Tag Archives: Wholesale Acquisition Cost

Mavyret and Vosevi Fire Salvos in HCV Price Wars

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

Over the past month, the U.S. Food and Drug Administration has approved two new Direct Acting Antivirals (DAAs) for use in treating Chronic Hepatitis C (HCV) – Vosevi (Gilead) and Mavyret (AbbVie). Both of these drugs are pan-genotypic, meaning that they can be used to treat HCV Genotypes 1-6, making them the second and third pan-genotypic regimens to be approved by the FDA. What makes Vosevi unique is that it’s the first drug approved by the FDA for patients who have previously been treated with other DAA drugs (Brooks, 2017). That, alone, gives Gilead some leeway when it comes to setting their Wholesale Acquisition Cost (WAC), which they set at $74,760 for twelve weeks of treatment.

That was in July 2017. Then, came Mavyret, from AbbVie. Rather than even bother to hide their intention, AbbVie seriously threw a spanner in the works by pricing their new drug just under 50% lower than Vosevi for a similar regimen length. For twelve weeks of Mavyret, the WAC is $39,600 – roughly 48% the cost of Vosevi. But, that’s not the kicker: Mavyret’s recommend dosage for treatment-naïve patients is an eight-week regimen, coming in at $26,400. Vosevi also has an eight-week regimen option, but at a significantly higher price point. Shots. Fired.

This isn’t the first time that AbbVie has played this pricing game, before, in an attempt to undercut Gilead. In 2014, they released Viekira Pak – a four-tablet regimen for use in treating HCV Genotype 1a & 1b – at a WAC of $83,319. While this is significantly more expensive, at the time, it was something of a blow to Gilead and Janssen (makers of Olysio). Individually, Gilead’s Sovaldi had a WAC $84,000 for twelve weeks; however, the drug was intended to be used in combination with Olysio (Janssen), which boasted a WAC of $66,360, making the total cost of the regimen $150,360. Gilead’s newer product, Harvoni – a single-pill regimen designed to be used without Olysio – came in at $94,500.

Despite the lower price, Viekira Pak never really caught on as the go-to treatment regimen for HCV, for a number of reasons: (1.) Gilead had already established relatively deep market penetration and brand recognition; (2.) the four-pill regimen was/is thought to be too cumbersome to ensure compliance with the regimen; (3.) the price wasn’t low enough to get payers to bite. Of these three issues, AbbVie managed to solve the multi-pill regimen part in 2016 with their single-pill Viekira XR, which is now the preferred regimen over the original formulation.

Chart showing HCV therapies available and their Wholesale Acquisition Costs

But, pricing wars are tricky, particularly in the world of HCV therapies. The first truly significantly lower price point came in 2016 with Zepatier – Merck’s single-pill answer to HCV treatment – with a WAC of $54,600. But, even that price wasn’t enough to overcome the drug’s significant barriers to treatment – it was notoriously difficult to prescribe, as it had several counterindications (negative drug interactions) with drugs used to treat other illnesses. This was particularly true in the case of HIV. In addition to individual pricing concerns, treatment indications often require that the drugs be used in combination with other medications, the most common of which is Ribavirin, which can cost between $550 – $850 for twelve weeks, depending on brand vs. generic pricing.

What Mavyret does that Viekira Pak/XR did/does not is put on the market a single-tablet regimen to treat six genotypes of HCV, making it incredibly versatile. Whether or not they will be able to overcome Gilead’s market dominance, however, is another question.

References:

  • Brooks, M. (2017, July 18). FDA Clears Pan-Genotypic Vosevi for Chronic Hepatitis C. New York, NY: Medscape, LLC: Medscape: News & Perspective: Medscape Medical News: FDA Approvals. Retrieved from: http://www.medscape.com/viewarticle/883095

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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Hepatitis C Therapies Added to WHO Essential Medicines List

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

Since 1977, the World Health Organization (WHO) has published its Essential Medicines List containing the medications considered to be the most effective and safe to meet the important needs in a health system. This year, the organization has included the following Hepatitis C (HCV) Direct Acting Agents (DAAs) Sovaldi (Gilead), Olysio (Janssen), Harvoni (Gilead), Viekira/Viekira XR (AbbVie), Daklinza (Bristol-Myers Squibb), Technivie (AbbVie), and Epclusa (Gilead) (WHO, 2017). Notably absent from this list is Zepatier (Merck) – to date, the lowest priced HCV DAA with a Wholesale Acquisition Cost (WAC) of $54,600.

