 

days of supply exceeded the days of follow-up are censored; there is insufficient 

information to know the length of that treatment episode. There is sufficient 

information to know that the treatment lasted at least as long as the number of days of 

follow-up.

•	 Month in which treatment was initiated: The month in which the first prescription 

was filled. We used this information to see if there was a trend in the number of 

individuals starting treatment.

Third, we characterized length of treatment, considering the limitation of follow-up. We 

considered the percentage of people who were still receiving the DAA in each 4 week interval 

(after 4 weeks, after 8 weeks, after 12 weeks, etc.). For each interval, we computed: 1) the 

denominator (number who could have been treated this long, that is, whose follow-up was 

not yet censored); and 2) the numerator (number actually treated this long). For example, we 

evaluated the episode database for boceprevir to see treatments that lasted at least 4 weeks. 

We counted as the denominator the number of persons still being followed, those who initiated 

treatment more than 28 days before the last date in the prescription data. We counted in the 

numerator the number of these persons (with 28 days of follow-up) who had at least 28 days of 

treatment. Note that it was possible for an individual to have more days of medication than days 

of follow-up, and that we only included in the numerator those eligible for the denominator. This 

analysis was repeated for subsequent 4 weeks intervals, until there were no more cases that met 

the criteria for the denominator (52 weeks). 

Key Question #2: What will be the health impacts of using either of two available 

directly acting antivirals combined with pegylated interferon and ribavirin (triple 

therapy)?

The analytic plan for addressing Key Question #2 involved three steps: 

1. Synthesizing VA-specific data into model-usable inputs: Information from administrative data 

analyses and literature reviews were combined to produce inputs usable by the model.

2. Running VA-specific cohorts through the simulation model under each treatment strategy at 

various rates of uptake for the new DAAs: Simulations were conducted using computers and 

TreeAge modeling software. Under each combination of treatment and uptake rate, the model 

produced a set of outputs that were then analyzed to address the Key Question.

3. Computing multiple, annual health impacts over a 5 year horizon: Improving treatment 

efficacy has the potential to ameliorate a variety of non-fatal and fatal outcomes. Non-fatal 

outcomes included decompensated cirrhosis, hepatocellular carcinoma, and the need for liver 

transplant. We considered mortality due to chronic HCV in general and to advanced liver 

disease in particular. We combined the effects of non-fatal and fatal outcomes into a single, 
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standard measure – quality-adjusted life years (QALYs). All outcomes were computed over 

a 5 year horizon and reflect the annualized difference between standard two-drug therapy 

and alternatives that included a DAA as part of HCV treatment. As the goal was to consider 

short-term effects within the VA Health System, results DO NOT consider lost life years or 

reduced quality-of-life for individuals in years after the 5 year horizon and therefore likely 

underestimate the full health benefits of patients’ lifetimes.

Key Question #3: How will the magnitudes of the health impacts measured in Key 

Question #2 change if IL-28B patient genotyping is used to offer triple therapy to 

those less likely to benefit from two-drug pegylated interferon + ribavirin?

The analytic plan for Key Question #3 was the same as that of Key Question #2 except that 

instead of evaluating universal triple therapy, the treatment strategy that was evaluated was IL28B patient genotyping to guide who receives standard two-drug therapy and who receives triple 

therapy with a DAA.

Key Question #4: What will be the cost and resource use patterns when using 

either triple therapy or IL-28B-guided triple therapy?

The analytic plan for Key Question #4 was the same as that of Key Questions #2 and #3 except 

that the cost impacts over a 5 year horizon were considered. This meant that costs of treatment, 

contingent on response guided therapy protocols and adherence, were tallied for individuals 

initiating treatment. Costs depended on treatment effectiveness, as the model tallied the effect 

of sustained viral response in averted treatment of advanced liver disease. Like health benefits, 

costs were only considered for a 5 year period. The effectiveness of treatment strategies after the 

5 year horizon were not considered, and therefore the estimates are likely underestimate the full 

lifetime cost effects and do not represent lifetime horizon needed to estimate cost-effectiveness.

The costs of inpatient and outpatient care are based on relative values of the national average 

Medicare reimbursement rate, adjusted to correspond to actual VA expenditures (the HERC 

average cost estimates). These estimates were based on an analysis of cost of care provided to 

VA patients with HCV who received care in the 2010 federal fiscal year conducted by the Health 

Economics Resource Center. Pharmacy costs were based on data in the DSS prescription-level 

national data extract from the same period, with the exception of cost of DAA medications. All 

cost estimates include both the direct costs of care and the indirect (overhead) costs of providing 

that care.

PEER REVIEW

A draft version of this report was reviewed by six technical experts as well as clinical leadership. 

Their comments and our responses are presented in Appendix A.
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RESULTS

RESULTS USED TO INFORM THE MODEL

Table 1 below shows the number of sources with information relevant to various parts of the 

topic.

