Economic Impact of Nirmatrelvir-Ritonavir for COVID-19 in Veterans Health Administration
Overview
Implementing nirmatrelvir-ritonavir (NR) treatment for COVID-19 among Veterans Health Administration (VHA) patients reduces healthcare utilization costs but increases total budget expenditures due to high drug acquisition costs. Targeted treatment of the highest risk quartile yields substantial healthcare savings with minimal budget increase.
Background
Nirmatrelvir-ritonavir (NR) is an oral antiviral approved for outpatient treatment of mild-to-moderate COVID-19 in high-risk adults. While clinical trials showed significant reductions in hospitalization and mortality, real-world effectiveness has been more modest, partly due to population immunity and variant circulation. The VHA serves millions of Veterans, many eligible for NR treatment, but the drug’s cost has risen substantially since initial government procurement. Understanding the budget impact of NR in this large integrated healthcare system is critical for informed treatment allocation.
Total budget increase treating highest risk quartile
+$3 million (UB: −29 to 17 million)
Key Findings
NR treatment reduced 30-day COVID-19 healthcare utilization costs by approximately $20 million when treating all eligible Veterans.
Total budget costs increased by $122 million due to the high price of NR drug acquisition.
Targeted treatment of the highest risk quartile (approximately 19,400 Veterans) achieved $17 million in healthcare savings with only a modest $3 million increase in total budget.
Risk-informed allocation strategies can optimize clinical benefits while minimizing budget impact.
Real-world effectiveness of NR showed a 27% reduction in hospitalization or death among all eligible Veterans, varying by risk profile.
Price reductions for NR are necessary to make widespread treatment financially sustainable for healthcare systems.
Clinical Implications
Clinicians and healthcare administrators should consider prioritizing NR treatment for patients at highest risk of severe COVID-19 to maximize cost-effectiveness and clinical benefit. Given the high acquisition cost of NR, broad treatment of all eligible patients may not be financially feasible without price adjustments. Incorporating risk stratification into treatment protocols can help optimize resource allocation in large healthcare systems.
Conclusion
While NR reduces COVID-19-related healthcare utilization costs, its high purchase price leads to increased overall budget expenditures. Targeted treatment of high-risk patients offers a balanced approach to maximize benefits and control costs within integrated healthcare networks.
References
VHA Study 2023 -- Economic Implications of Implementing Nirmatrelvir-Ritonavir for COVID-19 Treatment
by David P Bui, Denise M Hynes, Edwin Wong, Robert Vergun, Lei Yan, Yuli Li, Nallakkandi Rajeevan, Kristin Berry, Hung-Mo Lin, Yuan Huang, Diana J Govier, Mihaela Aslan, George Ioannou, Kristina L Bajema