World Health Organization logo

Since the 2013 launch of Sovaldi and Olysio, new drugs to treat HCV have entered the market at a relatively rapid pace, from just two drugs in 2013, to nine drugs by 2016. That said, two or more new drugs hit the market in 2017:

AbbVie’s new next generation protease inhibitor & NS5A inhibitor known as G/P or GLECAPREVIR/PIBRENTASVIR; Gilead’s new triple [combination] of Sofosbuvir + Velpatasvir + Voxilaprevir which contains their new protease inhibitor (Vox.); [Merck’s new triple combination] (Uprifosbuvir) + Grazoprevir + Rusasvir; [Janssen’s] new triple AL-335 + Odalasvir + Simeprevir (Levin, 2017).

With so many treatment expensive options available to treat HCV, as well as the availability of reasonably priced generics in lower-income countries, there is little doubt that these medicinal cures for HCV should be included in every nation’s list of essential drugs. Furthermore, research shows that the generic versions of Sovaldi, Daklinza, and Rebetol (Ribavirin) are as effective as their brand name counterparts (Preidt, 2016).

Some concerns exist, however, that the high cost of treating HCV in nations who are forced to pay the high price for brand name drugs will prevent these cures from reaching the patients most in need. The Centers for Disease Control and Prevention (CDC) recently released a report detailing how restrictive state Medicaid policies – as well as state restrictions regard Syringe Exchange Services/Programs (SESs/SEPs) – are contributing to the vast increase in new HCV infections (CDC, 2017). Most states’ Medicaid programs require Prior Authorization (PA) standards for HCV drugs that are stricter than for most cancer-related treatments, in no small part because those prerequisites serve as cost containment tools – the more complicated and cumbersome the requirements, the less likely the program is to have to cover the cost of treatment.

While the inclusion of HCV DAAs to the WHO Essential Medicines List is an important step forward toward nations including them on their own lists, the high cost of the medications may prove prohibitive to some nations doing so. As the battle over “what the market will bear” soldiers on, HEAL Blog will continue to monitor the situation.

References:

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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What is WAC and is it Outdated?

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

Every time we mention Hepatitis C (HCV) drugs, we talk about price; specifically, we speak about “Wholesale Acquisition Costs” (WACs), and how that company-designated measure sets the baseline for pricing throughout the healthcare landscape. But, the reality of pharmaceutical pricing is far messier than just the WAC cost. In response to last week’s HEAL Blog entry regarding HCV drugs and Medicare, one quite savvy worker within the public healthcare arena rightly noted that “nobody really pays that price,” which brings up a couple of equally (if not more important) questions: (1.) If nobody pays that price, why is it even used; and (2.) Why does no one actually pay those prices?

A WAC “…is, with respect to a pharmaceutical or biological, the manufacturer’s list price for the pharmaceutical or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of pharmaceutical or biological pricing data (PharmaLink, n.d.).” That definition is pretty loaded, because it really spells out the ingredients (and the problems) in the drug pricing sausage that is so frustrating to advocates and patients, alike. What one program, insurer, or individual pays for drugs may or may not be the same price paid by another, and that makes determining the actual cost of drugs problematic.

Flow chart demonstrating the confusing nature of the Wholesale Acquisition Costs

Photo Source: National Academy of Sciences

Pharmaceutical companies like to bandy about the phrase, “What the market will bear,” in relation to how they price their products, which isn’t really a fair statement, because they essentially have a captive market. They know that the products they manufacture are going to be purchased by government healthcare programs like Medicare, Medicaid, Ryan White Part B, and the Veterans Affairs (V.A.), and that those programs are essentially (and sometimes literally) required to provide their products to their clients. Outside of the U.S., in more civilized First World healthcare climes, private insurers are essentially nonexistent, as Universal Healthcare Coverage is the norm, and they can set the price they’re willing to pay, manufacturer be damned. So, “what the market will bear” really ends up meaning, “How much we can get U.S. government programs to pay without kicking up too much of a fuss.”