Table 1. Number of Sources Identified for Each Model Attribute/Area

Attribute

Age

Sex

Race/ethnicity

Fibrosis stage

HCV genotype

Liver transplant

Liver cancer

Mortality

HCV clearance

# of Sources

28

27

25

11

15

2

3

4

4

Attribute

Treatment eligibility

Treatment uptake

Treatment completion

Treatment effectiveness

Side-effects

HCV care costs

Drug costs

Side-effect costs

Advanced liver disease costs

Quality of life

# of Sources

10

9

11

13

4

1

1

1

1

8

We now describe the information from the published studies within the sources noted in the 

table above. Many studies describe the demographic and health characteristics of Veterans with 

chronic HCV infections. The mean age of individuals with chronic HCV infections is between 

45-55 years in most studies with the majority in the low to mid 50s.2–26 Most individuals with 

chronic HCV in VA are male, with study means falling between 90-100% with the majority at 

97%.2–4,6,7,9–19,21–25,27 Race/ethnicity reports tend to be complete in smaller clinical studies with 

substantial portions marked as missing or unknown in very large registry and administrative 

studies. Even so, if one looks at the proportion of White to African American individuals among 

those whose race/ethnicity is reported, there is reasonable stability across studies with a ratio 

of between 2.0:1 and 2.5:1 being common – hence for the analysis we assume that of African 

American and White individuals, the percentage that were White was assumed to be 69%.2–4,6,11,13–

16,18–21,23–28 HCV genotype is reported in a number of studies, though often not all individuals in 

the study have their HCV infection genotyped and sometimes genotypes 1 and 4 are grouped 

together as are genotypes 2 and 3. In these studies, typically 70-85% of chronic HCV infections 

are genotype 1.2,5,7,10,11,13,15,17,19,22,24–27 Liver fibrosis stage distribution is important information that 

is not reported in many studies, with F0-F2 often grouped together and F3-F4 grouped together. 

In some studies, only F4 and decompensated cirrhosis are reported. Typically the F2 and F3 

fibrosis stages are the most common in these studies.6,7,10,13,17,19,24–27,29 Clearance rates of chronic 

HCV infection are reported in one study.20 These data inputs to the model are summarized in 

Table 2, below. 
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Assessment of Alternative Treatment Strategies 

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Table 2. Demographic Characteristics Assumed for VA HCV GT1 Population

Model Input Value

Age (years) 55

Sex

 Male 97%

 Female 3%

Race

 White 69%

 African American 31%

Fibrosis Distribution (see below for 

alternatives) 8%

 F0 25%

 F1 33%

 F2 20%

 F3 14%

 F4

Fewer studies provide detailed data on advanced liver disease. Few studies report data on liver 

transplantation, though a review of liver transplant outcomes in African Americans includes 

information on African American Veterans.30 Likewise, there is relatively little information on 

hepatocellular carcinoma in the chronic HCV infected Veterans.29–31 These data inputs to the 

model are summarized in Table 3, below. 

Table 3. Transplantation for Advanced Liver Disease related to HCV

Model Input Value Sources/Notes

Rate of liver transplantation for 2,500 Based on preliminary analyses of VA administrative 

individuals with decompensated data for 2010 prepared by HERC, it appears that 

cirrhosis (chronic genotype 1 HCV approximately 0.5% have liver transplants within VA 

who are treatment eligible) (# per itself. However, these data rely on a very small sample 

100,000 person years) size and only 6 months of follow-up on average. 

Specifically, among 16,234 VA patients with cirrhosis 

in FY10, 79 (.49%) had a liver transplant during the 

year. This count includes transplants provided by nonVA providers if these were sponsored by VA. Given 

that the model tracks post-transplant care within VA 

even if transplants themselves occur outside VA, we 

assume a higher rate so as not to undercount costs in 

the model.
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Assessment of Alternative Treatment Strategies 

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Model Input Value

8,000

Sources/Notes

Based on preliminary analyses of VA administrative 

data for 2010 prepared by HERC, it appears that 

approximately 0.5% have liver transplants within 

VA itself. However, these data rely on a very small 

sample size and only 6 months of follow-up on 

average. Specifically, among 2,883 VA patients with 

HCC in FY10, 42 (1.5%) had a liver transplant. 

This count includes transplants provided by nonVA providers if these were sponsored by VA. Given 

that the model tracks post-transplant care within VA 

even if transplants themselves occur outside VA, we 

assume a higher rate so as not to undercount costs in 

the model.

Rate of liver transplantation for 

individuals with HCC (chronic 

genotype 1 HCV who are treatment 

eligible) (# per 100,000 person years)

A number of studies provide information on HCV treatment-related parameters within VA. 

