(MHS) Medco Health Solutions to Better Tackle Hepatitis C

Medco Health Solutions (MHS) is making attempts to curtail costs of treating patients suffering from hepatitis C (HCV). The company’s specialty pharmacy segment, Accredo Health Group, considers patient adherence to the treatment most significant as any contrary behavior could lead to liver cirrhosis and certain cancers.

Accredo is optimistic about two new HCV medications — boceprevir and teleprevir — although the treatment process is quite complex and requires greater degree of adherence.

In May 2011, Merck (MRK) received approval from the US Food and Drug Administration (FDA) for Victrelis (boceprevir) to treat chronic hepatitis C (CHC). The drug is approved for the treatment of CHC genotype 1 infection, in combination with peginterferon alfa and ribavirin, in adult patients who were left untreated or failed previous interferon and ribavirin therapy.

The FDA also approved Incivek (telaprevir), marketed by Vertex Pharmaceuticals (VRTX), to treat certain adults with CHC infection. The current standard of care for patients with CHC infection is peg-interferon alfa and ribavirin for 48 weeks. However, less than 50% of patients respond to this therapy. It has been observed that the new treatments are more effective and also shorten the duration of treatment to 24 weeks in most patients.

To make the treatment effective, about 80-85% patient adherence is required. It has been demonstrated that patients receiving therapy from Accredo’s nurses and specialist pharmacists are 10% more receptive than others. Moreover, Accredo could reduce the cost of therapy up to $13,000 by identifying patients who would require only 24 weeks of therapy.

To ensure better adherence of patients, Accredo is educating them regarding the usage of the medications. Moreover, the patients are also being encouraged to communicate with doctors about the treatment program and seek their assistance in managing side effects.  This helps to improve patient’s condition and do away with the costly hospitalizations.

Over the past few quarters, Medco demonstrated successful performance in its Specialty business segment primarily banking on significant new client wins and continued growth across Accredo.

During the first quarter of fiscal 2011 this segment reported revenues of $3.1 billion, up 14.9% year over year. Presently, the company is focusing on several strategic initiatives such as improved product and channel mix along with new client wins to drive the growth further.

We are currently Neutral on Medco which also corresponds to a Zacks #3 Rank (Hold) in the short term.

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