When the aforementioned reader says that we know it to be the case that “nobody really pays that price,” he’s 100% correct. Medicare programs are Federally-funded, state-administered programs, meaning that all fifty states, the District of Columbia, and the territories all have the ability to individually negotiate directly with manufacturers to get drug rebates and discounted prices, meaning that each individual program may pay entirely different prices, and those prices are not public information, due to existing Trade Secrets laws that prevent that data from being released from official sources. The V.A. automatically gets the “best price,” meaning that they’ll ostensibly pay the lowest price, so they’re not really in the equation. Medicare Part D, however, is a different kettle of fish, because it is essentially a market of private insurers who are reimbursed through the national Medicare program for their expenditures, and price negotiations are, for better or worse, left up to those private insurers’ employees. According to research, while having more insurers on the Part D marketplace lowers costs to consumers, the Medicaid approach of state employees doing the negotiating actually works out to be cheaper than those “Free Market” solutions.

Because the WAC is a baseline measure against which all discounts and rebate agreements are measured, it makes determining the actual end price of drugs very difficult to determine publicly, and frankly, it’s a terrible model for the U.S. to continue participating in if programs are expected to exist in perpetuity. At some point, “what the market will bear” will become “What tuned-in Americans are willing to tolerate.”

References:

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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Hepatitis C and Medicare Part D

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

HEAL Blog has consistently covered the cost of new Direct Acting Agents (DAA) used to treat Hepatitis C (HCV), as well as the impact those prices have had on state Medicaid and AIDS Drug Assistance Programs (ADAPs). What we haven’t really covered is how those costs have impacted Medicare and the Medicare Part D program.

In addition to writing for HEAL Blog, I also serve as the Project Director for the HIV/HCV Co-Infection Watch. Last year, we looked into expanding our reporting of HCV drug coverage to include Medicare Part D markets, and what we found was that it was simply too much data to fit into an already then-76-page report. In June, I went ahead and looked at coverage for the Part D Standalone drug plans, and wound up scouring 923 different plans across the country and in five territories. What I discovered was that 922 plans covered the two most expensive HCV drugs on the market at that time – Sovaldi and Harvoni (Gilead).

That translates into staggering figures for Medicare Part D expenditures, as outline in reports from the Centers for Medicare and Medicaid Services (CMS). In 2014, spending on the three most-prescribed HCV drugs – Sovaldi, Harvoni, and Olysio (Janssen) – totaled $4.665 billion (CMS, 2016). Preliminary data obtained by the Associated Press (AP) from CMS estimate that the cost of HCV drugs to Medicare in 2015 nearly doubled, coming in at roughly $9.2 billion (Alonso-Zaldivar, 2015). This figure comes despite the introduction in 2015 of HCV therapies with lower Wholesale Acquisition Costs (WACs) than the $87,000 Sovaldi or $94,500 Harvoni.

Since the introduction of Sovaldi and Olysio in 2013, HCV drugs have consistently ranked in the top ten drug expenditures for Medicare Part D, as they have for Medicaid and the Veterans Administration (VA). The primary difference is that both Medicaid and the VA pay lower prices for the drugs as a result of state Medicaid negotiating power and the VA’s “Best-Price” rule that requires pharmaceutical companies to provide drugs at the lowest possible price. Medicare, however, is prohibited from negotiating drug prices as a result of the Medicaid Modernization Act (2003) that established Medicare Part D. One of the main provisions of the Act states that, “…in order to promote competition,” the Health and Human Services (HHS) Secretary “…may not interfere with the negotiations between drug manufacturers and pharmacies and prescription drug plans.”

President Donald J. Trump

Photo Source: UPI

Democrats have long attempted to pass legislation that would amend this provision, and may have found a new, not-so-secret weapon – President Donald Trump (Tribble, 2017). He has repeatedly stated that he believes Medicare should have this power, much to the consternation of Tom Price, Trump’s own Secretary of Health and Human Services, and Republicans, who have long held that Medicare negotiating drug prices amounts to Federal tyranny, Big Government, and anti-“Free Market” practices. But, even those Republicans are balking at the high cost of HCV drugs.

HEAL Blog will continue to watch in the coming months how this situation plays out, but we can be certain that, like every Trump initiative, the path will be fraught with confusion, disarray, and uncertainty.

References:

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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Up, Up with Prices

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

If the past decade has taught us anything about pharmaceutical products, it’s that necessity is the mother of price gouging. Whenever a health crisis arises, pharmaceutical companies are quick to respond with an abundance of products at exorbitant prices. Such is the case with Kaléo, the manufacturer of an injectable form of naloxone – the lifesaving medication that can reverse opioid and heroin overdoses – Evzio.