Consistent information on the proportion of Veterans who are treatment eligible is less available 

as the definition of treatment eligibility differs between studies and between clinician assessment 

as well as official VA guidance over time in this regard. In general, treatment eligibility ranges 

from approximately 30-55% and is most commonly in the 40-45% range,2,4,7,15–18,27,28,32 though 

this may be somewhat lower in the VA population if the studies were conducted in populations 

who are more likely to be eligible for treatment. Studies on treatment uptake also are less 

straightforward to compare as some report uptake among those who are treatment eligible 

and some report on uptake among all participants. Furthermore, uptake is often reported as a 

cumulative percentage with different lengths of follow-up. Long-term uptake among treatment 

eligible individuals ranges from approximately 20-50% in studies with 30-35% being the most 

common.2,4,7,10,15,17,18,27 For similar reasons, treatment completion rates reported in various studies 

are difficult to compare,2,4,7,15,19,24,26–28,33,34 as are treatment success rates.2,6,7,10,11,15,19,24,26–28,30,32,33

Given these challenges, we describe how we estimate treatment completion and success rates for 

the VA population we model below.

HCV treatment completion and success rate information for the VA population, especially 

for very recently introduced triple therapy that includes a DAA, is not readily available. We 

estimated these parameters using the following methods for both standard two-drug treatment 

and triple therapy. For both standard treatment and triple therapy, we used the race/ethnicity 

distributions derived as described in the preceding paragraphs. Because, treatment effectiveness 

was predicated on IL-28B genotype, we used the distribution of CC versus non-CC (CT and TT) 

IL-28B genotypes by race/ethnicity reported in Thompson (2010).34

For standard two-drug treatment, overall rates of treatment completion were similar across 

multiple studies within VA.15,24,33 Because the data from Beste (2010) provides information 

on which individuals quit due to treatment failure versus an unspecified reason, we used this 

study in particular to estimate the overall rate of treatment non-completion for a reason other 

than treatment failure.33 Butt (2010) showed that African Americans were 10% less likely to 

complete treatment than individuals of other races, so we calculated race-specific treatment noncompletion rates.4

 Beste (2010) also identified the overall proportion of patients who terminated 
16

Assessment of Alternative Treatment Strategies 

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treatment due to treatment failure at 12 and 24 weeks.33 We estimated the race- and IL-28Bgenotype stratified relative risks of treatment failure at 12 and 24 weeks based on Thompson 

(2010).34 Using these new race- and IL-28B genotype-stratified probabilities of treatment failure 

at 12 and 24 weeks, we computed the race- and IL-28B genotype stratified rates of SVR for 

patients who completed 48 weeks of treatment such that these SVR rates satisfied race-specific 

SVR rate ratios for CC to non-CC types (Thompson 2010) and the overall intent to treat SVR 

rate observed in Kramer (2012) (i.e., 27% in non-African Americans and 15.8% in African 

Americans).15 These data inputs to the model are summarized in Table 4, below.

For triple therapy, we used a very similar process to that for standard two-drug therapy. 

Importantly, no studies report on treatment completion rates for triple therapy in VA since these 

treatments have only recently been introduced. The assumptions we used, therefore, were less 

VA-specific than for standard two-drug therapy and more closely resembled our previously 

published analysis.1 We assumed that patients do not complete treatment for reasons other than 

treatment failure at the same rate whether they are receiving standard or triple therapy, using 

standard therapy VA-specific discontinuation rates described above. We assumed that the raceand IL-28B-genotype specific 12 week treatment failure rate was the same for patients receiving 

standard or triple therapy, also as described above. These small changes in assumptions, while 

maintaining all of other assumptions from the prior analysis,1

 resulted in triple therapy intent to 

treat SVR rates of 48.9% in non-African Americans and 37.3% in African Americans. These data 

inputs to the model are summarized in Table 4, below.

Table 4. Treatment Parameters Estimates for the VA HCV GT1 Population

Model Input Value Value

for for

Whites African

Americans

Treatment dropout rate (# per 100,000 person years) 37,040 48,534

Standard Two-Drug Therapy Parameters

Early Virologic Response (EVR) at 12 weeks

 CC genotype 98% 97%

 Non-CC genotype 91% 86%

Continue treatment beyond 24 weeks (conditional on EVR at 

12 weeks)

 CC genotype 97% 89%

 Non-CC genotype 86% 82%

Sustained Virologic Response (SVR) (conditional on 48 weeks 

of treatment)

 CC genotype 60% 60%

 Non-CC genotype 34% 27%

Triple Therapy Parameters

No virologic failure at 12 weeks

 CC genotype 98% 97%

 Non-CC genotype 91% 86%
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Assessment of Alternative Treatment Strategies 

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Model Input Value Value

for for

Whites African

Americans

No virologic failure at 24 weeks (conditional on no failure at 

12 weeks) 62% 48%

 CC genotype 43% 48%

 Non-CC genotype

No virologic failure at 48 weeks (conditional on no failure at 

12 weeks)

 CC genotype 28% 38%

 Non-CC genotype 42% 38%

Sustained virologic response given 24 weeks of treatment

 CC genotype 98% 95%

 Non-CC genotype 95% 89%

Sustained virologic response given 48 weeks of treatment

 CC genotype 75% 70%

 Non-CC genotype 65% 60%

A number of studies report quality-of-life for Veterans with chronic HCV infections both 

for those not on treatment as well as those while on treatment (including rates of sideeffects).19,21,22,27,28,35–40

Notably, very limited information appears in the published literature on the cost of HCV 

treatment and care for Veterans in VA. For costs we relied on prior communications with the 

Office of Pharmacy Benefits Management as well as preliminary analyses performed by HERC. 

Additionally, both for costs and other information, we relied on the VA State of Care report on 

HCV.1 The cost data included in the model are summarized in Table 5, below. 

Table 5. VA-specific Cost Inputs

Cost Type Amount Sources/Notes

Cost of Peg-RIB 48 weeks and $15,281 Peg-RIB costs $9,120 to which we add costs of 

care/monitoring during that care during the 48 weeks of treatment of $6,161 

time* (assuming a full 48 weeks) assumed to be 1.5 times 

the costs of HCV care prior to treatment success to 

account for other monitoring, etc.

Additional Cost of Boceprevir $18,753 Assumed Boceprevir (provisional) FSS price is 

(24 weeks) (to be added to the $3,125.49 per 28 day supply 

Cost of Peg-RIB 48 weeks 

above)

Additional Cost of Telaprevir $36,828 Assumed Telaprevir (provisional) FSS price is 

(12 weeks) (to be added to the $12,276.10 per 28 day supply 

Cost of Peg-RIB 48 weeks 

above)

Average adverse events costs 2 $1,920

drug therapy
18

Assessment of Alternative Treatment Strategies 

for Chronic Genotype 1 Hepatitis C Evidence-based Synthesis Program

Cost Type Amount Sources/Notes

Average adverse events costs 3 $2,586 The mix of adverse events is different for 

drug therapies Boceprevir and Telaprevir but the average costs 

(likelihood times cost of dealing with the sideeffects, summed over all side-effects) for both drugs 

have been observed to be quite similar (see for 

example, Stephens, et. al. AASLD poster, 38).

Annual HCV care (w/o Peg- $4,450 HERC preliminary analysis of 2010 data: Since this 

RIB or other treatment costs) is just care that is related to HCV and liver disease 

we take the difference of the total cost of care for 

people with uncomplicated chronic HCV ($11,486) 

and subtract the average cost of care for people in 

VA ($7,036)

Annual post-successful $2,225 HERC preliminary analysis of 2010 data, per note 

treatment HCV care costs above: We assume that this care is roughly 50% of 

the cost of care prior to achieving treatment success 

as seen in studies not specific to VA HCV patient 

populations.

Annual decompensated $13,093 HERC preliminary analysis of 2010 data, per note 

cirrhosis care costs (w/o Peg- above: We subtract from the costs for those with 

RIB or other Tx) decompensated cirrhosis ($20,129) the average 

costs of care for people in VA ($7,036).

Annual HCC costs (w/o Peg- $71,954 HERC preliminary analysis of 2010 data suggests 

RIB or other Tx) an annual cost of $33,096 among all individuals, 

including those who died and did not complete full 

year of treatment. Since our cost is conditional on 

survival (model cycle length much shorter than 

1 year), we used a VA report and other data that 

suggest a roughly 15% 3-year survival. (http://

www.hepatitis.va.gov/provider/reviews/HCC.

asp and Surveillance, Epidemiology and End 

Results (SEER)) which implies that the cost should 

be multiplied by [1.00/0.46], implying the cost of 

$71,954.

Year of Liver Transplant cost $152,313 HERC preliminary analysis of 2010 data, adjusted 

of care for censoring of people who die and do not 

complete full year of treatment: $134,036 (using 

1.00/0.88 again as the survival multiplier as above)

Other sources suggest that costs are closer to: 

$250,000 but may include the transplant itself as 

well as a 7-day hospital stay. Still other sources 

suggest $150,000 - $250,000 range (http://www.

hepatitis.va.gov/pdf/feedback-forum.pdf from 

2007)
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Assessment of Alternative Treatment Strategies 

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Cost Type Amount Sources/Notes

Years post Liver Transplant 

cost of care

$32,903 HERC preliminary analysis of 2010 data, adjusted 

for censoring of people who die and do not 

complete full year of treatment: $31,587 (here we 

use a 1.00/0.96 survival multiplier)

Other sources suggest $12,000 as the annual 

medication cost alone (http://www.hepatitis.

va.gov/patient/complications/transplant-basics.

asp)

* Note: For the costs of treatment using response guided algorithms (i.e., triple therapies), costs are scaled for early 

stopping due to Early Virologic Response or failure to achieve sufficient reductions per response guided therapy in 

the model itself.

We defined a representative cohort of chronic HCV GT1 infected individuals in VA based on 

published studies of VA HCV populations and other VA-specific documents and data which 

are described in the results. The cohort’s age is 55 years with 97% male, 69% white, and 31% 

African American. These characteristics as well as the liver fibrosis distribution assumed are 

shown in Table 2 above.

Treatment-eligible Patient Population

The total population of chronic HCV infected Veterans is approximately 189,065 according to 

the VA’s State of Care 2010 report. The report also notes that this number has stayed stable over 

the preceding 5 years. Of these, based on the literature review, we assume that approximately 

80% are genotype 1 HCV infections – the major genotype with the lowest overall response rate 

to standard two-drug therapy, for which DAAs appear to offer the greatest benefit, and in which 

they have been best studied to date. Of these individuals, again based on the literature review, 

approximately 45% are treatment-eligible. Finally, since the analysis focuses on treatment-naïve 

individuals and based on the State of Care 2010 report as well as the published literature, we 

assume that approximately 70% of individuals have not been treated previously.