The price Kaléo’s unique auto-injecting naloxone twin pack of Evzio has increased 552.17% from $690 in 2014, to $4,500 in 2017 (Baldrige, 2017). This vast increase is not the only one of its kind: all five pharmaceutical companies that produce naloxone products – Amphastar, Pfizer, Adapt, Kaléo, and Mylan – have increased the cost of their versions of the drug, prompting Senators Clair McCaskill (D-MO) and Susan Collins (R-ME) to pose the following question to those companies:

“At the same time this epidemic is killing tens of thousands of Americans a year, we’re seeing the price of naloxone go up by 1000% or more. Maybe there’s a great reason for the price increases, but given the heart-breaking gravity of this epidemic and the need for this drug, I think we have to demand some answers (Jacobs, 2016).”

Sen. Bill Cassidy, R-La., listens on Jan. 23 as Maine Sen. Susan Collins discusses her Affordable Care Act replacement plan.

Photo Source:J. Scott Applewhite/Associated Press

Naloxone, in and of itself, is neither expensive to manufacture, nor is it difficult to produce. Injectable versions of the drug that require hand-operated syringes cost between $20.40 and $39.60, respective to milligrams-per-milliliter and size of the vial; but even those costs have risen substantially over the past decade (Gupta, 2016).

Much like Mylan did with Epi-Pen, the epinephrine shot that counteracts allergic reactions, what Kaléo uses to justify its price increases has more to do with the delivery method, rather than the drug itself. Evzio is unique in that it utilizes both an auto-injector mechanism, and “intelligent voice guidance,” which Kaléo describes as “Simple, on-the-spot voice and visual guidance [that] helps caregivers take fast, confident action administering naloxone during an opioid emergency and reminds the user to call 911” (Kaléo, n.d.). While this product is unique in these features, certainly the cost of the auto-injector mechanism and an audio device that can be found in greeting cards do not justify a price of $2,250 per dose.

While furor over this price increase has yet to gather full steam, health departments in northern Kentucky and in Cincinnati, Ohio have avoided the sticker shock by abandoning Evzio, altogether, by switching from Kaléo’s product to Adapt Pharma’s Narcan nasal spray, which has a Wholesale Acquisition Cost (WAC) of $125 per carton for two doses (DeMio & Luthra, 2017). Both Ohio and Kentucky, along with nearby Indiana, have experienced some of the highest rates of opioid and heroin abuse in the U.S., making naloxone a relatively basic necessity for every branch of emergency services, as well as schools and businesses. Adapt’s currently available dose is 4mg is designed for use in emergency situations; the Food and Drug Administration (FDA) has recently approved a 2mg dose of Narcan, which is designed for use in opioid-dependent patients expected to be at risk for severe opioid withdrawal in situations where there is a low risk for accidental or intentional opioid exposure by household contacts (Barrett, 2017).

It is understandable that pharmaceutical companies need to make a profit in order to continue making new products, it is both unacceptable, and unconscionable for manufacturers of lifesaving drugs to engage in intentional price gouging whenever the need for a readily available, easily produce medication is in need. Given the current uncertainty within both the healthcare and economic arenas, neither patients, nor states can or should stand for being caught up in predatory pricing practices.

References:

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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An Imperfect Prison Health System

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

One of the primary issues for people in America’s vast prison system is the issue of healthcare rights and treatment. In fact, prisoners are the only Americans who are Constitutionally guaranteed the right to treatment for health conditions under the 8th Amendment, specifically the “cruel and unusual punishments” clause (Estelle v. Gamble, 1976). This ruling has been used since 1976 to ensure that inmates who are infected with HIV, and now, Hepatitis C (HCV), receive the appropriate medical treatment to which they are guaranteed under that decision. Additional arguments can be made that using a “Treatment as Prevention” (TAP) model in incarceration settings will help to stem the spread of various Sexually Transmitted Diseases (STDs) and Infection (STIs), including both HIV and HCV.

Over the past two years, HEAL Blog has covered various aspects of the HCV treatment provision for inmates in various states. Several states, including Tennessee, Nevada, Missouri, Washington state, and Pennsylvania, are currently facing lawsuits brought my inmates and advocates in state and Federal courts to force their respective Departments of Corrections to provide treatment to HCV-infected patients. Unfortunately for the states – and more specifically, their budgets – courts have seemed inclined to agree with both advocates and inmates: providing treatment and a cure for HCV is mandatory, regardless of the expense.

Nurse administer care to an inmate.