8,000≅189,065*0.80*0.45*0.70

Based on these calculations, the analysis uses an estimate of approximately 48,000 GT1 chronic 

HCV-infected, treatment-eligible, treatment-naïve Veterans for determining total costs and health 

benefits.

Uptake Scenarios

The analysis considered multiple uptake scenarios. In all scenarios, the comparator was standard 

two-drug therapy offered to all treatment-eligible patients with the assumption that 2% of this 

group took up therapy annually over the 5 year window considered in the analysis. Uptake 

scenarios considered the effects of DAAs possibly combined with IL-28B genotyping at three 

different levels of uptake:

•	 Approximately 2% of treatment-eligible chronic HCV GT1 infected Veterans take-up 

HCV treatment each year, similar to uptake rates for standard two-drug therapy
20

Assessment of Alternative Treatment Strategies 

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•	 Approximately 4% each year, double the uptake rates for standard two-drug therapy – 

slightly above those actually observed in VA towards the latter half of FY2008, based on 

the preliminary analyses reported below (Figure 2)

•	 Approximately 8% each year, quadruple the uptake rates for standard two-drug therapy

Multiple uptake scenarios were explored because future uptake is highly uncertain. There is little 

experience with DAAs and IL-28B genotyping as they have only recently become available in 

VA. The effect of newer treatments and technologies currently in clinical testing contributes to 

this uncertainty. Figure 2 below compares historical rates of uptake of standard two drug therapy 

to the uptake scenarios we consider for DAA strategies.

Figure 2. Cumulative Proportion of Treatment-eligible, Chronic HCV Individuals Taking Up Therapy

Combining Uptake Scenarios with the Treatment-eligible Population for Analyses

Table 6 estimates the number of individuals initiating treatment under each uptake scenario. The 

analyses consider what would happen over the next five years if the strategy was switched from 

standard two-drug therapy to each of the two other alternatives. Separate estimates are made for 

each strategy under each of the three uptake scenarios. 

Table 6. Treatment Eligibility and Uptake over 5 Years (number of Veterans)

Veterans with HCV 189,065

Veterans with GT1 HCV 106,667

Veterans with GT1 HCV eligible for treatment 48,000

Current uptake rate (2%/year) 15,495

Doubled uptake rate (4%/year) 26,702

Quadrupled update rate (8%/year) 36,609

Cumulative Treatment Uptake Among Treatmenteligible Veterans

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

State of Care Report 2010

Uptake Scenarios

PEG-Rib Historic Uptake Triple Therapy Same Uptake

Triple Therapy 2x Uptake Triple Therapy 4x Uptake

| | | | | | | | | | | | | | | | | | | |

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
21

Assessment of Alternative Treatment Strategies 

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KEY QUESTION #1. What are the current usage patterns of directly 

acting antivirals and of IL-28B patient genotyping in the VA health 

system? And how do these patterns differ by VISN?

Sub-question 1.1: How many people initiated DAAs during 07/1/11-06/30/12? How 

did this differ across VISNs? How has this changed since the introduction of 

DAAs into VA?

Between July 2011 and June 2012 nearly 3,000 people initiated DAA treatment, with 

approximately 80% using on-formulary boceprevir (Boceprevir N=2,366, Telaprevir N=501). There 

was heterogeneity in the number of people taking up DAA therapies across VISNs (see Figure 3). 

Part of this difference must be attributed to differences in the number of treatment-eligible chronic 

HCV-infected Veterans in each VISN. Uptake of DAAs increased since July 2011, but seems to 

have stabilized at approximately 300 new people initiating DAAs per month. If the uptake pattern 

of approximately 300 per month continues over the next year, this would imply that approximately 

3,000-4,000 new DAA treatments might be expected to be initiated annually, assuming January 

2012 through May 2012 indicate longer-term average usage in VA of DAAs. This uptake rate is 

then slightly higher than the 3,393 standard two-drug (PEG-RIB) treatments initiated in 2008, 

as the State of Care 2010 report states.41 It is however unclear if this uptake rate will continue in 

subsequent years (backlog vs. popularization vs. waiting for even newer drugs).

Figure 3. Uptake of DAA Therapies by VISN (x-axis denotes VISN number)

300

250

200

150

100

50

0

2 10 17 19 20 11 12 5 18 3 22 7 23 15 4 6 1 9 8 21 16

TELAPREVIR

BOCEPREVIR

--------------------------------------------
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Assessment of Alternative Treatment Strategies 

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Sub-question 1.2: How many unique people had an IL-28B test during 07/1/11-

06/30/12? How did this differ across VISNs?

During the period of interest, 2,171 individuals had an IL-28B test. Currently VA IL-28B tests are 

send-outs. There was heterogeneity in use of IL-28B testing across VISNs. Only part of this variation 

is explained by differences in the number of treatment-eligible chronic HCV-infected Veterans in each 

VISN. Use of IL-28B testing across VISNs is represented in light shading in Figure 4, below.

Sub-question 1.3: Among people receiving DAA, how many had IL-28B testing? 

Among those with IL-28B testing, how many received DAA therapy? How does 

this differ across VISNs? 

Figure 4. Use of IL-28B Testing and DAAs by VISN

IL-28B testing is used for those not receiving DAAs, and DAAs are generally used without IL28B genotyping. Only 306 patients used both, whereas 2,551 patients only used DAAs, and 1,865 

patients only used IL-28B testing. VISNs differ on the rates of use of IL-28B testing in patients 

who received DAAs, with a national average just above 10 percent. VISN 22 had the greatest 

number of IL-28B tests, while VISNs 8, 16, and 21 had the greatest number of patients initiating 

DAA therapy. In some VISNs there were more patients initiating DAA therapy than getting IL-28B 

tests, while in other VISNs it was the reverse. Seven VISNs used testing in five percent or less of 

patients receiving DAA, whereas three VISNs used testing on 30 percent or more of these patients.

Using DAAs without information on a patient’s IL-28B genotype was common in many VA care 

settings, although there was diversity of practice. The reasons for these differences remain to be 

explored. They may include other uses of the IL-28B information, such as trying to understand why 

a patient failed to achieve sustained virologic response to a previous treatment. Tests may be more 

common in some settings because they are easier to order, because some subgroups of providers are 

more familiar with their use, or because they are more appropriate in some patient subgroups. 

 5 6 10 18 20 19 9 21 7 2 11 23 12 17 15 8 4 3 1 16 22

0 -

---------------------
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Assessment of Alternative Treatment Strategies 

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Sub-question 1.4: Among persons who initiated DAA treatment during the study 

year, what is the length of their treatment episode?

The median length of boceprevir treatments was just under 28 weeks (see Figure 5). Of those 

who initiated boceprevir, 89% got to 8 weeks, 81% to 12 weeks, 76% to 16 weeks, and 29% to 

32 weeks. Telaprevir episodes were much shorter per its therapeutic protocol. Median length of 

telaprevir treatments was between 12 and 16 weeks. None lasted beyond 28 weeks. 

The medication possession ratio indicated that most patients were highly adherent and that those 

who continued in treatment filled prescriptions promptly.

Figure 5. The Days on Treatment for Each DAA Appear Reasonably in Line with Its Therapeutic 

Protocols

KEY QUESTION #2. What will be the health impacts of using either 

of two available directly acting antivirals combined with pegylated 

interferon and ribavirin (triple therapy)?

With our model, we compared universal triple therapy to standard two-drug therapy over a five 

year analysis period for eligible GT1 HCV patients (N=48,000) (see Table 7). This comparison 

was made for three potential uptake rates: the current uptake rate (two percent per year), a doubled 

uptake rate (four percent per year), and a quadrupled uptake rate (eight percent per year). When 

compared to standard therapy, universal triple therapy was likely to reduce annual cases of 

decompensated cirrhosis by 10-29 (current uptake: 10; doubled uptake: 29; quadrupled uptake: 

50). When comparing universal triple therapy to standard therapy, annual cases of hepatocellular 

carcinoma were likely to be reduced by 5-16 (current: 5; doubled: 16; quadrupled: 27). Finally, 

when comparing universal triple therapy to standard therapy, annual numbers of liver transplants 

are likely to be reduced by 0-1 (current: 0; doubled: 1; quadrupled: 2). Consequently, annual quality 

adjusted life years (QALYs) increased by 148-213 (current: 148; doubled: 213; quadrupled: 322). % of Patients still on DAA

Boceprevir

Telaprevir

0 4 8 12 16 20 24 28 32 36 40 44 48 52

Week after DAA start

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
24

Assessment of Alternative Treatment Strategies 

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Table 7. Annual Effect of Universal Triple Therapy on Health Outcomes over 5 Years

Current 2x 4x

Uptake Uptake Uptake

Rate Rate Rate

(2%/yr) (4%/yr) (8%/yr)

Cases of Decompensated Cirrhosis -10 -29 -50

Cases of Hepatocellular Carcinoma -5 -16 -27

Number of Liver Transplants 0 -1 -2

Quality Adjusted Life Years +148 +213 +322

 N=48,000 eligible GT1 HCV

KEY QUESTION #3. How will the magnitudes of the health impacts 

measured in Key Question #2 change if IL-28B patient genotyping is 

used to offer triple therapy to those less likely to benefit from twodrug pegylated interferon + ribavirin?