Photo Source: Prison Protest

The primary argument used by states and their respective Departments of Corrections is that the high cost-per-patient/per-cure is simply an unreasonable expenditure, given the long-term nature of the disease (meaning the length of time from gestation to serious illness to death). The cheapest Wholesale Acquisition Cost (WAC) of the newer Direct Acting Agents (DAAs) to treat HCV – Zepatier (Merck) – is $54,600 for twelve weeks of treatment, before any discounts, rebates, or pricing agreements struck between states and the drug manufacturers. Viekira XR (AbbVie) and Epclusa (Gilead) cost $83,319 and $74,760, respectively, which makes treating inmates with HCV incredibly expensive in one go.

Gilead and other manufacturers have argued – with only moderate success – that the short-term high cost of a cure actually ends up costing less in the long-term, when compared to both the co-infections and –morbidities (co-existing conditions) that can accompany untreated HCV infections, and the long-term cost of treating other serious chronic illnesses, which over a course of several years, account for far more money being spent to treat them. While this argument may look great on paper for the manufacturers, for government employees and elected representatives who are tasked with prepared, appropriating, and allocating funds in a budgeting process, it’s simply not a feasible one. By their way of thinking, long-term illnesses represent costs that can be spread out over time, while HCV manufacturers expect a cure, right up front, set at a budget-breaking price.

States have found a unique way of getting around the 8th Amendment statute that courts have ruled guarantees treatment: they simply fail or refuse to screen incoming and existing inmates. Many states require that inmates only be screened for HIV during the intake process, allowing prison officials to essentially feign ignorance about their prisoners’ health – if they don’t know, they don’t have to treat. Unfortunately for the state, prisoners are getting wise to this tactic, and are taking them to court to force treatment. Nevada, for example, reported 593 inmates with HCV, including just two who were receiving treatment (0.34%) in 2015 (Botkin, 2017). By March 2016, a total of only nine inmates were receiving treatment.

Given the vast budget constraints placed upon states, we at HEAL Blog understand that the cost of treating every HCV-infected inmate is a potentially financially disastrous proposal, and a non-starter in virtually every state. Attempting to get around those costs by ignoring the problem is simply an unacceptable way for state and Federal prisons to operate. Yes – treatments are expensive; but, when lives are at stake, trying to get around a Constitutional obligation to treat is simply unacceptable.

References:

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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Do Black Boxes Mean Red Ink for Drug Companies?

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

The U.S. Food & Drug Administration (FDA) has recently concluded that new Direct Acting Agents (DAAs) to treat Hepatitis C (HCV) require a boxed warning for the drugs advising clinicians and physicians to screen patients for evidence of a past or current Hepatitis B (HBV) infection before undergoing treatment for HCV. This warning, indicated by black box on the labels of all nine current DAAs, has many investors worried that, along with consistent questions about the Wholesale Acquisition Costs (WACs) of newer HCV drugs, stock prices may face volatility in the coming years.

The new DAAs for HCV have been on the market for roughly three years, beginning with the release of Sovaldi (Gilead) and the companion drug, Olysio (Janssen), in 2013. Since that time, there has been a tremendous outcry from virtually every stakeholder involved in the issue of pricing, save for the pharmaceutical companies, themselves. Additional concerns have been raised that the modules used by companies to determine initial WAC prices is neither transparent, nor representative of the will of consumers. Arguments that pricing structures take into account “what the market will bear” have served as little comfort to advocacy groups, state agencies, and Congressional panels, all of whom are becoming less tolerant of high drug prices.

Drug prices for specialty products – those that are designed to treat very specific conditions – continue to rise at meteoric rates, and regardless of what drug companies believe the markets can bear, state and Federal budgets are largely unequipped to handle the short-term costs to treat HCV without quadrupling their annual budgets, so vast is the pool of infected patients. Beyond just the traditional patient pool, the growing HCV infection crisis in prison populations, which is largely ignored in state reporting and which faces vast issues in screening, prison budgets may soon face extreme funding issues if Federal lawsuits go against them, and require them to provide treatment to all inmates infected with the disease.

These new concerns raised by the FDA represent just the latest hurdle for pharmaceutical companies whose HCV fortunes may turn in the coming years. HBV, an as-yet incurable form of the illness, is much more easily transmittable through sexual intercourse, which may pose an additional risk for HIV/HCV co-infected patients whose HBV infection flares up as a result of using DAAs for HCV. Whether or not the reactivation of HBV in HCV treated patients is widespread is unknown, as the FDA has only identified 24 cases at the time of their ruling.
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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

 

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