Using our model, we also compared IL-28B-guided therapy to standard two-drug therapy 

over a five year analysis period for eligible GT1 HCV patients (N=48,000) (see Table 8). This 

comparison was made for the same three potential uptake rates: the current uptake rate (two 

percent per year), a doubled uptake rate (four percent per year), and a quadrupled uptake rate 

(eight percent per year). In these comparisons, annual cases of decompensated cirrhosis are likely 

to be reduced by 8-26 (current uptake: 8; doubled uptake: 26; quadrupled uptake: 45), annual 

cases of hepatocellular carcinoma are likely to be reduced by 4-14 (current: 4; doubled: 14; 

quadrupled: 25), and annual numbers of liver transplants are likely to be reduced by 0-1 (current: 

0; doubled: 1; quadrupled: 2). Consequently, annual QALYs increased by 110-145 (current: 110; 

doubled: 145; quadrupled: 225). 

Table 8. Annual Effect of IL-28 Guided Triple Therapy on Health Outcomes over 5 Years

Current 2x 4x

Uptake Uptake Uptake

Rate Rate Rate

(2%/yr) (4%/yr) (8%/yr)

Cases of Decompensated Cirrhosis -8 -26 -45

Cases of Hepatocellular Carcinoma -4 -14 -25

Number of Liver Transplants 0 -1 -2

Quality Adjusted Life Years +110 +145 +225

 N=48,000 eligible GT1 HCV
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Assessment of Alternative Treatment Strategies 

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KEY QUESTION #4. What will be the cost and resource use patterns 

when using either triple therapy or IL-28B-guided triple therapy?

Depending on uptake patterns, increased total expenditures for HCV treatment and care for 

individuals with GT1 HCV relative to standard two-drug therapy will likely be $32-$100 million 

annually. Table 9 below shows the details about these annual net expenditures vary depending on 

strategy and scenario. 

Table 9. Average Annual Net Increase in Cost by Treatment Strategy and Uptake Rate over the 5 

Years of the Analysis Relative to Standard Therapy

Current 2x 4x

Uptake Uptake Uptake

Rate Rate Rate

(2%/yr) (4%/yr) (8%/yr)

IL-28B-guided therapy $32M $76M $115M

Universal triple therapy $43M $96M $144M

 N=48,000 eligible GT1 HCV

The table gives the additional cost of each treatment strategy compared to standard two-drug 

therapy. The costs include the direct cost of the new medications, the cost of treating side effects, 

as well as averted costs of advanced liver disease and lower care costs after achieving sustained 

virologic response. Importantly, average annual net costs, health outcomes and quality-of-life 

presented in these analyses should not be used for cost-effectiveness calculations as averted costs 

and downstream health benefits past year 5 are not counted in the 5-year projection of the effect 

on health care cost.
26

Assessment of Alternative Treatment Strategies 

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SUMMARY AND DISCUSSION

SUMMARY OF EVIDENCE BY KEY QUESTION

Key Question #1: What are the current usage patterns of directly acting antivirals 

and of IL-28B patient genotyping in the VA health system? And how do these 

patterns differ by VISN?

Between July 2011 and the end of June 2012, nearly 3,000 people initiated DAA treatment, with 

approximately 80% using on-formulary boceprevir (Boceprevir N=2,366, Telaprevir N=501). 

During this same period, 2,171 individuals had an IL-28B test. There was heterogeneity in 

number of people taking up DAA therapies and IL-28B testing across VISNs 

VISNs differed in the rates of use of IL-28B testing in patients who were prescribed DAA 

medications, with a national average just above 10 percent. VISN 22 had the greatest number 

of IL-28B tests, while VISNs 8, 16, and 21 had the greatest number of patients initiating DAA 

therapy. In some VISNs there were more patients initiating DAA therapy than getting IL-28B 

tests, while in other VISNs the reverse was true. Seven VISNs used testing in five percent or less 

of patients receiving DAA, whereas three VISNs used testing on 30 percent or more of these 

patients.

The median length of boceprevir treatments was just under 28 weeks. Of those who initiated 

boceprevir, 89% got to 8 weeks, 81% to 12 weeks, 76% to 16 weeks, and 29% to 32 weeks. 

Telaprevir episodes were much shorter per its therapeutic protocol. Median length of telaprevir 

treatments was between 12 and 16 weeks. None lasted beyond 28 weeks.

Key Question #2: What will be the health impacts of using either of two available 

directly acting antivirals combined with pegylated interferon and ribavirin (triple 

therapy)?

When compared to standard therapy, universal triple therapy was likely to reduce annual cases of 

decompensated cirrhosis by 10-29 (current uptake: 10; doubled uptake: 29; quadrupled uptake: 

50). When comparing universal triple therapy to standard therapy, annual cases of hepatocellular 

carcinoma were likely to be reduced by 5-16 (current: 5; doubled: 16; quadrupled: 27). 

Finally, when comparing universal triple therapy to standard therapy, annual numbers of liver 

transplants are likely to be reduced by 0-1 (current: 0; doubled: 1; quadrupled: 2). Consequently, 

annual quality adjusted life years (QALYs) increased by 148-213 (current: 148; doubled: 213; 

quadrupled: 322).

Key Question #3: How will be the magnitudes of the health impacts measured 

in Key Question #2 change if IL-28B patient genotyping is used to offer triple 

therapy to those less likely to benefit from two-drug pegylated interferon + 

ribavirin?

Comparing IL-28B guided therapy to standard two-drug therapy, annual cases of decompensated 

cirrhosis are likely to be reduced by 8-26 (current uptake: 8; doubled uptake: 26; quadrupled 

uptake: 45), annual cases of hepatocellular carcinoma are likely to be reduced by 4-14 (current: 
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4; doubled: 14; quadrupled: 25), and annual numbers of liver transplants are likely to be reduced 

by 0-1 (current: 0; doubled: 1; quadrupled: 2). Consequently, annual QALYs increased by 110-

145 (current: 110; doubled: 145; quadrupled: 225).

Key Question #4: What will be the cost and resource use patterns when using 

either triple therapy or IL-28B-guided triple therapy?

Depending on uptake patterns, increased total expenditures for HCV treatment and care for 

individuals with GT1 HCV relative to standard two-drug therapy will likely be $32-$100 million 

annually. At the current uptake rate of 2 percent per year, universal triple drug therapy would be 

expected to cost $43 million more, while IL-28B guided therapy would be expected to cost $32 

million more, compared to standard two-drug therapy.

LIMITATIONS

Key uncertainties remain as with all studies and especially in the case of rapid, preliminary 

analyses. Below we summarize a number of these. 

The IL-28B genotype distribution in the VA population has not yet been described. Our study 

uses race-specific IL-28B genotype distributions observed in other studies. The VA specific 

distribution might be different from that observed in other studies. 

The liver fibrosis distribution in the VA population is based on diagnostic codes in administrative 

datasets. We did not have the more definitive results from liver biopsies, but this omission 

may not be very important, as biopsies are not performed in most persons with chronic HCV 

infection. Laboratory data can be used to estimate the stage of their fibrosis and may provide 

more accurate information on the distribution of fibrosis in future studies. 

The modeling analysis focused on VA as a whole. It is clear from the preliminary VA 

administrative data analyses that there is heterogeneity in the adoption of DAAs and IL28B between VISNs. We had insufficient information to project potential differences in 

uptake in these treatments by VISN. Furthermore, there are other patient, provider, and 

facility characteristics that may play a role in determining use of these new technologies and 

additionally, depending on the results from IL-28B testing may also play a role in determining 

subsequent clinical actions and patient behaviors. Information in this area could help to further 

refine the analyses presented here. 

The modeling analysis is confined to treatment-naïve, HCV mono-infected individuals as 

evidence of effectiveness for those co-infected with HIV is only beginning to emerge and 

utilization data needed to support VA-specific analyses stratified by co-infection status are 

also needed. Analyses like those presented here for individuals with previous experience of 

HCV treatment would be important to conduct, though are complicated by a number of issues 

including fewer data on effectiveness, various types of treatment failures, and reasons for failure 

including lack of adherence to medication regimen versus non-response to appropriately taken 

medications.

The modeling analysis considers three strategies including one strategy where IL-28B genotyping 

is used to determine triple therapy treatment versus standard therapy treatment. IL-28B genotype 
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along with other predictive markers for treatment response are an exciting new avenue.42-44 Our 

analysis considers one such approach, though others may also be possible. Ultimately, all such 

approaches attempt to optimize over treatment response, side-effects, and costs in achieving best 

outcomes for individual patients.

More generally, it is unclear how uptake rates may change beyond those observed in the first 

year of VA administrative data. Newer therapies and technologies are in clinical trials and could 

potentially represent even more attractive options for clinicians and Veterans, and may supplant 

the treatments we considered. Conversely physician education or other diffusion of information 

processes could increase uptake rates over time. Uncertainties in uptake scenarios can be reduced 

by periodically reevaluating the VA administrative data.

RECOMMENDATIONS FOR FUTURE RESEARCH

Therapy for HCV is evolving rapidly and important questions remain unanswered. As clinicians 

use currently approved DAAs more extensively and additional DAAs become available, 

future research should evaluate the health and economic outcomes that result from use of these 

therapies. This research should evaluate: practice patterns, including variations in care among 

VISNs; patient selection for treatment; effectiveness of DAAs in Veterans (in contrast to efficacy 

as measured in randomized trials) and in specific Veteran populations, such as patients with 

substance use disorders; utilization and costs from treatment and complications of HCV infection 

(e.g., costs); impact on specific VA budgets (pharmacy care, specialty care); cost-effectiveness of 

treatment and genetic testing; and barriers to diffusion of high-value therapies.

CONCLUSIONS

Approximately 3,000 Veterans initiated care with DAAs since their approval, with about 80% 

receiving boceprevir. Uptake of DAAs and use of IL-28B testing varies substantially among 

VISNs, unadjusted for the number of patients who are eligible for treatment. Our model-based 

analyses indicate that use of triple therapy results in better outcomes than standard therapy, but 

at increased costs. Use of IL-28B to select patients for triple therapy results in modest reductions 

in anticipated health benefits and costs. Assessment of the cost effectiveness of use of IL-28B 

guided therapy or universal therapy with DAAs will require projection of long-term health 

outcomes and costs. 
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